LOCAL TELEVISION – THE MIRROR GROUP AND CHANNEL 6 PROJECTS, 1994-99 AND 2010-14
Commercial local TV has been attempted a number of times in the UK. It has always been challenging because broadcast TV advertisers only buy large audiences, and local TV by definition delivers relatively small ones.
In the 1990s, I developed a strategy for the national newspaper publisher, Mirror Group PLC, to square this circle: a nationally broadcast channel working with local newspaper partners to make locally focused opt-outs. Our national backbone could afford to provide and promote high enough quality entertainment programming – and consequentially win big enough audiences to attract TV advertisers – and shared the resultant advertising revenue with our local affiliates who produced the local programming that distinguished the service.
Apparently similar to ITV and its regional opt-outs, it was in fact the reverse. ITV had started as profitable regional monopolies in the 1950s, which progressively coalesced from the 1980s into a national channel in response to growing national commercial competition – first from Channel 4, then Channel 5, and later Sky and others. Launching into this competitive context, local TV therefore needed to start with national scale, and differentiate itself by adding unique local content.
As the division's Managing Director, I built the Mirror Group's local TV network on this basis and brought it to profit. But it was discontinued after the Mirror Group was acquired by Trinity International in 1999 and returned to its core printed newspaper publishing activities.
When the Coalition Government came to power in 2010, Jeremy Hunt MP – then Culture Secretary – launched a plan for a new network of local TV stations around the country as Public Service Broadcasters. PSBs are given free terrestrial broadcast capacity and mandatory on-screen listing prominence in exchange for delivering socially valuable programming that might not otherwise be commercially viable.
I ran a high profile PR campaign and personally advised Mr Hunt on how best to structure British local TV based on my earlier experience, which advice was reflected in a Government White Paper published in early 2011. Following further public consultation, the Government was instead persuaded to follow a different approach of separate local stations without a national spine.
Nevertheless, as London had been identified as a single local territory, I formed and led the Channel 6 Consortium with London's three main hyperlocal newspaper publishers to bid for that franchise. I did this as London is the only ‘local’ territory big enough to hope to attract sufficient audiences – and therefore advertising – to be potentially viable commercially.
But this viability was still dependent on including enough top quality entertainment programming that audiences (and therefore advertisers) would want. We felt that a standalone local station could only afford this by becoming an affiliate of a major TV company – in our case Sony Television, with its extensive TV and movie library already paid for by global broadcast sales. Again, our channel would be distinguished by local news and current affairs not available elsewhere, as well as benefiting from its PSB rights for including local programmes. But its viability would be underpinned by a lot of prime time entertainment.
I led another PR campaign, involving not only media coverage, but also extensive political and regulatory lobbying for our bid. In the end, though, the PSB franchise was awarded to the London Evening Standard in exchange for a commitment to 100% local programming. We made a deliberate decision not to make what we considered an unviable bid to compete with this.
The Standard's London station – along with the other local TV stations – has indeed proved unviable without entertainment programming comparable to that of its national competitors. This has inevitably led to major cost-cutting; substantial reductions in both the amount and quality of the promised local content, with schedules bulked out by low cost generic material; and consequently to modest viewing and advertising revenues.
Another predictable result of the Government's chosen strategy is that local TV consolidation has progressively taken place across the country, trying to reverse engineer some of the economies of scale that my proposed national strategy was designed to deliver from the outset. A critical difference between this consolidation and ITV’s, however, is that local TV has been combining generally unprofitable, cash-consuming businesses, making this a real challenge.