Summary:

The Conservative Party is proposing the creation of 80 independent cross-platform, ad-funded news companies staffed by professional journali…

The Conservative Party is proposing the creation of 80 independent cross-platform, ad-funded news companies staffed by professional journalists and community volunteers to fill in the gaps left by the shrinkage of local newspapers and the switch-off of ITV’s local news in 2012. The idea, set out in a consultation document, is really an extension of Digital Britain‘s proposed “independently financed news consortia” — but instead of bidding for public money as Lord Carter suggested, under the Tories’ plan no public subsidy would fund local news. Full consultation document (pdf).

The report, written by former Johnston Press chairman Roger Parry, suggests that about 80 companies would provide free-to-air news via digital terrestrial TV, cable and online video — as Guardian Media Group-owned Channel M does — as well as online text and video. It mentions companies could print their own weekly newspapers and bundle in subscription charges with premium online content — “a local version of what is being done with the FT”. All this would be commercially funded through a mixture of: “Display and (a reduced volume of) classified advertising, sponsorship, product placement, retailing, copy sales, by selling news services to regional and national providers and by providing local media services.”

The report proposes that Ofcom sells the 80 licences as a single bundle to a “band manager” — ITV (LSE: ITV) or BSkyB (NYSE: BSY) would fit this bill — which would distribute them to existing publishers or new entrants to the market. The likes of the Press Association and Ten Alps have already expressed keen interest in winning such contracts.

How is this going to happen?: The report makes clear this is a “blueprint”, not a roadmap for action; it calls on DCMS to start a consultation on the idea and for Ofcom to judge its feasibilty. But those two bodies are of course currently consulting on Digital Britain’s news consortia recommendations and a Labour government isn’t going to rush to reject its own plans in favour of Tory ones.

Our take: A former chairman of Johnston Press should know that there is hardly enough advertising money in the UK economy to sustain news media: it is a big question mark whether the market can sustain local news in any format without at least some public subsidy. While the Tories’ proposed companies will have lower overheads thanks to community volunteers — as any volunteer programme worker will tell you, it’s a mistake to think you get that work for free: to train and manage community journalists takes time and money. It’s flawed, it’s less sustainable — but the report should be viewed as a window on how the Conservatives might tackle the local news question if and when it wins the next election.

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