BBC Trust rejects local online video proposal

The BBC Trust has rejected plans to invest £68 million in a web-based local video service across the UK.

The Trust said the proposal would not improve services enough to warrant “either the investment of licence fee funds or the negative impact on commercial media”.

Sir Michael Lyons, chairman of the BBC Trust, said: “It is clear from the evidence that, although licence fee payers want better regional and local services from the BBC, this proposal is unlikely to achieve what they want.”

The Trust and Ofcom conducted a public value test to look at how the service would impact on the public and the market, after the BBC proposed upgrading its local BBC websites.

The BBC wanted to add a number of new features to the local sites, including video footage in stories, covering local news, sports and weather in 60 areas of the UK as well as adding five Welsh language sites.

The proposed service would have cost around £68 million, which included employing 400 staff, over a four-year period from its launch.

However, the media regulator Ofcom said its Market Impact Assessment (MIA) of the BBC Local video service proposal concluded that the service would have “a significant negative impact on commercial providers.”

The Trust agreed, adding: “We also recognise the negative impact that the local video proposition could have on commercial media services, which are valued by the public and are already under pressure.”

The MIA found that if the BBC local video services were launched, commercial providers’ annual revenues could decline by up to 4%.

Sir Michael Lyons said: “We believe the BBC’s priority should be improving the quality of existing services. The public wants better quality regional television news programmes and more programmes of all kinds produced in and reflecting their areas.

“We would expect BBC management to consider carefully the conclusions of this public value test before returning to us with new proposals.

“Our decision today to refuse permission for local video means that local newspapers and other commercial media can invest in their online services in the knowledge that the BBC does not intend to make this new intervention in the market,” he concluded.

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