Written by Media, TV

Local TV

Today, Culture Secretary Jeremy Hunt gave his backing to a new network of local TV stations built around the hub of a national spine. In other words, it’ll be a national service with local opt-outs at various times of the day.
Hunt has been talking about this for ages, often with hackneyed references to Birmingham in the West Midlands not sustaining a local TV service, but Birmingham, Alabama sustaining several. That particular argument is specious. US network (i.e. non-cable) television is built around a patchwork of local affiliates to networks. Major local stations affiliate themselves with a major network and take that company’s programming in exchange for handing over much of the advertising inventory. They get to keep some, but if they want to make money themselves locally, they’re largely reduced to their local news shows. That’s why stations that often carry nothing but re-runs, might still have local news and weather.
Anyway, this has been Hunt’s bugbear for some time. He wants local television, even though it’s uncertain that it can be sustained. For starters, there’s the spectrum. Channels on Freeview (and in a post 2012 world, TV will be 100% digital) are sold for an awful lot of money. A full 24 hour space can retail for upwards of £10m a year. That’s before you’ve kitted a studio anywhere or shot a single minute of programming.
Everyone is convinced that there is local advertising money to be found. That is, money that’s not already being taken by other media – local press, local radio, the internet (which is becoming ever more localised) and outdoor. I’m just not certain that it’s there. Yes, there are advertisers in somewhere like London who can’t afford to go on television because the prices are just too high. But if they go on a local “channel 6” then that money is going to come from somewhere. Will it further damage local press that has already lost vast chunks of its classified revenues to the internet? Or local radio, which is largely going in the opposite direction, removing as many local responsibilities as possible and broadcasting in national or quasi-national networks.
Indeed, if I was a local media owner, I’d be distinctly unhappy that a government sponsored new entrant was entering my market to compete with my privately owned business. There just aren’t advertisers kicking around with cash burning a hole in their pocket that would otherwise be unspent. It is fair to say that some of those local media owners might want to apply for these licences. Indeed, I find it very hard to determine how the services might be achievable were the news gathering operations not serving multiple media.
Hunt seems to have adhered to the findings of the Shott Report which placed a far more conservative limit on the number of sustainable services than someone like Greg Dyke. Shott talks about 10-15, whereas Dyke thinks more like 80 services is achievable, a notion I find laughable.
It’s unclear to me how Hunt is going to force digital EPG like BSkyB’s and Virgin Media’s to place a new local network high up their respective guides. For one thing, there are some substantial costs to having upwards of ten additional channels being broadcast by satellite. And only this week BSkyB unveiled its new revised line-up of channels that’s obviously been years in the making to get some bigger services into higher EPG positions. Do they really want to bump everyone back down a position? For years, BSkyB has battled everyone before it to give credence to the notion that Sky1 is channel 6. And Virgin Media’s infrastructure will take some significant, and therefore costly, upgrades to cope at a sub-regional level.
The real problem as I see it is that the national spine of the channel – those parts that aren’t bargain basement hyperlocal news segments – is going to surely be pretty poor. There is going to be barely any money for new programming, so look forward to a schedule filled with cheaply acquired US programming; reruns of sitcoms and action series. I’d expect it to mostly be US programmes. There might be the odd gameshow if a format can be created cheaply enough. And given that two of our current three “terrestrial” commercial broadcasters already fill their night-time schedules with gaming and teleshopping, you can expect vast hours handed over to those occupations.
If a channel is as unappealing as I’ve just highlighted, then why would a viewer ever turn to it? While television is “appointment to view” and we switch to a programme when it’s scheduled, we’re far less likely to even discover the programme if we never watch that channel in the first place.
And how will these local channels be measured? Television is set-up on a regional basis at the moment, and the BARB panel is built to reflect those ITV regions. Going smaller than that is not an easy thing to do. Indeed, it’s very expensive. But without BARB, you don’t know who’s viewing. And that’s what determines ad prices. Of course in the US, they still have “sweeps” periods which use paper diaries to measure viewing. Is that we’re going to have here?
While this idea is nice in principle, I’m not sure that it’s practical. And at the worst end of the spectrum, it could actually be harmful to other local media providers. If local TV services in London and Manchester have failed – even if they were trying too hard to fill a 24 hour schedule with locally produced programmes – then I fear that even more local television will fail much faster.
The answer is surely to ensure that ITV maintains its local programming requirements and to stop backing down every time they make demands about reducing the levels they must produce. The notion that they could cut their hour of national and local news down to thirty minutes for example. CRR probably does need looking at as a quid pro quo.
In the meantime, I expect we’re going to see a few years of licence fee payers’ cash being wasted – because that’s where the money comes from.