Local TV panel reports back to Hunt

Only around a dozen local TV services would be viable in the short-term, but the launch of YouView will boost the sector, an advisory panel has told culture secretary Jeremy Hunt.

Today, a panel led by Lazard investment banker Nicholas Shott submitted a report to Hunt claiming that 10 to 12 local TV services could operate in major UK conurbations, broadcasting around two hours of "reasonably low cost but high quality content" every day.

Hunt wants to create a network of as many as 80 local TV stations in the UK. The first stations are due to win licences next summer, with 10 or 20 services ideally in operation by 2015.

The panel said that there is a "coherent argument" that local TV would initially be developed for digital terrestrial television (DTT), where it could "build a brand identity [and] develop a sustainable model".

However, the long-term aim would be for DTT transmission to "pave the way" for the transition to IPTV, particularly the forthcoming BBC-led joint venture YouView.

"In the long-term, local TV looks set to be delivered through IPTV technology; therefore, any steps the government takes through new regulatory interventions to facilitate local TV should have regard for this," said the report.

Shott noted that there are various options for carriage on DTT, but all have different drawbacks, particularly in the nuances of broadcasting over national or local transmitter networks. He therefore advised Hunt to discuss technical options with Ofcom to create a solution that takes into account "the cost, ability to localise and total population coverage achieved".

As bearing the cost of acquiring content would most likely be "out of reach" for standalone TV stations, Shott said that a "shared national backbone" should be created to help fill their schedules, most probably managed by the BBC. He also indicated that cross promotions on other channels and higher prominence on electronic programming guides (EPGs) would both be highly beneficial to the local TV sector.

The report estimated that a network of 10 local TV services would have a combined cost base of around £25m. As just £5m is forecast to come from local advertising, the services would need to earn a further £15m from national advertising revenues and the BBC would have to provide around £5m of locally-produced content.

In a statement, Hunt said: "I am incredibly grateful for the energy and rigour that Nicholas Shott and his steering group have put into the local TV review.

"I am considering his report carefully, which gives us a solid foundation to take forward the necessary steps to bring about local TV in the UK. I will publish a plan early in the New Year setting out those steps."

In September, Shott's interim report advised Hunt to explore options for collective sponsorship of local TV services as a way to create a financially sustainable sector.