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Raymond Snoddy 

Can Local TV be the Next Big Thing?

Raymond Snoddy

It would be heart warming, says Raymond Snoddy, if local TV were to establish itself and outlive the period of Government-imposed subsidy that will kick-start it. But to do so it will have to confront and overcome a number of harsh challenges.

There are the usual high profile subjects and issues at this week's Edinburgh International Television Festival. There will be a full house for actor Kevin Spacey's MacTaggart memorial lecture and everything from Tony Hall's "big decisions" to the meaning of Big Data will be examined in detail.

But there on the opening day will be a session devoted to Local TV - The Next Big Thing?

It's not clear how much attention will be given to the question mark in the session's title. The audience will hear from Jane Mote, launch programme director of London Live, and Bobby Hain of STV Glasgow and STV Edinburgh on the implications of creating 50 new newsrooms around the UK.

Nigel Dacre, who chairs the Local TV Network, the trade body made up of the owners of the 19 licences, who is also a director of Notts TV, will highlight new ways of collaborative working in television.

The session will at least serve to emphasise the fact that local television, once a slightly crazed glint in former Culture Secretary Jeremy Hunt's eye, is actually happening - and soon.

The first of no less than 19 stations will launch across the UK later this year, the rest in 2014. There could even be a new wave of local TV stations in 2014-15.

Pondering whether local TV really is The Next Big Thing sounds a bit like whistling in the dark at the moment but something, at least, is happening and soon we will be able to judge whether Hunt was on to something - or not.

The new sector has the benefit of a Government-imposed "subsidy" from the BBC licence fee of £40 million - £25 million for the infrastructure and a further £5 million a year for three years in the form of purchase of filmed items.

It will be interesting to see how many of them the BBC is able to find a use for in its output.

With the help of the Government money, Comux UK, the company chosen to build the network, is forging ahead and recently announced its technical partners.

Ed Hall, Comux's chief executive says, perfectly fairly, that the scale of the project is much larger than anything that has been done for local TV before.

It is also clear that a lot of very experienced people are joining the passing bandwagon, not just Dacre, a former editor of ITV News, but also Sir Michael Lyons, the former chairman of the BBC Trust who is involved with Your TV, the company planning to launch stations in Manchester, Blackpool and Preston.

Then there's Stefano Hatfield, former editor of both The London Paper and the i who is editorial director of London Live - without having any previous experience of television.

Made TV, the company that won licences for Bristol, Cardiff, Leeds and Newcastle, is chaired by Ian West the former BSkyB executive and co-founder of Top Up TV and has Tom Moloney, former Emap chief executive as a director.

Such illustrious media people must know something, mustn't they?

We are indebted to the Guardian for details of a memorandum Made TV has sent to potential investors seeking to raise £5 million.

The document forecasts profits of £5.6million on revenue of £13.8 million for the fifth year of operations and suggests that after losing £2.4 million in its first year, Made TV will be in the black in year two.

With less than 100 staff the company believes it can break even at each of its stations on revenues of less than £1 million a year and that revenue will come from local advertisements costing as little as £10 a pop.

Rather tellingly, Made TV is trying to attract investors by dangling the prospect that the company can benefit from the inevitable consolidation that will get under way in the "highly fragmented" local TV market.

So it may be confident of its own financial prowess but is clearly less confident many of the other local TV operators can survive on their own.

It would be nice, heart warming even, if local TV were to establish itself and outlive the period of subsidy.

To do so it will have to confront and overcome a number of harsh challenges.

When asked, people say they would like to see more local television and then resolutely neglect to watch it. Local newspapers, radio and online may all be better suited to delivering local content in a more cost-effective way than television.

This problem is compounded if what is offered is cheap-and-cheerful television produced by work experience youngsters who want to find a career in TV or by volunteers from the local community.

Being granted Channel 8 on the Freeview EPG in England and Northern Ireland is a boon - down among the merchandise channels would never work.

But there is a downside. The standards and appearance of the local channels will inevitably be judged by the quality of the much more highly funded channels that surround them.

The combined result could be low audiences - very low audiences indeed and that will make it difficult to sell advertising - any advertising when the novelty of the £10 slot wears off.

Even in London the concept of local is problematical. Those interested in international and national news affecting all Londoners are already well served.

How long would I have to wait for a story about Ickenham in West London, the only true locality that interests this local resident?

The 19 stations should get together through LVTN to offer a national package to advertisers in the way that local and regional newspapers have finally done. For that to happen there would have to be evidence of significant audiences.

The danger is that if even modest audience targets are not met initially it would be easy for an aura of failure to develop around local TV.

Unfortunately there is a history of failure here from Group M in Manchester to the local station in Oxford, though circumstances are now rather different.

So jump to it guys - prove the sceptics wrong and establish Local TV as the Next Big Thing.

I launched L!VE TV with Ms Street Porter and Mr McKenzie in 2005. As ad sales director it was my responsibility to sell local ads to local advertisers in Birmingham, Liverpool, Manchester, Edinburgh, Glasgow and Newcastle. The local news remit was an implicit part of the programming output that is in today's local TV business modelling.

In 1995 there were circa 100 TV channels, today a 1000. Advertising budgets have not moved with inflation and neither have advertisers need for a ROI from either a local or national perspective. Audiences want quick fix's of national and regional news.

The audiences for these local channels will be minuscule for the third rate local news reporting. The ad revenue generated will reflect this. No surprises that neither ITV or Sky bothered to tender.

Now of course Topless Darts did attract advertisers, but without an idea driven programme schedule created daily by a tabloid editor with stupendous PR skills, the business model does just not stack up. All of these businesses will have closed by 2016.

Local radio! Now there's an idea and it's been around successfully for over 30 years.

The London Silver Company. Com
CEO
Mark Taylor
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