Casualties in the changing TV landscape

A raft of closures and mergers amongst minor digital channels has been announced in recent days but will more follow? The casualties include 5Spike, which is being merged with the Paramount channel, and Horse and Country TV, which is moving online.

The basic question is: are the channels making money or could their owners make even more through efficiencies?

Freeview channels, of course, rely on income from advertising and sponsorship. The only way a loss-making channel would continue would be if its owner saw benefits below the bottom line. For instance, Sky News always played a part in building BSkyB’s corporate reputation.

It would be rash to speculate on which channels would be next. The history of digital television is cluttered with the names of channels which have folded, rebranded or changed their character considerably. However current consumer trends would appear to suggest more closures are probable.

The total amount of time spent watching linear television has been declining. It is still large but falling, especially amongst younger people. On Demand services would appear to be the way of the future.

Advertisers may continue to shift some of their spending away from linear TV. Inevitably there may come the point when the sums might not add up for a particular channel.

Pay TV is a more complex matter. Sky and Virgin’s bundling can help ensure the sums add up for channels with relatively small ratings. The trend is definitely towards On Demand though.

But what channels are safe? First and foremost, anyone who imagines that major channels such as the five big terrestrial channels will not be around for a long time to come is living in fairyland – even if these channels do find it hard to reach younger audiences. BBC One and ITV can still bring millions together in a way nobody else regularly can. The end. No discussion necessary.

But what about the ranks of smaller channels? Well, plus one channels are unlikely to shut unless the plug is pulled on the master channel.  They are cheap to run and boost overall ratings.

The digital channels associated with the main commercial PSBs – such as ITV 2 and E4 – are also amongst the most watched. ITV 2’s share has slipped in recent months but when Love Island is on it can match Channel 5 over the course of the week.

And, of course, different factors apply to BBC channels. Every so often someone in a newspaper will suggest closing BBC Four and moving its original content to BBC Two. Some would contend there could be merit in this idea as they fear some cultural programmes have been exiled to a ghetto on Four. Even where they get good audiences, they may lack the visibility of a slot on the second channel.

The truth is that any decision to close a BBC service will ultimately depend on the level of the licence fee. And while a commercial broadcaster can simply shut a channel, any significant change to a BBC service would require a public consultation and, most likely, Ofcom approval.

One thing does seem certain. If channels do close on Freeview, multiplex operators will look for new operators – even if they are simply +1 or shopping channels.

Recent announcements

• Sewing Quarter closes on 30th December 2019.
• 5Spike to be replaced by Paramount on 7th January 2020.
• VH-1 UK closes on 7th January 2020.
• Universal TV will no longer be available beyond 27th January 2020.
• Horse and Country ceases broadcasting on Sky on 31st January 2020. It will move online and a premium service will be available via Amazon Prime Video and Virgin TV.

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