Red lines are our best estimate of costsBlue lines are our best estimate of benefitsThe gap between cost and benefits is between £38m-64m in 2012The single biggest PSB cost attributable to the Channel 3 network is the production cost of regional news which is estimated at £68 million in 2010, and projected to be £72 million in 2012, based on current production costs. These costs are after the regulatory changes made in the PSB Review.It is notable that the production cost of regional news is very similar to the scale of the opportunity cost deficit across the Channel 3 network.This data is based on the figures supplied by the ITV regional broadcasters. As we outline in our LRM report, we have also commissioned an independent assessment of production costs which has produced a similar set of figures.
Consumers value local and regional content92% consume some form of local media at least weeklyOver half say local/regional news on TV is very important while over a third say the same for paid for local newspapers and local radioIts also worth saying that more people view early evening regional news programming on the BBC and ITV than watch the combined UK-wide network news programmes around the same time (8.7m vs 8.2m) – 10% higher
Using capacity on existing DTT multiplex (channel 6 proposal)Capacity reserved by Government for UK-wide local TV network (from 2012)24-hour sustaining service accompanied by locally-targeted outputWould deliver reach and impact but significant opportunity cost of interventionUsing new spectrum made available by DSOGeographic interleaved spectrum could deliver local TV services in up to 81 sites in UKOperators could create quasi-national network of local stations around single sustaining feedAlternatively, operators might bid for individual packets of spectrum to run local services independent of each other
A new future for Local TV in the UK?<br />Kate Stross, Ofcom Director of Content<br />Lokalrundfunktage 2010, July 7th 2010<br />
A new vision for local television<br />“I have long believed that the lack of high quality local TV is one of the biggest gaps in British broadcasting.”<br />Jeremy Hunt MP, Secretary of State for Culture Media and Sport<br />8 June 2010<br />1<br />
The existing channels<br />Wholly commercial channel owned by Guardian Media Group. Now on digital terrestrial, cable and satellite. But programme plans significantly scaled back in 2010<br />Community model supported by grants from regional and educational bodies. Mix of professional (mainly freelance) labour and volunteers. Emphasis on training <br />Privately owned channel aimed mainly at ethnic Asian community in Leicester. Strong links with broadcasters in India to source content<br />Small scale service run on semi-amateur basis. Contains local news and sport.<br />3<br />3<br />
Why has local TV not developed further in the UK?<br />No public subsidies available for local TV <br />Thriving local media sector dominated by newspapers and local radio<br />Scarcity of suitable analogue spectrum for local TV – and low level of take-up for cable alternatives<br /> Restrictions on local TV licences - short terms and low-power transmissions<br />4<br />
UK has well-developed system of regional TV<br />Map of ITV TV regions<br />Map of BBC TV regions<br />5<br />
High quality regional TV supported by “PSB compact” for commercial licensees<br />Near monopoly in TV advertising made ITV regional franchises a “licence to print money” (attrib. Lord Thomson of Fleet 1958)<br />Broadcasters competed to win licences by making significant public service commitments – including regional programming<br />But resulting public expectation of high quality TV programming may have harmed prospects for low-budget alternatives<br />6<br />
Digital TV and the internet have changed the economics for ITV<br />Millions<br />Ranges between higher and lower values based on current best estimates<br />Cost Benefit of PSB status for the Channel 3 network<br />Source: Ofcom <br />7<br />
Consumers value local and regional content – especially news<br />% saying local and regional content is very important - weekly users<br />Scores based on respondents importance rating 9/10 on a scale of 1-10. Source, Ofcom research PSB Review 2008/9<br />8<br />
The emerging ambition<br />By 2015, credible city-based local network of stations established and broadcasting news and other content on television and online<br />Content produced and broadcast on a commercially sustainable basis<br />News and content relevant for local audiences contributing to plurality and democratic purposes <br />Community engagement and contribution to media skills and training<br />9<br />9<br />
The economics for fully commercial local TV are challenging<br />Only London and Manchester could support stand-alone commercial stations in UK advertising conditions (based on achieving a 1.5% audience share)<br />Cumulative loss for all 15 cities is (£2.8m)<br />Source: Oliver & Ohlbaum study for Ofcom<br />10<br />
Local TV could develop in the UK in a number of ways<br />Using capacity on an existing or new DTT multiplex<br /><ul><li>Digital capacity could be reserved by Government for a UK-wide local TV network
Local services could be inserted into a nationwide channel</li></ul>Using new spectrum made available by digital switchover<br /><ul><li>Broadcasters could obtain their own local broadcast spectrum either by auction or by reservation
Opportunity to develop local multiplexes carrying a number of services</li></ul>11<br />
Television regulation measures that might improve prospects for Local TV <br />12<br />
Next steps..........<br />Over the next 12 months Government will examine the economic, technical and regulatory measures, costs and consequences of the various options<br />Government has already appointed an independent advisor to build the economic case for Local TV <br />Ofcom will provide specific technical and regulatory advice, including in relation to:-<br />Spectrum issues/DTT capacity issues<br />Content regulation<br />Licensing<br />14<br />
Kate Stross, <br />Ofcom Director of Content<br />15<br />
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