ITV is to launch a pay-TV channel on Sky showcasing the "best of British drama", its first major return to pay-TV since the collapse of ITV Digital more than a decade ago.
The channel, ITV Encore, will be a home to some of the broadcaster's recent successful dramas, such as Vera and Lucan.
From next year ITV will also populate the channel with original commissions.
The move is chief executive Adam Crozier's biggest to date in a strategy to diversify the broadcaster's revenues away from an overwhelming dependence on free-to-air advertising.
"A key part of our strategy is to become the most watched, most loved and most talked about family of free and pay channels for every household and every advertiser in the UK," said Crozier. "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."
Crozier said that ITV Encore, which is the broadcaster's first brand new channel launch in eight years, will complement ITV3, which airs long-running classic drama series.
Under the dea, ITV Encore will be made available on Sky for an undisclosed "period of exclusivity", which will give the satellite broadcaster a chance to use it as a drawcard for new customers.
"It is another reason to talk to new customers who don't have Sky, it won't be available on rivals at first," said one observer.
ITV Encore will launch this summer, the critical question of how prominent its channel slot will be on the electronic programming guide is yet to be finalised, and will be available to existing Sky customers at no extra cost.
For new customers, it will be available as part of Sky's 35-strong entertainment channel package – which includes Sky1 and Sky Atlantic – which costs £21.50 a month.
The launch builds on a pay-TV relationship with BSkyB that Crozier started in 2010 which saw ITV dip a toe in the water by putting HD versions of ITV2, 3 and 4 behind the satellite broadcaster's subscription wall.
"The time is absolutely right to build on our successful partnership with Sky with the launch of ITV Encore, which will be an important part of ITV's family of channels, and will complement ITV3," said Crozier.
The move to launch ITV Encore is a major step forward, ITV's first major move in pay-TV since the collapse in May 2002 of ITV Digital, the digital terrestrial subscription business backed by ITV companies Carlton and Granada.
As part of a wider deal ITV content will be made available through Sky's range of platforms including Sky Go, Sky Store and Now TV.
"Our customers love great drama and so we are delighted to bring them exclusive access to a new channel from one of the best loved brands in TV," said the BSkyB chief executive, Jeremy Darroch. "The wider availability of ITV programmes on our fast-growing connected TV services will make Sky stand out as a great place to enjoy ITV, on multiple devices, both at home and on the go."
The deal includes the launch of ITV's catchup, archive video-on-demand service and simulcast of ITV channels on mobile service Sky Go.
ITV Player will also be made available on SKy's £9.99 budget set-top box, Now TV.
The broadcaster has also renewed its carriage deal for ITV2, ITV3 and ITV4 HD.
ITV first started seriously considering a return to pay-TV in early 2010 when Archie Norman, who had just started as chairman, said that the broadcaster needed to develop a "very different product" than just making ITV2, ITV3 and ITV4 subscription channels.
Following Crozier's arrival in April 2010, he revealed that pay-TV was part of his five-year strategy to transform ITV and make it less reliant on free-to-air TV advertising.
In August 2010 he unveiled the broadstrokes of the strategy, which included a small-scale deal to put the HD versions of ITV2, 3 and 4 on Sky's pay-TV platform, but it is known that ITV was also looking at how to launch a new standalone channel brand at that time.
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