What has local TV achieved so far?
Three years on from the launch of London Live, Raymond Snoddy analyses the current state of the market – and argues things have not been as catastrophic as many first expected
An anniversary of sorts is coming up at end of next month – the third anniversary of the launch of London Live, the flagship of former Culture Secretary Jeremy Hunt’s great foray into local television.
It is as good a time as any to access the health of the new sector particularly as the last government enforced licence-fee subsidies from the BBC run out with the end of the current Royal Charter.
They will now have to stand entirely on their own two feet on a running basis although there is the continuing benefit of the £25 million infrastructure provided by the BBC. Stations which have started up recently will only get one, rather than three years of BBC subsidy planned, the largest sum of around £100,000.
London is the first place to look because if local TV can’t make it with the entire London market to play with it, it will prove a serious challenge elsewhere.
Several characteristics stand out about London Live, which benefits to the tune of around £3 million from free publicity in the London Evening Standard – according to the initial bid document.
There have been repeated trips by London Live to Ofcom to seek reductions in its local programme obligations – the latest in December – while at the same time issuing statements saying that unlike other television channels in a flat London market, London Live alone is growing.
At Ofcom London Live was successful in having its local news and current affairs obligation reduced from 5.5 hours a day to 3.5 with an hour a day at the weekend, with other cuts in peak and on local repeats.
Ofcom decided that allowing the cuts did not amount to authorising a general service and that there was still enough local content to avoid breaching local television regimes.
This did not amuse City6 – the main rival to Evening Standard TV, which was effectively ruled out for merely offering the reduced levels of local programming that London Live will now be broadcasting.
The best chance now outside London must be further consolidation”
Across the country Ofcom has allowed six local stations to cut back on local programming such as news and local affairs.
Based on official BARB ratings, London Live is able to boast that it has had 22 consecutive months of growth outperforming the London market mainly with the help of films, comedies and factual programmes – programmes such as Footballer’s Wives and Embarrassing Bodies.
In January 2.7 million adults watched London Live across the month, 46,000 viewing for the first time with a total viewing share of 0.46 per cent, up 24 per cent year-on-year.
For 2016 as a whole London Live’s viewing share rose by 37 per cent to 0.47 per cent.
So London Live has managed to push forward from a really small share to a slightly less small share with the help of lots of bought in programmes and regarding films made at Ealing Studios as London interest.
Does that amount to a sustainable business in the long term? Perhaps, but a pretty modest one given the advantages it has enjoyed – not least the prime real estate on the electronic programme guide.
At Mustard TV in Norwich, the station owned by regional newspaper group Archant, revenues are said to be up and costs down though in 2015 the station lost more than £650,000.Viewing figures are believed to be rising but it is not immediately easy to see from the Mustard website what the hard numbers actually are.
What is clear is that it will be very difficult, if possible at all, to make money on such a standalone small scale business which would not be feasible without continuing Archant support.
Outside of London another possible model is emerging – the multi-licence operator as in Made TV, which has clear ambitions to hoover up local TV stations which go into administration.
Liverpool Bay TV went into administration in August with debts of more than £450,000, but within days Made TV took over the station.
The local station for Birmingham and the West Midlands has also been swallowed by the Made Television Network following a chequered financial history that has also included administration. Made also broadcasts to Cardiff, Bristol,Leeds, Middlesbrough, Newcastle and surrounding areas.
Made TV provides some reach figures – 123,269 in Liverpool which it says is 103 more than MTV gets in the same region. MTV is of course a specialist music channel and it is not clear how a direct comparison with the general free-to-air Made In Liverpool actually is.
In Bristol Made says it is “reaching 146,422 viewers” which is of course neither the same as share nor actual numbers watching individual programmes. It then goes on to spoil things a bit by claiming it is reaching more people than Sky Atlantic,TLC, Sky Arts or Discovery.
Comparisons between the Made in Bristol local television channels and international pay TV channels amounts to a very crude measure. So overall what has been achieved so far?
Thirty stations have managed to get on the air with the help of a £40 million subsidy from the BBC and there have been fewer cases of failure and administration than might have been expected so far.
Significant numbers of viewers clearly like such local services but whether those numbers are large enough to attract sufficient advertising to create a sustainable long term business remains very doubtful.
The best chance now outside London must be further consolidation and then Made TV or other emerging candidates will be able to demonstrate whether there are enough economies of scale in chains of local stations to chance the economics. It’s theirs to prove.
The best possible option for local TV would have been a national entertainment channel with local affiliates getting a share of a national TV advertising sale. Even that might not have been enough but it would have been a chance.
That was too top down for Cultural Secretary Hunt so instead we have the bottom up method.
The achievements so far are modest, although not as catastrophic so far as the more extreme pessimists predicted.