Conservatives expose themselves on local TV

"Over time", Mr. Hunt claims, local television would build up strong local advertising bases. But the Culture Secretary is far less well placed to judge this market than media companies, which are themselves fallible. And television advertising revenues have proven fickle in recent years. Of course, there might be a market for local advertising that has not yet been tapped, but the demise of Cinema adverts for curry houses does make one wonder!

Certainly, the entrepreneurs are not hopeful. Tim Brooks, managing director of Guardian News & Media, has described the idea that the network could be commercially viable as "sheer fantasy.” As he went on to point out, “The largest television company in Europe couldn't make enough money out of Channel Five, [and this was] the third network to [try to] make a go of it... [T]hat's why you won't see Jeremy Hunt bowled over in the rush of people with money wanting to get involved in his project." Sly Bailey, chief executive of Trinity Mirror, agreed, adding that getting involved “in a 10-way joint venture that doesn't make any money is not the most exciting prospect."

Paddy Barwise, Emeritus Professor of Management and Marketing at the London Business School, also questioned whether there was any public good to be served : "I'm pretty sceptical about the... public benefit … I would expect it to generate a low level of viewing.... [T]he channel would need a programme budget equal to or greater than Channel 5's in order to get enough national advertising to create a big enough subsidy to make the local opt-outs viable and that would, if it happened, make a significant impact on the existing broadcasters".

Clearly Mr Hunt genuinely believes that local television would be a good thing. But that is precisely the problem. The curse of the 20th century was government ministers who meant well, splurging vast sums of taxpayer money subsidising things that seemed like a good idea at the time. Even Jeremy Hunt’s Shadow describes the plans as “a politician’s vanity project”, and as a former Labour minister he should know.

The truth is that if people really wanted local TV then commercial media would have provided it. Note that I say ‘really’ wanted. Of course if you ask people if they want it, most will say they do. But if you ask people if they want a Mercedes most will say they do. Whether they really want local TV is determined by whether they would pay for local TV. If they would, you may be sure that entrepreneurs in ITV, Sky, Virgin and elsewhere would have identified an opportunity and jumped upon it. The fact that all previous attempts have failed, and that (as Marx would no doubt have been pleased to note) ITV’s many regions eventually collapsed into near monopoly, suggests that local TV is little more than ministerial fantasy.

If Mr. Hunt and the Conservatives were really a party that believed in the free market, they would let broadcasters and viewers (aka. entrepreneurs and consumers) decide what format television broadcasting should take. But then, the Conservatives are not a free market party.


One of the best things about the return of the Conservatives to government is that it helps us understand what they really stand for, rather than what they claim to stand for.

For example, it is a one of the great ironies of modern political history that both the Conservatives and Labour claim that the Conservatives are a free market party, when they are, of course, nothing of the sort.

Take Jeremy Hunt’s announcement last week that he wants to create a new TV network that would support local television in its infancy. Media companies would be invited to tender for the channel, but it would be subsidised with free spectrum and funded by advertising in an attempt to make local TV commercially viable from the start.

This is a classic example of paternalistic intervention: “seed funding” to “pump prime” an industry. “Free spectrum” actually means that valuable bandwidth will be given away to a cherished company rather than being sold to the highest bidder for the benefit of the nation (or at least the government). The taxpayer is to be mulct further courtesy of the BBC, which has pledged to finance some of the upfront capital costs. This makes sense for the BBC, of course, which not only wants to cosy up to Mr. Hunt but also might help it destroy the local newspaper and radio companies currently battling to survive.

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