Why London can’t afford low-budget TV if it’s a world city

London gets its own local TV channel by the end of next year, with potential operators now formally being invited to bid for the franchise to run the new service.

Its aim is to reflect London life—but could also promote the capital as a true world city.

London is among the first 21 areas across the UK being offered franchises next year, under Government plans for a new network of city-based channels.

Ofcom, the broadcast industry’s independent regulator, opened the bidding on May 10 following an announcement from Culture Secretary Jeremy Hunt.

Potential operators have until August 13 to apply for a licence, which would be awarded on criteria including local news and current affairs, programmes, proposed date for going on air and viability of their business plan.

It is attracting some of the TV industry’s big players. But Ofcom is also seeking applicants for ‘multiplex’ licences to run not-for-profit services in the 21 franchises being set up around Britain.

An Ofcom spokesman explained: “The holder of the multiplex franchise has to promote local TV and offer good quality coverage and transmission. But it cannot recover costs greater than costs of transmission of each local TV service.”

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Some industry figures believe this low-cost approach won’t work in the capital.

It might encourage low-budget operators which would lose London the chance to use the new channel as a high-quality world stage.

One potential bidder is TV entrepreneur Richard Horwood, who heads the Channel 6 Group.

“Local TV will work in London as long as we get wide audience reach,” he said. “But it has to be high-quality or it won’t get the viewers and won’t get the advertising to afford to exist.

“That doesn’t mean it can’t include community programming—you just have to produce it in a professional way.

“Doing it ‘on the cheap’ will look amateur. London deserves better.”

The London franchise is the flagship of the first 21 areas earmarked for local TV. Others in the south are Norwich, Brighton, Southampton, Bristol, Oxford and Plymouth.

Those in the rest of the UK are Edinburgh, Glasgow, Belfast, Cardiff, Swansea, Birmingham, Grimsby, Leeds, Liverpool, Manchester, Newcastle, Nottingham, Preston and Sheffield.

But using the London franchise to promote its ‘world city’ image comes with ‘special needs’. It must get prominent listing along with the other ‘public service’ broadcasters such as BBC 1 and 2, ITV1, C4 and C5, say its advocates.

This means front-page billing on the satellite menu to make it commercially viable, for example, an argument put by the appropriately-named Channel 6 Group based at Canary Wharf which is bidding for the franchise.

Ofcom has already approached TV carriers such as satellite to see what listing they are prepared to offer the new station. Sky is thought to be offering the 117 listing (slot 17).

Sky’s offer is “a step in the right direction—but not the right answer,” according to Richard Horwood.

“Ofcom has the powers to move channels and mustn’t duck its legal responsibility,” he urges.

“We have no bargaining power as a franchise bidder. But Ofcom has that power to do the bargaining on our behalf.”

He would go for the TV satellite’s 106 slot immediately after Channel 5, currently held by Sky1, and Slot 6 on Freeview now occupied by ITV2. Neither are ‘public service’ channels, unlike the new service which has been given that status by the government and legally carries listing priority.

But the TV regulator is taking a ‘softly softly’ approach to see how the carriers respond to the idea of moving channels. It may have to use its statutory powers later if necessary, before the London franchise is awarded, likely to be in September.

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