Local Digital Television Programme Services Order 2012

Lord Clement-Jones Excerpts

Monday 6th February 2012 Grand Committee

[Baroness Bonham-Carter of Yarnbury]

My Lords, I, too, thank my noble friend for her presentation. The provision of local news is very important, and we support steps being taken to promote the local democratic process through greater access to information, but there are a few areas of concern which it would be helpful if my noble friend could clarify.

It is clear that local television stations, as commercial enterprises completely unsubsidised by government, will be very much dependent on advertising revenue. Can my noble friend tell us what is being done to promote local television to advertisers? It is also clear that the key motivation for advertisers will be the audience viewing figures, but, at present, there is no trusted audience measurement system proposed, as I understand it. It would be helpful to know whether there are any plans for the creation of a local audience measurement system.

As the noble Baroness, Lady Jones, mentioned, many are concerned that any local television advertising revenues which are realised will come from cannibalising existing local providers operating in radio and print. Although we recognise the importance and potential benefits of local TV services, they must not come at the cost of other forms of local media.

Finally, the department has said that £25 million of local TV infrastructure costs will be met from the BBC licence fee, with a further £5 million of licence-fee money to be spent annually for three years on local content. Can the Minister offer any insights as to what will happen after those three years? How can the Government ensure that taxpayers will not continue to fund these stations if they are unable to earn sufficient advertising revenue? Does the noble Baroness agree that BBC local radio must also be protected, and does she support the chairman of the BBC Trust’s recent direction to the executive that cuts to BBC local services should be reassessed? Have any discussions taken place with the BBC to encourage it to share its skills and knowledge with local television services as they are set up? Given that the BBC as an organisation holds a wealth of creative and technical talent that uniquely is spread across the country, it would seem sensible for such a resource to be shared, where possible.

[Lord Clement-Jones]

My Lords, I entirely agree with everything that my noble friend Lady Bonham-Carter has said, and perhaps I may ask the Minister a quick question about detail. Will local television be entitled to an average of nine or seven minutes’ advertising an hour?

[Baroness Rawlings]

My Lords, I thank all noble Lords who have contributed to this short debate with many very valid points and interesting questions. I will try to respond to as many as possible.

The noble Baroness, Lady Jones, asked about the declining pool of advertising revenue. Local television is expected to take less than 3 per cent. We are creating new opportunities for existing local media to diversify their business through television. Local television has the potential even to grow in the television advertising market.

Why do we include London, which has a large population compared to many other places? London’s local licence is separate from the BBC and ITV regional offer. London TV will be required through licence obligations to meet the needs of local London viewers. Like all such programmes, they will be tailored to local needs and requirement.

Regarding ownership of local television services, the Ofcom beauty contest, which will be starting quite soon, means that the bidders offering content that is most relevant to local viewers will be more likely to win a local licence. Licence conditions will include localism criteria, so that licensees will need to provide content of interest to local audiences that will support local democracy. Any local cross-media mergers will be subject to competition law and to the media public interest test.

The noble Baroness asked several questions about regulating the content of local TV. The broadcasting code will apply to local TV services, which will therefore have to make certain that any news programmes are impartial and accurate—the same as applies to other television news programming. These new services will be a way to increase the provision of quality local content supported by licence conditions imposed by Ofcom.

Regarding the impact on the wider local media, we do not expect local television to take away large amounts of local newspaper advertising revenues. Research by Enders Analysis, which the noble Baroness might have seen, suggested that local TV could take approximately 3 per cent of the existing local advertising market. We also expect that local newspapers may well be interested in bidding to run local television services as a way of diversifying their portfolios.

The noble Baroness asked about quality and impartiality. Ofcom’s scrutiny process will produce incentives to competition and to bidding for local television licences, thereby driving up quality. All news shown by local television will have to be impartial and comply with the broadcasting code, which is very important.

The noble Baroness asked whether there was demand and why previous attempts failed. Ofcom research clearly shows high demand for local content. As she mentioned, Nicholas Shott looked very carefully at commercial validity. Previous local television providers were available but low on the EPG list, and on analogue. Our proposals secure high EPG listing and create incentives through the spectrum and licensing. This is a new framework, which was not previously available.

What happens when the BBC funding runs out? We have worked hard to understand the issues around commercial viability for local television. The framework that we are putting in place offers the best chance for viability, with assistance from the BBC, EPG prominence, an appropriate licensing framework and the reservation of spectrum. With all these factors in place, and an enthusiastic local market, we expect local television to be viable.

My noble friend Lady Bonham-Carter asked about audience measurement. Through the licensing regime, we are enabling the creation of and participation in a local TV body. This body will be able to invest in audience research, such as BARB. My noble friend also asked what will happen after three years. Local television will be in a commercial position and the advertising offer should be in place after three years to make long-term sustainability certain.

My noble friend Lord Clement-Jones asked about timing. No decision has yet been made. Whether local television will be entitled to seven or nine minutes of advertising an hour is a matter for Ofcom. It will rule on that, along with all the other areas on which it will be rule.

Finally, I reiterate that this legislation creates new opportunities for businesses and audiences. The strategic framework being put in place means support from the BBC, prominence on electronic programme guides, allocated spectrum and a new fit-for-purpose Ofcom licensing regime. This will help local television to become a fundamental part of the broadcasting landscape in the UK, which will in turn support local democracy, increase local public service content and act as a driver for growth in the local media market. I am most grateful for all the clarifying questions that the noble Baroness asked.