John Fry on local TV: I don't really like public subsidies

Johnston Press chief executive John Fry said today he was ‘uncomfortable’with the idea of accepting public subsidy as a long-term solution for running proposed new local television services.

Fry said he was against subsidies as they were ‘out of tune with the music of the times’and drove out innovation from local media industries.

Despite being ‘extremely impressed’by proposals to create a network of local TV stations, Fry raised fears that local partners in a new national channel could be ‘traded off’against each other by a dominant network partner organisation.

Investment banker Nicholas Shott led a steering group which recommended to the Government last year the creation of a new system of ten to 12 local TV stations linked by a national channel broadcast on digital terrestrial television (DTT).

Funding for such a venture, Shott suggested, would come from £25m start-up costs provided by the BBC, plus £5m a year there after for content, with the Government underwriting a contract with an existing national broadcaster to sell £15m a year of national advertising in to the service.

Culture Secretary Jeremy Hunt said earlier this month licences for local television services will be handed out before the end of 2012.

‘I don’t really like public subsidies. The newspaper business has always been fiercely independent and hates being beholden to anybody,’Fry said in an address to the Westminster Media Forum this morning.

‘This has enabled us to maintain our impartiality and prevent bias. The TV business, while obliged by regulations to be impartial, always appears to have an eye on the regulator and Government…

‘Subsidies might facilitate one project but they can squeeze out others, they are reducing rather than increasing innovation.”

Plans to develop local TV services across the UK have previously come in for intense criticism from figures in the regional press. Trinity Mirror chief executive Sly Bailey said last year she did not see the proposal for a series of city-based TV services as a viable proposition.

Despite this, Fry said the motivation for his interest was the prospect of expanding Johnston Press’s multimedia offering, the development of new skills within the business and the prospect of opening up a new revenue stream.

Fry said he recognised that subsidy might be needed to get the project off the ground, but said clarity should be given on when that would be withdrawn.

DTT would be the preferred delivery platform in the short-term, he added, although IPTV would provide a better long-term solution

However, any new channel would also need to have a high listing in DTT’s electronic programme guide (EPG) to attract a sufficiently large audience to make the channel viable, Fry said.

‘There is no point being beyond the pornography, no-one gets that far,’he said.

A network channel linking the proposed new local services could end up providing 80 to 90 per cent of the service, Fry said, in addition to providing the bulk of the revenue and the technology necessary to power the new channel.

Partner organisations would then be expected to provide local news, around ten to 20 per cent of air time, and around £5m of local advertising each year, Fry said.

‘Our primary interest, as a local media company, is to participate as local partners rather than to run a national TV channel,’he added.

‘But it’s yet to be defined how the affiliates might work in the network channel.

‘There appears to be a danger that the network channel might become the more powerful partner, provide most of the revenue, schedule and technology being able to trade off local partners.

‘If that is the case participating becomes less interesting for those local partners.”

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