DIGITAL BRITAIN REPORT OUT TODAY.

I think that argument pre-supposes a level playing field between, say, channel 112 on Virgin and channel 103.

But there isn't one. Its going to take a massive culture shift before the public think of the "big 5" (if, indeed, you actually count five) as being the "same" as the plethora of other digital channels.

If ITV were in the EPG next to Diva TV or Discovery Bobbins & Needles, then we really could compare apples with apples - but they're right there at the top. Shrinking market or not, the advertisers primary budgets are spent on those channels at the top of the EPG. They spend more in total, and more per second than anywhere else in the gamut of channels available.

If they were to forego that position, they would see even less money coming in - and consequently wouldn't be able to produce expensive programmes, and would end up like all the rest.

I don't see them volunteering that...



Sorry Mr Q that's a wild guess on your part, and its wrong.

Local news continues to be one of the highest rating slots on ITV, and when asked, its right there at the forefront of viewers expectations.

I think you reckon if there's not a profit to be made then its inherently worthless.

I disagree.

Isn't part of the problem that ITV can now accumulate advert minutes and throw them into primetime? How can ITV local news show a profit when they spend money producing it, but don't gain revenue from selling slots in that hour?

Gavin - I said the audience levels weren't sufficiently high for it to be commercially viable for ITV. The fact that the timeslot rates strongly is actually meaningless - the number of eyeballs doesn't justify the cost.

As far as businesses go - and yes, that's what ITV is - maximising profit is the sole objective. (And rightly so.) If ITV does not believe that regional news is consistent with that goal, then I see no value in mandating they continue to produce it - particularly given that taxpayers are already paying for the BBC to do it.

Of course, I should say that all of the above is predicated on ITV's statements on their regional news output (and its attendant costs) being honest. I think there's an alternative - and fairly plausible - explanation to all of this. It ITV believes it can extract funding from the government to provide a service, then it's in their interests to make the current situation appear as dire as possible - that is, 'if we don't get funding, regional news has to go'. If this is actually the case, then the government appears to have fallen for ITV's lobbying effort. But then I can hardly blame ITV for lobbying for taxpayers dollars - it's only what their publicly-funded competitor has been doing since its inception.

If advertising during primetime delivers higher revenue than during regional news, then I think you've got your answer right there.

I don't imagine the bean-counters at ITV would be looking at regional news and saying "oooh.... we make zero revenue during this timeslot, but incur a hell of a cost". Anything they air in that slot without advertising would generate zero revenue. I suspect the revenue side of things has very little to do with ITV's calculations - it's the cost effectiveness.

I think the problem with this discussion is the implication you can rationalise the thinking of ITV.

Tsk at your use of "dollars".

The difference is that ITV was famously known as a "licence to print money", and as I said, they've enjoyed that position for the vast majority of their existence. Its only in the last decade or so they've really had to tighten their belts.

Hardly the same as the BBC - their profits go back into the BBC, and not into shareholder hands.

ITV may not "believe" that local news and PSB is a profitable aspect of their model - but that's the price to be paid by gaining the prominence of channel 3, along with the "must be carried on all platforms as a priority" status.

The ratings in the news hour are, by the way, not just good in terms of share, they're also very large in eyeball count.

Of course there's more profit in a London based gameshow hour than producing local news for 15 regions.

But that's what they signed up for, isn't it?

Oops. Sometimes I forget the audience...


That's right - the media landscape has changed. And yet the regulatory environment has failed to keep pace.

Regional news is not exclusive to television - there's print media, radio and of course the internet. And the relative strength of each is changing, because competition is not a static process either. Yes, television has been a dominant medium for some time. For now, it arguably still is - but it's slipping relative to new media forms. Certainly, I think it's safe to say that being a terrestrial broadcaster isn't as big a deal as it once was. I don't agree with imposing PSB conditions on commercial networks in the first place - but expecting those conditions to be maintained today just as they were a decade or more ago is foolish. Not only does it impose a tremendous burden on ITV, it is also likely to stunt innovation in the media sector, because regulation is directing resources into areas that perhaps aren't as significant as they once were.


Well, I think the conditions under which a 'channel 3' emerged are fairly different to what exists today. It might have been what ITV signed up for - but I don't think anyone would expect such conditions to remain the same in perpetuity. But governments and regulators always struggle to keep pace with changing environments.

The landscape is changing, for sure.

The question is - how much benefit is still there for ITV in 2009 being placed where they are in the EPG. How much less of a benefit is that from where they were, say, 15 years ago.

I understand your view that you don't think any commercial broadcaster should be encumbered with PSB commitments; so what would the alternative be?

The BBC gets all the PSB burden to carry and are the only ones on the "must be carried" channels.

Then Sky 1 or Virgin can slug it out with ITV for the remaining top slots, and can all bid for a PSB-free channel 3 slot.

ITV wouldn't like that one bit. Bad medicine.

So we come back to ITV wanting the benefits and not wanting to pay the price.

Hmmm.

I'm not sure that's the case at all. What are the figures currently for the 6pm shows?

Even at around the 3m mark, it's not too far off the 5m or so most programmes aim for in prime-time now, and although obviously more costly due to the dozen or so programmes made, I'd hazard a guess (and I am guessing here) the combined audience outrates News at Ten now, and we all know the fuss there's been over the scheduling of that.

Also it's not the viewers fault ITV aren't putting ads around the regional news, a time at which taking advantage of advertisers at a local level could surely be beneficial to ITV.

I don't know how far it would go to covering the costs, but I suspect most viewers would rather ITV be allowed to have a few minutes extra of ads, in the regional news itself, helping to pay for it and the licence fee surplus knocked off the cost rather than having to pay twice for the regional news.

(Actually I'm in full agreement with Gavin Scott on this one - he sums it up perfectly!)

Yep, I'd be happy with a couple of breaks in the STV news (along with the weather sponsorship) if they would earmark the monies for the news service. The figures are good - but if ITVplc choose not to capitalise on it then that's their problem.

Blimey, Brekkie, we're in danger of agreeing completely here.

Interesting debate on Newsnight Scotland (check the iPlayer) last night, regarding the memorandum between BBC Scotland and STV with a view to sharing more resources, training and pool material. Gordon Brewer interviewed Ken MacQuarrie regarding this, and the wider issue of top-slicing the licence fee.

Ken's comments about STV having "no intention" of dropping their local news commitments was very reassuring (and no great surprise).

Odd to hear the BBC chief say it though!

The BBC provides a public service so I think it's fine that the licence payer funds regional news. ITV however is a commercial broadcaster. Now I don't care at all if they're throwing millions of pounds down the drain on regional news, because it's not something I've paid for. However, spending £100million of licence payers money on unprofitable, commercially unsuccessful regional news, when we already pay for some through the licence fee, is pointless and unacceptable.

Besides, any news programme produced by a brand new company with no newsgathering experience on a very tight budget is not going to be great. If ITV can't afford to make news themselves, I doubt dishing out £100million to fledgling companies to piss up the wall will help improve the quality of British television.

What kind of company would enter into an unprofitable market? There may be a handout of a few million, but that will be spent on producing the news! There'd be little in the way of profit thereafter. Who knows, maybe the regional news will be a HBOS/Woolworths co-production.

McMillan Media (I think) provide the Scotland opts for GMTV, so the idea of an indie providing news isn't that ludicrous a suggestion. Presumably they can turn a profit on it too (which would be easy enough to find out from Companies House).

But when ITV have (whats left of) a news infrastructure and experienced journos across the UK, it would be foolish to scrap it so a new company can start from scratch.

With the viewing figures as they currently are, I would contest the notion that its an "unprofitable" venture for ITV.

If Ofcom were to allow for more advertising minutes in that hour (additional to those lumped into primetime) then ITV news could sustain itself.

The American local TV model is awash with advertising spots. "How can you avoid skin cancer... find out after these messages...". That's how they pay for it, and clearly its a money-maker there.

Perhaps there's a happy medium to be struck - 2 commercial spots instead of 4 (or even 6!).

Mr Q made a good point earlier that ITV are probably making the situation out to be far worse than it is (in terms of potential for profit), as they want to dump the PSB service completely.

To my mind they should be looking at the other possibilities in order to save the service first.

And, quite frankly, if they're not prepared to do that then I would like to hear what the other big commercial players would do were they to gain the channel 3 slot.

I certainly don't see why ITV should be allowed their placement in the EPG if they have no intention of fulfilling their remit.

We can get a rough idea of the potential revenue for the slot using the example spot costs from ITV Media.

http://www.itvmedia.co.uk/documents/pdfs/media_toolbox/sample_spot_costs_2008.pdf

I believe STV news budget is in excess of £7m per annum.

The spot cost is approx £1,784 for 30", say the maximum ad minutage was used in the half hour of 210" that could potentially generate £12,488 per day, £62,440 per week or £3,246,880 - thats still some way off the cost of provision.

Similarly on a network level that could potentially generate £47,796,840, again some way off the actual cost of provision.

You could argue that the difference would be the price the channel 3 licence holders have to pay for the privellage of the slot + gifted capacity but it definitely couldn't be self funding, unless there were even more cutbacks. Even those potential revenue figures would be at the upper maximum.