As another local TV channel closes this week, questions are being asked on whether the money spent on building a network of local TV channels was well spent.

Time to have a look at how local TV channel operators benefited from a £300,000 deal and what the future holds…


As part of the package of support offered to new local TV broadcasters, a decision was made to top-slice the TV licence fee.


Each local TV channel could claim up to £300,000 over three years for news content it made. As part of the settlement, the BBC would purchase news content from the channels that it could use across its own outlets.

In recent weeks, some news outlets have splashed ‘exclusives’ surrounding this scheme, despite the original announcement of the terms in May 2012. But it’s the recent closure and consolidation of channels that has focused attention on what the money has been used for, and whether or not is being used to prop up unviable and understaffed services.

The scheme opened in November 2013 with the launch of the first local TV channel – Estuary TV – serving North Lincolnshire and East Yorkshire. Having used up the money, and not able to secure a long-term future as an independent channel, Estuary, which has origins as as a cable TV service in North Lincolnshire, will close at the end of August, with the channel’s assets sold to That’s TV, which takes over running local TV in the region on the 1st September.

In each participating local channel’s first year of operation, the local station was instructed to provide the BBC with 85 “diary-based” stories per month, in return for a fee of £150,000 per annum. This amount decreased to £110,000 in year 2 of operation (with a demand for just 62 stories per month), and £40,000 in year 3 (with only 23 stories per month required by the BBC).

The stipulation that the content to be purchased was to be for “diary-based stories”, meant that the content purchased covered news events that were known in advance, such as a local town festival or a charity event.  Content purchased could take many forms: for example, a compilation of rushes to make a package, some shots and an interview suitable for a brief news item, a local news vox pop, or even a studio interview, according to the BBC.

In addition, participants in the scheme also committed to granting the BBC ‘first refusal’ rights to acquire off-diary news content that the licensee wishes to sell, including breaking news, investigations and other items that lie outside the monthly quota of diary items. STV, which operated five local TV licences north of the border, wasn’t going to allow its rival to acquire its news footage and said it would not partake in the scheme. All other channels took part from the outset.

At the beginning of 2017, the associated licence fee agreement expired. But to ensure that local TV channels that had yet to launch could participate in the scheme, the BBC announced in January 2017 that it would allow any qualifying local TV channel that had launched by the 31st July 2017 to join the scheme.

And that triggered a mad rush to get the last local channels on air. That’s TV, the holder of most of the UK’s local TV licences was behind most of the last cluster of channels to go live, including services for Guildford, York and Scarborough. The Scarborough service – That’s TV North Yorkshire – went on-air within hours of the the deadline on the 31st July 2017.

Since then, That’s TV has been accused of exploiting the scheme in a recent Buzzfeed investigation. Those who were previously involved in That’s TV say off the record that most of the news content produced under the terms of the scheme wasn’t good enough to be reused by the BBC.

In the end, the BBC managed to showcase some of the content generated by local TV in a weekly iPlayer show called Digital Nation, with 80 episodes added to the service up to the end of March 2017. Even STV content ended up being showcased on the BBC iPlayer, despite STV’s initial reluctance to receive any support from the BBC.

Of the last local TV channels to launch in 2017, they will continue to benefit from licence fee money for up to three years, with the last items of news content to be purchased under the scheme to be generated in July 2020.

By then, a maximum of £15 million will have been spent operating the scheme – with some of the money covering BBC admin and compliance costs.

And of the rest of the channels? Without licence fee funding, the channels will now have to stand on their own. Already, some channel operators have sold up – Norwich and Swansea’s local channels have become part of That’s TV as a result. And STV threw in the towel in June 2018. Other operators have consolidated their operations, and many channels now screen the absolute minimum of local content as required by Ofcom – with news programmes produced once a day and repeated on a loop – a far cry from the originally promised quantities of content pledged by the then applicants for the local TV licences.

A second amount of licence fee money was also set aside for setting up the infrastructure that supports local TV transmission on Freeview. Comux, operator of the local TV multiplex, is responsible for getting the signals to viewer’s homes. Up to £25 million was made available to support the construction of the infrastructure.

Life after licence fee funding ends…

A small number of channels continue independently beyond the end of licence fee funding; often those channels with strong community links. NVTV from Belfast already existed as a community station for Belfast until its analogue signal was taken off air in October 2012 as part of the national digital switchover scheme. It was successful in its bid for a new local TV licence, which has enabled the channel to resume broadcasting in a digital environment – with the added benefit of the licence fee funding agreement to support its return to the airwaves. Sheffield Live, which already operated a community radio service continues to operate an independent television service for Sheffield and Latest TV in Brighton maintains a service, although much reduced in scope from its early days. Notts TV meanwhile is asking for viewers to donate to help secure the future of the Nottingham-based channel.

London Live meanwhile has been relying on the deep pockets of owner Evgeny Lebedev amidst reports that the flagship local channel for London might be sold off in the future.

Ofcom, meanwhile has abandoned plans to licence any more local TV channels – had they gone ahead, they would have been too late to benefit from licence fee funding and there would have been no more money to build the additional infrastructure.

It increasingly looks likely that local TV will one day return to its status in the analogue TV days – a handful of small-scale channels scattered across the UK, little known about outside of their community, but survivors of what seems to be turning into an expensive experiment. Other channels will either close or morph into a national network – the beginnings of which are already apparent on some channels.

Written by: Mike Manning

Taken from: https://www.a516digital.com/2018/08/local-tv-where-did-money-go.html?m=1