The broadcast industry has already evolved dramatically in recent years with the increasing dominance of the internet. In the beginning, the internet was largely focused on the potential global audience and having global reach to enjoying global revenue. However, consumer use of the internet has already started to mature and it has become increasingly clear that while people enjoy how the worldwide web makes the globe a much smaller place, they also want to be targeted with the right localised content as well.
There has been a marked increase in the public discussion about local TV, with government announcing a new generation of local TV services in recent months. This trend is set to have a significant impact on the TV landscape, with the current proliferation of channels resulting in customers becoming increasingly disconnected from the programmes they are offered, because they are simply not relevant. Regional TV in its current form is becoming increasingly irrelevant to the audience it serves and is a poor substitute for truly local content. Previously the regional TV advertising model made better economic sense, with a larger pool of consumers meaning a greater number of viewers, leading to bigger potential advertising revenues.
However, regional TV simply does not equate to long-term survival in today’s world of the individual. While cutting local news for its broader regional equivalent may mean lower costs, it also means fewer people are truly engaged with the content that is being offered to them. This only serves to lower viewing figures further, meaning that advertising revenues shrink and more cuts are required. This creates a continuous cycle of depleted viewers being offered increasingly regionalised, rather than localised, content until they are forced to switch off all together.
Regional media landscape must be localised
In an already tough economic climate, where budgets are being closely monitored, broadcasters need to find a solution that addresses both the lack of consumer engagement with regional TV, while also representing a stable long-term business model. Broadcasters must also find new ways to deliver content to the consumer, who has come to expect high quality, relevant content to be provided where and when they choose to engage.
In this age of personalisation, where regional TV is starting to have very little relevance to consumers, what use is news about a road closure in one town to someone living 50 miles away but who is served by the same regional news show? In spite of the global reach the internet gives individuals, people live their day-to-day lives on a local level, so the advertising campaigns, news programmes, weather reports and sports coverage that have a local flavour are the ones that will bring in new revenue streams and increase overall engagement.
Traditional media companies need to think about how they can transform their business models to combat the decline in advertising revenues and viewing figures, in order to restore the economic health of the current regional TV business model. For local TV to be successful, a new approach to broadcast infrastructure is required that will help to lower the costs of production and ensure a seamless delivery of news appropriate to local audiences. One way in which this could be achieved is by delivering TV via IPTV. Not only will this decrease costs and enable a truly local approach, but it will also encourage media organisations to embrace digital, saving costs right across the business.
Centralised system can allow for localised content
Many discussions in the UK are focussed on how local TV can be delivered through the existing digital terrestrial television (DTT) network and expanding the spectrum. However, recent comments from the culture secretary Jeremy Hunt suggesting that a series of individual stations, as opposed to a national network, are encouraging. While DTT networks can provide regional coverage, they cannot go into the granular detail required for a truly local service.
Therefore, the challenge is finding a way to effectively deliver local TV into UK-wide homes and here, the broadcast industry would do well to look at existing examples of local TV delivery elsewhere in the world. For example, the deployment of local TV services by TV4 in Sweden, shows how a transmitter-based infrastructure can help to allow the distribution of meaningful local news as well as advertising.
While there are similarities between the UK and Swedish infrastructures, there are also marked differences, as the UK’s existing DTT infrastructure is regional which means we do experience tailored services. ITV is a good case in point, as it transmits a different set of adverts depending on where you are in the country. However, it doesn’t transmit a different set of adverts to people on a local level, so people living in North and South London would receive the same ads. This is the crux of the problem with DTT, which lacks the flexibility to offer truly local coverage and investment would be more effectively made in building a better IP infrastructure.
The successful rollout of local TV will hinge on a nationwide IPTV offering, which supports the local services providing the content. IPTV, unlike DTT, can reach a much more targeted audience with news, weather and sports that is meaningful to the target audience. Whether transmitted through services such as YouView, connected TVs or dedicated apps for mobile and tablet devices, the trick to successful deployment of IPTV is ensuring there is a central tool to help facilitate local delivery.
In addition, if each local outlet is set up as an independent unit then costs will be duplicated and local advertising won't be able to support the operations. Therefore, it is also important to have as much of the infrastructure and administration shared or even centralised so that economies of scale can be successfully achieved.
Local adverts create national revenues
The success of local TV requires not just a shift in the way broadcast networks are set up, but also how the content is filmed and managed from start to distribution. The localised approach means that packages should be recorded and then uploaded to a central location from where it is transmitted to the relevant area. After all, the general package is the same; it is just the news that differs from location to location. Moreover, adverts and news are produced locally which brings with it low production costs and means the adverts and news stories actually have an impact on the population they are targeted at.
For instance, a local supermarket benefits because they know there is a strong chance the people watching the adverts are very likely to go into the shop and make a purchase. The idea of local TV also goes some way to dispelling the current myth that advertising revenues are declining along with audience figures, as with the right localised content, large advertisers can target specific regions and smaller companies can also target a much more engaged group. The trick lies in encouraging media organisations to invest in local news, employing quality editorial teams with the local knowledge to make their audiences know that their views and ideas are important.
Transformation, not evolution
Therefore, while indications are that the broadcast sector is moving in the right direction, in this age of personalisation it’s important to remember that content has to be relevant to engage the modern consumer. Traditional media companies need to transform their business models and regional TV infrastructure if they want to arrest the decline in advertising revenues and viewing figures.
This transformation has to be just that, as evolution of the existing DTT infrastructure will simply not provide the localised content and distribution network that truly local TV requires. If the UK is to fill this gap, a new approach to broadcast infrastructure is required that will help to lower the costs of production and ensure a seamless delivery of news appropriate to local audiences. This can only be achieved by delivering TV via IPTV, which will not only decrease costs, but also enable a truly local approach.