Five, the UK terrestrial TV channel jointly owned by Bertelsmann’s RTL Group (65%) and United Business Media (35%), has renewed its broadcast license for a further ten years at an annual fee of just one-sixth its present payment.
But this does not reflect a surfeit of largesse from licensing body, the Independent Television Commission. Instead, the deal reflects the ITC’s – and the government’s – belated recognition that the revenue curve of ad-funded broadcasters goes down as well as up.
But the ITC is clearly betting on Five’s overall trend being upward. Although the new licence fee is reduced to only £4.4 million ($7.02m; €6.52m) annually instead of the previous £24.6m, Five will pay an additional eight per cent of ‘qualifying revenue’ – in plain English, advertising and sponsorship income.
Over the decade of the licence, which runs from April 2003, the new formula is expected to generate additional cash for the ITC of at least three times the aggregated value of the base fee.
Data sourced from: Telegraph.co.uk; additional content by WARC staff