Can Hunt’s local TV plans defy history?

Posted by Julia Glotz Monday, June 14th, 2010

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A thriving local television landscape has long been on the wish list of UK politicians but, over the years, success has been elusive. Numerous providers tried and failed to make a go of local TV using cable networks or analog spectrum through so-called restricted services licenses (RSLs). Back in the 1990s two big media groups – the owners of the Daily Mail and Daily Mirror national newspapers – tried to make a splash in local television on cable with their respective Channel One and L!ve TV ventures. Despite pioneering concepts – video journalists (Channel One), topless darts (L!ve TV) – both channels flopped.

RSL “city TV” channels have had limited success and even the well-regarded Channel M, the Manchester-based local channel owned by Guardian Media Group, has recently been forced into drastic cost-cutting and staff lay-offs, showing that, even for an established and relatively high-profile business, local television can still be a difficult proposition.

This is not just the case in the UK. Elsewhere in Europe, local channels on Spain’s digital-terrestrial network have closed or handed back unused licenses (although Spain has plenty of publicly-funded regional channels, which is not the case in the UK).

Part of the problem is that, while local content tends to come up high on the list when people are asked about what they want on television, such enthusiasm does not typically translate into actual viewing. The view that local television is something that people want and that ought to exist does not in itself create a viable business model.

Jeremy Hunt, the new secretary of state for culture, media, Olympics and sport, this week delivered his inaugural speech on UK media policy and put local TV firmly on his agenda. Hunt, chasing success where others have failed, plans to scrap the Labour government’s controversial regional Independently Funded News Consortia (IFNC) and to relax cross-media ownership rules.

Much of Hunt’s analysis of what was wrong with the IFNC idea of taking television license-fee money and using it to fund regional news to replace what is produced today by ITV is sound – particularly his concern that such consortia would foster a generation of “subsidy junkies” unable to make the jump into commercial viability.

But, while it will win him plaudits in some sectors of the media, Hunt’s deregulatory approach is not without its problems – particularly the idea of going beyond the relaxation of ownership rules recently proposed by Ofcom to scrap restrictions on local ownership altogether.

Much will depend on how the “sensible regulatory environment” envisaged by Hunt would deal with concerns about local monopolies that control print, TV and radio. A difficult macroeconomic climate could make it particularly hard for smaller players to prosper alongside dominant players.

But while diversity of media ownership and of opinion is undoubtedly a good thing, if the choice in terms of local television is one voice or no voice then maybe it is a principle worth sacrificing, subject to certain safeguards – on editorial impartiality, for example.

Hunt talks of multiple revenue sources that could be used to finance local-television initiatives and cites product placement as one possibility. It will be interesting to see whether this means that further relaxation on product-placement rules – over which the last government performed an embarrassing volte face – is now on the cards.

The suggestion that local broadcasters could sublet spare broadcast capacity as a further potential source of revenue indicates that the new government remains tied to the notion that local TV is something that ought to be delivered using television spectrum. Such an assumption deserves to be interrogated in the light of the availability of cheaper and more effective distribution mechanisms online, especially if Hunt lives up to his ambitious promise of delivering Europe-leading broadband speeds by 2015.