Comux announces the launch of ‘local TV’ in UK

Somewhat late in the day the UK has embarked on the roll out of local TV. 2013 will see the first of 19 stations take to the airwaves, with the full complement complete by the end of 2014. Over the years there have been dalliances with community channels, first on cable and later via web streaming, but the format has never really gained traction. Responding to public interest in local programming, Ofcom, has allocated spectrum for local broadcasting, as well as an EPG slot. In England and N Ireland this will be the low number channel eight, on the Freeview DTT platform (which carries EPG data across all DVB-T multiplex operators), making it very easy for viewers to chance on the channel. Scotland and Wales will use channel 34.

Much has changed in the business landscape since setting up local TV involved a acquiring a tower and transmitter as well as a sales operation. Broadcasters can now outsource playout and delivery to service providers, and this changes the economics.

The stations have been encouraged by the regulator in operate in a co-operative environment, sharing facilities where it makes sense, but with programming sourced from the local area. At the recent Edinburgh International Television Festival, Ed Vaizey, UK Minister for Culture, Communications and Creative Industries said: “This agreement marks a key stage in the development of local TV and we will soon see the first station begin broadcasting. The first station to hit the airwaves will launch an entirely new media industry in the UK. These stations are creating new jobs in our communications and creative industries, and providing people with a fresh way to be informed about their local communities.”

A company has been set up to centrally managing the multiplexing of channels and to insert the EPG data. This company, Comux UK, is a charitable trust, and will offer playout, ad insertion and audience measurement services to the local licensees from a network operations center in Birmingham. Comux will use transmission service providers like Arqiva to deliver to the local areas.

Local TV network

The process for selling advertising in not fully formed, with each licensee free to make their own arrangements. It is expected that the trade body for the licensees, Local TV Network (LTVN), will contract a single sales house that stations can use should they wish to centralize buying. This will provide a single point for advertisers wanting to run campaigns in local markets. LTVN will also hold monthly meetings to discuss local TV issues and policies; liaise with national media and government organizations; negotiate access and other agreements for news; and generally promote local TV.

Nigel Dacre, Chair of the LTVN said: “This could be a classic disruptive innovation. New ways of working, new approach to programming, new funding model. This will make a difference to the way the media operates in the UK.”

“This is an exciting new development in the UK media, we have had strong national TV, and strong regional TV, we have never had local TV and this is the opportunity.”

BBC contribution
As a public service broadcaster funded by a receiver tax the BBC may have seemed the obvious provider for local services, but over the years they have never embarked on such a project, and seem reluctant to do so now. They air regional news programs, but the regions are too large for the programming to be classed as local news. As part of the BBC’s license fee (receiver tax) settlement agreed in 2011 the corporation agreed to help with the Government's aim of setting up the local service by making up to £25 million of license fee money available to the holder of the Local TV multiplex license to build the local TV multiplex and infrastructure In addition there is £15 million funding for three years in exchange for the provision of local news stories to the BBC.

Local TV framework

Ofcom set up a framework for local digital television program services (L-DTPS) that would use the local DVB-T multiplex to carry the additional program stream. Announcing the framework in 2011 the Culture Secretary at the time. Jeremy Hunt, hailed local media as “a vital part of local democracy,” Hunt said that providing new TV services offered “great scope to contribute to growth in our creative industries, develop local journalism and help bring communities together around a shared voice.”

The government passed orders to reserve spectrum and establish the status on the EPG operated by Freeview. Regulations also cover access services (captioning, etc, should the size of audience warrant it) and code of practice for programs, (decency, etc.). The regulations also define the obligations to the local community that go along with the license to operate. Licenses were awarded for a period of twelve years. Because of their mutual interdependence they are coterminous with the local multiplex licenses.

Ofcom stipulated that local multiplexes must reserve capacity for the local services at each site. The MUXs use a robust DVB-T transmission mode to maximize coverage, and use unused, geographic interleaved spectrum within the national spectrum allocation.

There is additional capacity in the local MUX to carry two other SD video streams, and this is for the multiplex operator to use as they wish for licensed services, which provides an opportunity for additional revenue. These additional MUXs could be “quasi-national” services.

The first phase of licensing awarded 19 MUXs to be rolled out over 2014. 30 more licenses will follow in a second phase. Licensees include an eclectic mix of operators including a local newspaper publisher (London), media group operators (Made Television with four stations and That’s Media with two), a regional television company (STV for Glasgow and Edinburgh), and Estuary TV, a subsidiary of local educational institutes.

Funding the stations

Funding can be though advertising, sponsorship, advertising-funded programming, and product placement as well as from local sources of revenue. It is envisage that the existing rules (COSTA) on advertising minutes and breaks for national TV networks will be relaxed for he local stations and will allow clearly delineated long-form advertising, one example would be classified advertising for local real estate agents.

Will the advertising cannibalize existing media companies, like local newspapers and regional TV? Nigel Dacre, LTVN, sees local TV as a new opportunity for local business, theaters and restaurants to advertise to a local audience, some thing that was too expensive and insufficiently targeted with the existing regional advertising. Ed Hall of Comux sees the likely level of local advertising to be small when compared to national TV advertising. In comparison with the impact Google has had on advertising spending, it would seem that incumbents have little to fear from this new player.