The are reports this week that ITV has held talks with Sky about turning ITV2, ITV3 and ITV4 into subscription (pay TV) channels, that would become part of the Sky digital TV package and would most likely therefore no longer be available on Freeview.
While ITV today refused to comment publicly on the story a source indicated there are no ongoing talks. Sky refused to comment.
The fact that the conversations are ongoing is very interesting. It shows just how difficult it must be to make digital TV channels pay their way through advertising revenues alone. This is despite the fact that ITV’s digital channels are some of the best viewed in the UK thanks to the success of shows such as American Idol on ITV2. Indeed ITV2 is actually the most-watched non-sports digital channel in the UK.
The channels are faced with a triple whammy of collapsing advertising demand; fragmenting audiences as channels proliferate and on-demand viewing increases online; and the increasing popularity of PVRs such as Sky+ (which are now available in circa 7 million TV homes) and allow customers to fast-forward the adverts.
The questions then becomes how this affects the long term health of Freeview, which relies on digital TV channels based around a conventional advertising model. If ITV2 is struggling to pay its way and could be tempted to migrate across to the pay digital TV world, how many others could follow suit?