The new Channel 5 licence should be awarded on the basis of a sound financial business plan, with social aspirations for a truly local TV service taking a back seat, according to a new report from the Economic and Social Research Council.
A series of local channels, largely insulated from each other, may stretch competition to the extent that they destabilize the existing services. Whilst the study supports local services as a longer-term objective, it concludes that it may be more realistic to consider whether local TV “might not be more effectively developed outside the framework of Channel 5”.
The Broadcasting Act provides for the establishment of a Channel 5, with probably one single national licence to be awarded by a tender process.
The Act does not restrict the type of programme service that the channel may offer, but the success of TV-am has shown the popularity of a mass-market national service with advertisers. It has been suggested that the channel could be operated as local or city- based television, and such issues will be addressed when the licence applications are submitted.
Problems with overlapping Irish and French frequencies mean that the C5 service is unlikely to cover more than 70% of the country (the south coast, most of Wales, Cumbria and Lancashire, as well as the fringes of East Anglia will not come under the station’s footprint).
In addition, those who are covered by the transmission will require a new aerial to receive the broadcasts, andthe channel’s UHF frequency will inter- fere with video recorders, and all VCRs will have to be retuned at a cost of around £300m.
A local Channel 5 service would incur higher transmission and programme production costs , and might find it difficult to produce large enough audiences to attract sufficient ad revenue.
The ITC invited letters of intent from consortia planning to bid for the Channel 5 licence last Autumn, and the application process will get under way once the C3 licences have been awarded.
