Industry insights: Sky's £1.6 billion ITV deal reshapes UK broadcasting, BitTorrent marks 25 years of decentralized distribution, and Netflix data reveals sharp season-two viewership declines across major titles.
[Deadline and others]
Sky has agreed to acquire UK broadcaster ITV for £1.6 billion ($2.1 billion), a transaction that would create the UK's largest commercial broadcaster. Both companies have presented it as creating a British "streaming champion." But, perhaps more importantly, the deal contains a set of infrastructure and technology decisions that are directly relevant beyond the UK.
Sky and ITV expect regulatory review to take 12 to 18 months, with completion targeted for 2027. However, UK regulator Ofcom and the Competition and Markets Authority (CMA) have blocked comparable UK media consolidation before, notably a proposed BBC, ITV and Channel 4 streaming joint venture in 2009, so the outcome of this review is definitely not guaranteed
The primary concern for the government is expected to be the combined entity's share of television advertising, given ITV's existing 32% share of commercial viewing. Sky's argument to regulators is that the relevant market is video advertising as a whole, rather than broadcast television alone, folding in social media, YouTube, and so on. On this basis, it estimates the combined business would represent only 6.5% of total UK ad spend.
This is an argument that could well be used elsewhere in the world, so will be watched closely for signs of success.
Also relevant globally is Comcast-owned Sky's plan to migrate ITVX onto the streaming infrastructure that already powers NBCUniversal's Peacock service. Sky and ITV expect to generate £200 million in savings as a result, with the majority coming from precisely this sort of consolidation of marketing and technology functions, rather than, say, synergies in content production.
This points to a broader pattern among broadcasters still working within the confines of a significant linear television legacy tech stack: Rather than building or maintaining parallel streaming architectures, they are often consolidating onto shared, already-proven infrastructure that is operated by a common parent or partner.
Regarding content, ITV Studios, the production arm responsible for ITV's content output, is not part of the Sky transaction, and will remain a separately listed company. Sky has agreed a £2.1 billion content output deal with ITV Studios running to 2032, effectively giving the production business contractual continuity, independent of the change in ownership of the broadcast and streaming business (an associated £200 million transaction will see Sky sell Love Productions, producer of The Great British Bake Off, to ITV Studios).
Both companies have stated that ITV's existing free-to-air content, including high-profile programing such as Love Island and Coronation Street, will remain free-to-air. They also mention the possibility that Sky's heavyweight sports rights portfolio could extend to ITV's platform under the enlarged group, with some sports potentially moving out beyond paywalls for the first time in decades.
The CMA’s actions here will be under scrutiny as, elsewhere, the UK government has also suggested it may intervene in Paramount Skydance’s proposed $110bn acquisition of Warner Bros. Discovery, citing concerns over media diversity. Should the UK government proceed, a review could delay the deal beyond Paramount’s initial end of September target. This could be a significant wrinkle as, under the merger agreement, Paramount is required to pay a $650m fee to Warner Bros. Discovery for every quarter the deal remains uncompleted past a 30 September 2026 target.
Paramount Skydance has already made concessions to get the deal approved in the EU, agreeing to exit its distribution joint venture with Universal to secure approval. The scope of any UK-specific conditions is not yet clear.
Meanwhile, the BBC’s new director general revealed to a parliamentary culture committee on Wednesday 8 July that it is talking with fellow broadcaster Channel 4 about potentially merging streaming platforms, in an attempt to achieve the sort of scale necessary to combat the likes of YouTube. It seems that the UK regulator may be busy over the next few months.
This decentralized design meant BitTorrent Inc. itself had no visibility into what data users exchanged, and it was this that shielded the company from the contributory infringement claims that ended its competitors. While attempts to commercially market the technology never took off, BitTorrent traffic became a mainstay of pirate video networks and reportedly accounted for a third of all internet traffic by 2004.
While live streaming has largely taken over from the illegal download model, BitTorrent usage has not disappeared. One tracking site estimates roughly 0.25% of internet users download torrents daily, a figure that has held steady for eight years.
As a percentage it is small, but given the billions of people online, this still works out as over 15 million people. What’s more, usage is now reportedly rising again as streaming subscription costs increase. Russia seems to be BitTorrent's largest current market, linked to the unavailability of licensed streaming services there, with the US ranking in second place.
The streamer’s first-four-week viewership figures show substantial season-on-season decline across multiple titles. One Piece lost more than 30% of its audience in its second season. Beef fell by more than 70%. The Night Agent shed 50% of viewers in its second season and a further 35% in its third, a decline steep enough that Netflix has opted to end the series after its next season. Avatar: The Last Airbender (above), one of the platform's most-watched titles in 2024, recorded a drop of more than 60% in the first week of its latest season.
Such drops are not leading to automatic cancellations, however. Netflix has renewed some titles, including Running Point and The Four Seasons, despite both losing more than half their audience between seasons, indicating that retention percentage alone is not the sole factor in Netflix's renewal decisions.
As we wrote when talking about the emerging content gap, the likely causes are a combination of multi-year gaps between seasons, short episode orders, and Netflix stubbornly persisting with a binge model that front-loads an audience instead of building one over weekly drops. Broadcast shows used to peak mid-run as word of mouth kicked in, while Netflix shows tend to peak on day one and slide from there. Both The Pitt (HBO Max) and Severance (Apple) grew audiences during their second seasons.
Netflix's total US viewing time grew by less than 2% last year, a period during which the platform released high-profile finales for both Squid Game and Stranger Things. While the company's share of total US television viewing has continued to grow, it is doing so more slowly than FAST alternatives.