RE: Ofcom - Current Investigations
A little more on the fees that Ofcom charges.
Fees for 2010-2011 are based on a broadcaster's earnings in 2008. This only makes sense if the market as a whole is static and each broadcaster keeps the same market share. It is well known that ITV's advertising revenues have dropped heavily, and a reasonable person might assume other broadcasters have had similar changes.
Fees are expressed in bands. Ofcom describes these as "cumulative" but the table shown is not cumulative in the accepted sense of the word - if it was each band would start from £0. Ofcom itself acknowleges this by calling the fees "progressive" elsewhere. This muddled, downright wrong and self-contradictory use of English is far from unique in Ofcom documents.
Rates for Public Service Broadcasting (ITV1, C4, Five and PSB Simulcasts on other channels) start at 0.19% and rise to 0.67% at £300 Million revenue. There is no additional fee for anything over that, so ITV1, C4 and Five probably all pay the same top whack.
Rates for non-PSB TV Licencable content (from Sky1, Fiver and E4 to BangBabes) pay a lower fee from 0.06% increasing to 0.44% at £300 Million revenue.
BBC1 and 2 seem to be exempt. It is not obvious what rate BBC3 and BBC4 attract, but perhaps they are regarded as "non-PSB TV Licencable content" and pay the lower rate.
So if ITV broadcasts Morse on Channel 3 it pays one licencing rate, presumbably because it gets a cosy protected Must-Carry channel that the entire UK can receive, but if it broadcasts exactly the same show on ITV2 it pays a lower rate - even if it gets the same advertising revenue. And that is despite having the additional costs of News, Education, Drama etc.
To illustrate the problems this causes, presumably ITV need an internal accounting system, so that ITV2 can pay ITV1 for "selling" them an episode of Morse. On second thoughts I might be seeing too much complexity, but they certainly have to keep advertising money in different accounts - even if they sell a multi-channel bundle.
Teleshopping channels are charged a flat-rate £2,000 a year. A non-PSB TVLC would need turnover of £3.6M on one channel to pay the same fee. So when BangBabes becomes 7 official shopping channels in October their new style fee will be £14,000, probably an increase from now.
Applications cost £2,500 and variations cost £1,000 a pop, so each time Desmond changes a channel name it might cost him. (Not clear if name changes count). Certainly if a Sky or Freeview slot is sold from one broadcaster to another the fee would be payable, so Sky will be paying Ofcom to take over Virgin channels.
Finally, the rate fees are charged at depends on the licencee's annual turnover - not the channels. Having multiple channels means paying a higher rate across the board, a point probably not lost on Viacom with many Scandinavian channels.
Why on earth do Public Service Broadcasters pay higher fees on the same turnover than competitive businesses (Bravo, Living, etc), when the PSBs attract fewer complaints per £ of turnover (or per viewer if you prefer) and have the additional overhead of PSB content? It's the wrong way round.
Gone fishing
(This post was last modified: 10-06-2010 01:03 by eccles.)
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