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Could UKTV be sacrificed in bid to create Netflix rival?

The owner of TV channels including Dave, Really and Gold could be split up as broadcasters prepare to launch a Netflix rival.

Media reports over the weekend indicate the BBC, ITV and Channel 4 are continuing to move forward in their plans to create a British rival to Netflix.

The Times on Saturday reported that ITV chief executive Carolyn McCall will discuss her willingness to work with rivals to nullify the threat from streaming competitors at an investor conference on Wednesday. Plans include bringing together classic and new programmes from the main broadcasters on a new paid-for service.

The Guardian reports that uncertainty over the future of UKTV, the owner of ten channels including Dave and Gold, has stalled progress to create a Netflix rival.

UKTV is a 50:50 joint venture between BBC Studios and Discovery, following Discovery's purchase of Scripps Networks earlier this year. Channel 4 handles the ad sales for UKTV.

UKTV was set up as a multi-channel operator in 1997, following the success of UK Gold. Its original role was to provide a re-broadcast platform for former BBC programmes, raising advertising and subscription revenue, which flowed back to the BBC's commercial arm and could be re-used for new BBC programmes.

20 years later, UKTV is divided between free-to-air and pay TV, and between programmes it has the rights to show on-demand and programmes it doesn't. Increasingly, pay TV operators are factoring in on-demand content in any carriage deal, with Virgin Media citing the on-demand rights anomaly in its recent carriage dispute with UKTV. The way rights are divided make it difficult to offer a comprehensive online catalogue of British programmes in one place.

It is reported that UKTV's channel portfolio could now be split between BBC Studios and Discovery, although it is not clear how the channel portfolio would be carved up, although those channels carrying a greater proportion of archive BBC content would likely go to BBC Studios.

Such a move could produce more clarity over programme rights, giving the BBC full control and eliminating the need to package different programme rights deals for UKTV and for Netflix, enabling it to push ahead with ITV and C4 to create a rival to Netflix.

But as noted by Simon Duke in The Times (15/09/2018, page 53), if ITV and the BBC decided to launch a UK-based streaming service, they would have to "sacrifice many millions in licensing income by taking back their domestic rights."

Broadcasters have so far declined to comment on the weekend's reports.