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News Analysis: Is Jeremy Hunt’s vision for new local television services in the UK commercially viable?

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By The Drum Team, Editorial

January 19, 2011 | 3 min read

With today's announcement by Culture Secretary Jeremy Hunt centring around his plans to develop a TV network of local news, Charlotte Bell, director of Feather Brooksbank questions the commercial prospects for such a scheme.

Aside from the initial funding offered by the BBC, commercial viability for this initiative will be dependent on advertising revenue. Advertisers will only use the channels if they deliver their audiences cost effectively, so the key question in this debate is will anyone actually watch the new channels?

Hunt describes the services as “a new voice for local communities with local perspectives that are directly relevant to them” and it seems that there has been a bit of resurgence in the demand for all things local. In our own research of 10,000 adults across the UK, 56% say keeping up with local news is important to them compared to 49% just two years ago. However, in launching TV channels across the major cities Hunt’s definition of local seems to be somewhat at odds with consumer demand, as some 70% of the UK population defines local as their immediate village or town. Research suggests that the appetite for local news is hugely biased towards the over 55’s but they tend not to be living in the urban areas the new stations will cover.

Are young urbanites really going to tune in for local news and content? This need is currently being served by radio and locally focussed websites. I doubt that the new channels can deliver high quality content as cost effectively as these established competitors. Given the ever burgeoning array of media choice, to succeed, the new channels will need to deliver both relevant and high quality content and on television this doesn’t come cheaply.

From an advertisers perspective there is definitely a demand for media that can help build closer relationships with local communities, but localised on the ground solutions offer more effective routes to this than urban TV channels.

There is plenty of evidence that this is a difficult nut to crack. Take the example of Manchester’s Channel M, which many saw as the blueprint for restructuring local media. At its peak it was producing live news broadcasts five days a week, but it simply wasn’t commercially viable, and as a result it is now showing network news and archive content - hardly the high quality content consumers are looking for. However, it seems that its owners GMG are planning to re-launch the channel in the spring this year - maybe they know something we don’t!

So is Hunt’s vision really commercially viable? In our view it isn’t as we would question whether these channels can actually deliver the high quality content required to attract the target audience at a low enough cost.

BBC Featherbrooksbank ITV

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