[cma-l] The Guardian: Jeremy Hunt to make local content a condition of public service licences

[CMA-L]

Source: http://www.guardian.co.uk/media/2010/sep/28/jeremy-hunt-local-psb

Broadcasters will have to deliver a certain amount of local content to
guarantee top slots on digital TV programme guides

Jeremy Hunt, the culture secretary, will seek to encourage commercial
public service broadcasters (PSBs) including ITV and Channel 4 to back
a new generation of local TV and online services by making provision
of this content a condition of their licences.

Hunt is to warn commercial PSBs today that if they want to retain
highly coveted prime positions on digital TV electronic programme
guides (EPGs) they will have to guarantee to deliver a certain amount
of local content. In a speech to a Royal Television Society conference
in London, Hunt will focus on how local content delivery could be
guaranteed in the future.

However, Hunt is pressing ahead with his local TV plan against a
backdrop of industry scepticism about the commercial viability of the
proposals. The panel advising Hunt on the viability of launching as
many as 80 local TV stations, led by Nicholas Shott, the head of UK
investment banking at Lazards, , also cautions today in its initial
findings that it is "difficult to see a clear path to commercial
viability of local TV".

The culture secretary will ask the broadcasting regulator, Ofcom, to
"redefine" public service broadcasting by ensuring that more local
content is delivered as a requisite for holding a licence. The PSB
licences held by ITV, Channel 4 and Channel 5 are up for renewal in
2014. Current PSB licence obligations only go as far as guarantees on
content to a regional level – and only for ITV Channel 3 licensees.

"I will begin the process of redefining public service broadcasting
for the digital age by asking Ofcom to look at how we can ensure that
enough emphasis is given to the delivery of local content," Hunt will
say. "Of course not all PSBs will want, or be able, to be local
broadcasters. But I'm determined that we should recognise the public
value in those that do."

However, commercial broadcasters such as ITV have complained that the
benefits of holding an Ofcom licence are already at a point that they
are far outweighed by the costs of delivering PSB programming.

ITV has threatened to pull out of delivering regional news due to the
issue of future commercial viability. However, the broadcaster has now
softened its stance and is currently undertaking a review of its
national and regional news operation.

As a carrot, Hunt will say that the government may fast-track new
legislation guaranteeing PSBs the key slots on EPGs. "I intend to
bring forward new legislation to clarify which PSB channels should get
guaranteed positioning on page one of the electronic programme guide
and its future online equivalents," he will add. "As we move into a
multichannel, multiplatform era, this is likely to become the
principle intervention through which we repay broadcasters who invest
in content with a social or cultural benefit."

Hunt will say that he was also encouraged at the role the BBC might
play in helping to deliver local content. "I've been strongly
encouraged by the serious thought that the BBC has been giving to how
it might partner with new local media providers," Hunt will tell the
RTS conference. "In the weeks and months ahead, I will be looking at a
variety of ways in which our existing public service broadcasters can
play their part in supporting the development of a viable and
sustainable local TV landscape."

Shott's four-page letter to Hunt outlining the initial findings of the
local TV advisory panel calls on the government to focus not on local
TV channels but on local TV services, something that Hunt appears to
have taken on board in his speech.

The Shott panel said that to make a fist of it, local TV businesses
would have to work together to share costs and "promote the generic
concept of local TV and to improve the national advertising revenue
proposition … In particular we believe that having a channel number
for local TV which is common to all such services and which is in a
prominent position on the EPG is highly desirable," added Shott.

However, he said that even with huge co-operation among local TV
businesses it will "still be a great challenge to build an audience
from scratch and maintain it". As a result, the advisory panel is now
looking at "some form of support" from existing broadcasters, with two
options tabled.

The first is for an existing national channel to be a "host" with
audiences directed to local services at certain times of the day.
Red-button interactive services could be used to deliver this. The
alternative is for the national PSB channels to have a "pop-up prompt"
at certain times of the day telling viewers that local TV services can
be accessed interactively.

Ultimately, Shott said the panel believed that internet TV, not
digital terrestrial television (DTT), holds the most promise for
delivering local content to TV sets. Internet TV would, he added, also
present an opportunity for organisations such as newspaper publishers
to "maintain, if not recover, classified advertising revenues through
the facility of [internet TV] to combine video, text and web links".

However, the Shott panel estimates that internet TV technology is
"some years away from reaching worthwhile market penetration" and that
the government should limit its short-term plans to a "select number
of local TV services" in major cities, delivered via DTT.

Source: http://www.guardian.co.uk/media/2010/sep/28/jeremy-hunt-local-psb

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