Jeremy Hunt# needs to rethink the saga of local TV
Local TV# that is free of subsidy and sustainable may be unachievable but will the culture secretary reconsider his plan?
The saga of local TV is beginning to resemble an extended episode of Yes Minister. On the one hand there is the evident and heartfelt commitment of the minster (Jeremy Hunt) to the big idea of genuinely local TV type services –his contribution to the big society", no less.
else that in the terms he has set for it – that it must be commercially sustainable and free of subsidy, it can simply not be made to work. But because the government is new and the minister's commitment plain, no one has really wanted to tell him that. It has been as if the emperor has no clothes.
The committee set up by Hunt to investigate the commercial prospects for local TV (under the merchant banker Nick Shott – he picked a merchant banker presumably in the belief that such a person would have a sharp eye for investment opportunities) is due to deliver its final report this week. His interim report tried to use positive language and even held up the prospect of superfast broadband as a potentially cost-effective way of delivering local TV#.
But the underlying message was clear: "It has been difficult to see a clear path to commercial viability for local TV." Since then members of his committee have graced other public platforms and spoken in much clearer terms. There is no purely commercial model that can support Hunt's vision. To stand any chance of working, local TV# will need quite a lot of government help – in the form of gifted (free) spe#ctrum on digital terrestrial TV and due prominence for such services on EPGs – neither of which is straightforward – and even direct cash subsidy. And whatever language he chooses to use, that is what Shott's final report, this week, will #say.
So where does that leave our minster? Well, at least new players are starting to gain the minister's enthusiasm. A proposal from a group calling itself Channel 6 offers the superficially attractive idea of a new national network, with local affiliates of different size and scale depending on location supplying the local content.
But this plan is predicated on free spectrum and a guaranteed EPG placing at 106#. A spine of attractive network programming – including apparently, drama and films – would form the cash, reach and impact generating core from which the local services would opt out.
But the minister should beware of TV executives bearing gifts. Look a little closer and you may wonder what kind of network service could be run for the £150m a year the operators have in mind. Channel 5 struggles to make an impact with more than that.
In short, it is not at all clear that the UK market can stand another free-to-air commercial TV network at all – although free spectrum and such high EPG prominence may persuade someone to give it a try. In any event, on this model the fledgling local services depending on it would more than likely come to be seen (like ITV's regions) as a barrier to commercial efficiency.
Meanwhile# something else, potentially rather more significant, has also changed. The minister has negotiated a new licence fee deal with the BBC, which includes a £25m one-off sum to assist local TV startups and an ongoing commitment to buying £5m a year of content from them. Leaving aside the details of how either of these schemes might actually operate (like who gets the cash, who gives it, and how ... ), our minister would appear to have turned turtle here.
Wher#e once the licence fee was absolutely not to be used for local news beyond the BBC, and any form of state subsidy was to be avoided, both are now apparently in play. Which may mean that some local stations based around larger cities (which is what Shott seems most likely to suggest to Hunt later this week) could stand a chance of getting started.
But rewind to where this all began, and the last government's idea of new local services (IFNCs#) replacing ITV's own regional provision on button three. The really attractive thing about that was that these new local services got access to ITV's huge reach and impact – a legacy of its first 30 years# as a state-licensed monopoly – and with it a real shot at brand building and even commercial viability on their own account. Understandably, the new regime at ITV ran a mile but the government# rejected IFNCs# because of the licence fee subsidy attached to them.#
So#, if that's no longer an issue. might the minister think again? That, as Sir Humphrey may have said, would be a very brave decision indeed#.
Local TV# that is free of subsidy and sustainable may be unachievable but will the culture secretary reconsider his plan?
The saga of local TV is beginning to resemble an extended episode of Yes Minister. On the one hand there is the evident and heartfelt commitment of the minster (Jeremy Hunt) to the big idea of genuinely local TV type services –his contribution to the big society", no less.
else that in the terms he has set for it – that it must be commercially sustainable and free of subsidy, it can simply not be made to work. But because the government is new and the minister's commitment plain, no one has really wanted to tell him that. It has been as if the emperor has no clothes.
The committee set up by Hunt to investigate the commercial prospects for local TV (under the merchant banker Nick Shott – he picked a merchant banker presumably in the belief that such a person would have a sharp eye for investment opportunities) is due to deliver its final report this week. His interim report tried to use positive language and even held up the prospect of superfast broadband as a potentially cost-effective way of delivering local TV#.
But the underlying message was clear: "It has been difficult to see a clear path to commercial viability for local TV." Since then members of his committee have graced other public platforms and spoken in much clearer terms. There is no purely commercial model that can support Hunt's vision. To stand any chance of working, local TV# will need quite a lot of government help – in the form of gifted (free) spe#ctrum on digital terrestrial TV and due prominence for such services on EPGs – neither of which is straightforward – and even direct cash subsidy. And whatever language he chooses to use, that is what Shott's final report, this week, will #say.
So where does that leave our minster? Well, at least new players are starting to gain the minister's enthusiasm. A proposal from a group calling itself Channel 6 offers the superficially attractive idea of a new national network, with local affiliates of different size and scale depending on location supplying the local content.
But this plan is predicated on free spectrum and a guaranteed EPG placing at 106#. A spine of attractive network programming – including apparently, drama and films – would form the cash, reach and impact generating core from which the local services would opt out.
But the minister should beware of TV executives bearing gifts. Look a little closer and you may wonder what kind of network service could be run for the £150m a year the operators have in mind. Channel 5 struggles to make an impact with more than that.
In short, it is not at all clear that the UK market can stand another free-to-air commercial TV network at all – although free spectrum and such high EPG prominence may persuade someone to give it a try. In any event, on this model the fledgling local services depending on it would more than likely come to be seen (like ITV's regions) as a barrier to commercial efficiency.
Meanwhile# something else, potentially rather more significant, has also changed. The minister has negotiated a new licence fee deal with the BBC, which includes a £25m one-off sum to assist local TV startups and an ongoing commitment to buying £5m a year of content from them. Leaving aside the details of how either of these schemes might actually operate (like who gets the cash, who gives it, and how ... ), our minister would appear to have turned turtle here.
Wher#e once the licence fee was absolutely not to be used for local news beyond the BBC, and any form of state subsidy was to be avoided, both are now apparently in play. Which may mean that some local stations based around larger cities (which is what Shott seems most likely to suggest to Hunt later this week) could stand a chance of getting started.
But rewind to where this all began, and the last government's idea of new local services (IFNCs#) replacing ITV's own regional provision on button three. The really attractive thing about that was that these new local services got access to ITV's huge reach and impact – a legacy of its first 30 years# as a state-licensed monopoly – and with it a real shot at brand building and even commercial viability on their own account. Understandably, the new regime at ITV ran a mile but the government# rejected IFNCs# because of the licence fee subsidy attached to them.#
So#, if that's no longer an issue. might the minister think again? That, as Sir Humphrey may have said, would be a very brave decision indeed#.