CLIVE CROUCH: The challenge of Local-TV

Sky, Ofcom and News Corp engaged in heavy debate over Murdoch's bid for Sky.
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News emanating from Olympia this year appeared to surround the media rather than the toy industry.

As the media focused on Toy Fair, Sky, Ofcom and News Corp were engaged in a heavy exchange of words over Murdoch’s bid for Sky.

Jeremy Hunt, as Culture Minister is on the path to a referral to the Competition Commission. However, before confirming his decision, Hunt has allowed Murdoch more time to prove his bid will not have an adverse effect on media plurality.

Hunt’s situation lends itself to some classic football analogies. He finds himself in this position after Vince Cable’s own goal back in December.

Cameron had no option but to substitute Cable, bring on Hunt and force him into playing keepy uppy with the three interested parties. Then to top it all, after allowing Murdoch more time, Cameron gets accused of bias.

I had breakfast with Hunt this time last year. A very nice man. Just one of seven millionaires in Cameron’s cabinet. The purpose of our meeting was hi-jacked by his desire to talk about his commitment and passion for local-TV.

This subject is close to my own heart. In today’s multi-channel market, stretching from local-TV to newly launched Sky Atlantic is just what digital TV should be offering consumers and advertisers. Local-TV, though, doesn’t come easy.

Across the breakfast table Hunt spoke about Birmingham in Alabama, the town that supports seven local-TV stations. These are all funded by advertising. Birmingham in the West Midlands supports none.

Birmingham, Alabama is a very different place with a very different lifestyle. Hunt has researched the local market, however, Alabama is not a state best suited to a former pupil of Charterhouse School.

There’s little similarity beyond the name between the US and UK towns. The delivery systems would be very different – the US model is based on a local cable business affiliated to a US network, while Hunt’s UK version is based on a national TV affiliate network, which would provide opt-outs at certain times of day. Add Sky, Virgin and the EPG to the UK mix, together with different structures for the ad revenue and its distribution to stakeholders, and local-TV in the UK becomes a huge challenge.

Back at Toy Fair and some welcome respite came to support the Culture Minister, still juggling with the ball. Greg Dyke (no stranger to the game) announced the findings of his report on local-TV, taking the attention away from the news surrounding Hunt.

A prospect for up to 80 local-TV stations was some way north of the previous Shott Report that recommended scope for ten to 15.

Despite the size of the challenge to establish local-TV, the Culture Minister is expecting to receive expressions of interest by March 1st, with the first local-TV licences awarded by the end of 2012. There is no launch date as yet but a target of up to 20 local TV services by 2015.

This year at Olympia we saw how the digital landscape can facilitate more exposure for the event and the firms represented there. Telegraph TV, to name but one, really made a difference.

Given the geography of the toy industry across the UK and the huge PR effort that companies commit to, local-TV will serve to increase the opportunity for those who create stories from business to consumer, to end user.



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