Pay-TV urged to cut packages but papers still make a bundle

Why is “bundling” regarded as a bad thing in television but rather a good thing in newspapers?

The Independent Television Commission (ITC) last week took a tougher-than-expected stand against bundling in the pay-TV market in proposing a reduction in the size of the “basic” channel packages offered to subscribers. In effect, the ITC said it was prepared to see less popular channels go out of business in order to give viewers greater freedom in the way they buy cable or satellite TV.

ITC chairman Sir Robin Biggam made a comparison with supermarkets: “If you go into a supermarket you don’t have to buy 80 per cent of the stuff on the shelves.”

The last time I heard the supermarket analogy used in a media context it was to justify the concept of bundling in Sunday newspapers. When The Sunday Times began expanding in the Eighties, its editor Andrew Neil claimed the multisection paper was like a supermarket – giving customers extra choice.

At the time, there was a good deal of criticism of this view. “Why should we have to pay for the business (or sport/money/ style/culture/books/appointments/Funday Times) sections when we never even open them?”

Rival papers – whose research told them multi-section papers were unpopular with readers – tried to make capital out of the “bloated” brand leader. The Sunday Telegraph ran a clever advertising campaign showing a needle-sharp pencil puncturing the padded pages of its opponent. Yet the bulky Sunday Times increased its circulation, while sales of the slimline Sunday Telegraph carried on falling.

Not for the first time, it seemed, the great British public was saying one thing and doing the reverse. Just as they criticised – yet bought – papers that published intrusive pictures of the royal family, so they criticised – and bought – the multi-section Sunday papers.

Now bundling has spread to the Saturday papers with equal success. If I want to read Bridget Jones’ Diary in the Saturday Telegraph, which many would regard as a “premium” offering, I am forced to take nine other sections – all of which are shamelessly trumpeted on their front page.

Does the Telegraph give me the chance to choose The Times’ Saturday magazine instead of its own? Strangely, it does not. Nor, for that matter, does my newsagent.

Does the Telegraph allow me to buy five of the ten sections for half the price? Curiously, it does not. Would the Young Telegraph survive on its own without being part of the overall Saturday Telegraph package? Most unlikely.

The same is true of the BBC, of course. Licence-payers have to take Radio 3 as well as Radio 1, Newsnight as well as EastEnders, Horizon as well as Never Mind The Buzzcocks, and Young Musician of the Year as well as the Grand National.

Even ITV – paid for by viewers through the less direct route of advertising – is guilty of bundling less popular programmes in with its proven ratings winners. Indeed, the ITC requires the broadcaster to do so. Yet you rarely hear it say that if ITV’s current affairs, arts and religious programmes cannot stand on their own feet commercially then they should be allowed to wither and die.

So you might have thought that the ITC, charged with upholding commercial TV’s public service responsibilities, would have welcomed “bundling” as a way of broadening cable and satellite viewers’ choice by giving them a wide range of channels.

Yet at last week’s ITC news conference its chief executive Peter Rogers stated quite categorically: “We have no remit to hold afloat broadcasters that are not economically viable.” Rogers was responding to journalists’ suggestions that several cable and satellite channels – including the Asian channel Zee TV – could go out of business if they were not included in a “basic” package of channels.

He is, of course, right. As far as cable and satellite TV is concerned, there are no public service requirements for the ITC to uphold. They only apply to ITV, Channel 4 and, to a lesser extent, Channel 5. To the regulator, it is immaterial that, in the brave new world of specialist, “themed”, channels the Sky multi-channels package has enabled cable companies to offer customers a diverse range of services, including news, documentaries, sport, films, children’s and youth programmes, music, wildlife, history, drama and comedy.

Of course the ITC is not banning channel packages. What it wants to ban is the “minimum carriage requirement” demanded by some channel operators, as well as the tiering obligations that prevent cable and satellite companies from offering smaller basic packages. The ITC also says it must be made easier – and cheaper – for viewers to subscribe to premium channels such as those showing movies and sport. And even though channels like Live! TV have been backed by the courts in their demand for “100 per cent carriage” from cable operators, the ITC says its new ruling will change that.

The ITC believes that smaller, cheaper basic packages will encourage more people to take up cable and satellite TV – and it may be right. A diet of Sky One, UK Gold and Nickelodeon for 5 a month may well attract people who until now have not been prepared to pay for extra choice. In cable areas where this approach has been tried – bundled, of course, with a telephone service – cable’s penetration has increased.

But it is hard to see how it will help fund the hundreds of new channels demanded in the digital age.

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