Stephen Temple

The UK Minister for Media Jeremy Hunt is a man with a mission…to kick start local TV in the UK. What are the prospects for success?

On the positive side the Minister starts his case off well by pointing to examples in the world where local TV has been a success and the USA in particular.

Another plus point is that the cost of capturing video, processing it and transmitting it has plummeted over the past two decades…what was a quite ridiculous sum of money to equip a modest TV studio in 1991 is now a much more modest sum of money in 2011. As for outside broadcast…we now have the humble mobile phone doing a quite respectable job reporting live events from around the world for our 24 hour News Channels.

It is not as if there is not a demonstrable need. Most of us are extremely badly served with really local news on TV by the current broadcasting organisations. When the BBC cuts away from the main news bulletin to what it heralds as…”the news where you are”… it usually concerns locations many people have never visited in their lives…and in many case never want to. The degree of localisation falls well short of what people want.

These factors add up to something worth exploring.

The history of TV is not encouraging. TV broadcasting in the USA was born locally and national channels came about later through syndication on top of these local building blocks. TV in the UK started nationally and the networks were never structured to be broken down to really local distribution. In the 1980’s an effort was made to correct this. Mrs Thatcher’s Government deliberately structured cable TV into local franchises to capture this same gap Mr Hunt is keen to fill.

Many of these local cable TV franchises actually started local TV channels. Then Cable found itself in head to head competition with Rupert Murdock’s BSkyB – a national franchise courtesy of the Government of Luxembourg (the Astra broadcasting satellite).   Cable TV found itself without the scale economies to compete for film and sports rights and was forced into a hugely expensive consolidation. Somewhere along the road all the local TV was squeezed out for the simple reason…it was not making money…BSkyB was.

Fast forwarding to today and the media landscape is changing. Local News papers are under pressure blocking off that potential point of leverage. Public finances (and the BBC funds) are under pressure – ruling out public subsidies. We see the huge cost pressures ITV, Channel 4 and Channel 5 find themselves under with rising costs of making the compelling TV programmes necessary to attract mass audiences supported by highly constrained advertising revenue. It is a model under pressure with absolutely no prospects of developing any local TV roots..

There is also a growing pressure arising from technology change. The rise of the hard drives in TV sets that allows us to record TV programmes for later viewing also relieves us of the need to sit through advertising breaks.  Google now offers advertisers far more targeted advertising on a mass scale. The TV finds itself in competition with the PC for our attention.

One might be tempted into the conclusion that these technology driven factors are the last nail in the coffin for the prospects for local TV. However many people are advising Mr Hunt that the opposite is the case. The new Internet technologies may offer the very entry point for the viable local TV service Mr Hunt is seeking.

Instead of trying to swim against the tide of technology change…they suggest…why not swim with it? All the elements are there. The mass audience from millions of broadband homes and smart mobile phones. There are absolutely no barriers to segmenting audiences as small or as large as anybody might wish. A ready advertising model exists that can deliver very geographically targeted audiences. Most important of all…a massive rise in the sheer quantity of video over the broadband Internet…including millions of “local” video clips posted on U-Tube every week.

Many revolutions are events of chance determined entirely by their timing. My assessment is that Jeremy Hunt has the right idea and the real question boils down to the timing. Is it too late to shape the old TV landscape and too early to know the right formula to shape local TV over the new broadband Internet ?

Mr Hunt’s natural time window as a Minister probably allows him one shot at shaping a broadband Internet local TV future…the key is to get around him some key experts who really understand where video over the broadband Internet and Smart Phones is really heading. The burning question is how these trends can best be “localised” and focussed into the a critical mass…which is what success on TV and over the Internet both have in common.