Tag Archives: jntm

More from #JNTM: Flawed thinking behind government local TV plans

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Following on from the previous post, another government policy up for criticism at this week’s Journalism’s Next Top Model conference was the much-mooted local TV plans.

This was a recurring theme of Culture Secretary Jeremy Hunt‘s speeches while in opposition, and this week he announced that Nicholas Shott, Head of UK Investment Banking at Lazard, will “look at the potential for commercially viable local television stations within the local media landscape right across the nations and regions of the UK.”

Roger Parry – credited with much of the thinking behind Hunt’s proposals – backed the plan, seeing it as being more about local multimedia than local TV. He expected around 80 local TV stations to be made available on Freeview with a consumer-focused mix of programming (gardening, DIY, etc.) and sponsorship rather than spot advertising.

But Clare Enders (Enders Analysis) and Will Perrin (Talk About Local) were hugely sceptical of the commercial basis for a local TV market in the UK.

Enders pointed out that while local newspaper advertising was worth £2.6bn this year, £1bn of that came from classifieds – a form that doesn’t translate to TV (ITV’s previous experiments with ‘video classifieds’ was, she said, a “disaster”).

She also highlighted the vast differences between the US local TV market – where national networks support state affiliates and states have their own “separateness” – and that in the UK where, she predicted, impending budget cuts “will kill some local economies – not inspire ad growth. It will get worse.”

“[Local TV] hasn’t panned out and my goodness has it been looked at in the past couple of decades.”

Government 'doesn't understand economics' over relaxing ownership rules – media economist

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On Wednesday I spoke at the thoroughly enjoyable Journalism’s Next Top Model conference at Westminster University. Highlight of the day was keynote speaker Robert Picard, a media economist able to separate publishers’ sense of entitlement from the hard realities of economics and business (mis)management.

Journalism will survive, he said, because there will always be a demand for it. But most print publishers will die because over the past few decades they quite simply haven’t managed their accounts responsibly. While a typical business should have a debt-to-equity ratio of around 1:1, some publishers have racked up ratios ranging from 6:1 to 66:1.

“If you haven’t managed your balance sheet you get in trouble in a recession. Do I feel bad for them? No. They made stupid mistakes.”

One particular mistake highlighted by Picard was the switch in the 1990s from making acquisitions with stock to making acquisitions with debt.

“All the newspapers were making profits when they went bankrupt,” he pointed out. It was their handling of debt that killed them.

I asked Robert about the government’s plans to relax (and consider removing) local media ownership rules – and whether that would indeed create the environment for entrepreneurialism they want to encourage. His response was simple: “You don’t encourage competition by relaxing ownership rules.

“They don’t understand economics,” if they thought that would happen, he continued. “We need people to start more media organisations, not merge into fewer organisations.”

Picard seemed to feel that the Dutch government’s moves to provide funds to help news organisations restructure, or to re-skill journalists, were more intelligent responses.