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Local TV Channels Won’t Work, But IPTV Partnerships Hold Promise

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We said this back in July, and now the Lazard banker Jeremy Hunt commissioned to explore his local TV idea has now reported the same interim conclusion to the minister – it won’t work as Hunt might have conceived, as conventional linear channels.

Here’s media banker Nicholas Shott’s letter to the culture secretary – in summary…

— “Local television in sparsely populated areas is unlikely to be commercially viable on DTTEven in densely populated urban areas … the economics of a TV business funded mainly by advertising will still be challenging.”

— “Locally generated news content being sold to other broadcasters should be closely examined … there may be scope for the local TV sector collectively to be sponsored by a large corporate entity.”

— “Local TV businesses should work together … having a channel number for local TV … in a prominent position on the EPG is highly desirable.”

— But Shott’s advocating using an PSB channel as a “host” channel for local programming, accessed either at scheduled times or via interactive red button.

— “It is highly likely that, in due course, IPTV will be the best delivery means for local TV, but it should also present an opportunity, for example, to newspaper publishers at least to maintain, if not to recover, advertising revenues through the facility of IPTV to combine video, text and web links.”

Shott’s exploration panel is due to report fully to Hunt in November or December.

Hunt is already modifying his thinking to accommodate a more online-centric, piecemeal approach. Here’s what he’s saying in a Royal Television Society speech today (full transcript here)…

“Nowhere in the US, Canada, or anywhere else have I been able to find a broadcaster able to make 24-hour local content commercially viable