ITV WILL launch its first new channel in eight years on Sky as part of a four year deal that includes a renewal of the broadcaster’s retransmission deal covering Sky’s 4.8m high definition subscribers.
ITV Encore will host some of ITV’s top drama series from recent years, as well as original content from 2015.
“ITV Encore is right in line with our strategy of growing non advertising revenues while at the same time creating even greater opportunities to showcase new drama,” said ITV chief executive Adam Crozier.
Analysts said that they expect ITV to see a substantial upside from the agreement due largely to an expected higher retransmission fees from Sky.
“Exact quantification is hard (because ITV is not releasing any information) but we believe the renewal of the carriage deal with Virgin Media saw ITV’s retransmission revenues from that deal go from £2m to £8m to 20m based on feedback from industry sources,” said Liberum media analyst Ian Whittaker.
Sky chief executive Jeremy Darroch said the deal was a “broad, mutually beneficial partnership”.
ITV’s share price rose 1.3 per cent yesterday to close at 199.2p.