Sky News is exploring the possibility of launching a series of regional websites around the UK to complement its national TV news channel.
BSkyB group corporate affairs director Graham McWilliam told parliament this morning that Sky News had looked at regional TV news in the past but that online was likely to be most effective way of delivering local journalism.
He said there was no doubt that there was a high audience demand for regional news, and Sky News would seriously consider whether it could help meet that demand.
"The localities that people want their news in are smaller than the transmission regions," he told the Lords Communications Committee today.
"We just found that very difficult to do on television economically. It seems to me that's much better suited to broadband and internet-delivered services."
McWilliam added: "It's an opportunity we will continue to look at ourselves, but I suspect we won't do it on television, we will look to do it online if we can make a business plan that adds up."
Sky News's interest in entering the local news market comes after ITV announced a major restructuring of its regional news operation last year, with the merger of its 17 TV regions into nine larger areas.
Media regulator Ofcom approved the restructuring last month - ITV has axed about 430 jobs in its regional news division as a result.
In December the BBC Trust ordered the BBC to scrap its proposals for a network of local video news websites based on its local radio station network.