Written evidence submitted by Ofcom pa
1.1 Ofcom welcomes this opportunity to
submit evidence to the House of Commons Culture, Media and Sport
Select Committee's inquiry into the Future for Local and Regional
1.2 As the United Kingdom's independent
regulator for the communications sector, Ofcom's principal duty,
set out in section 3(1) of the Communications Act 2003 is:
to further the interests of citizens
in relation to communications matters; and
to further the interests of consumers
in relevant markets, where appropriate, by promoting competition.
1.3 Our main statutory duties in the area
of the Committee's inquiry are to secure the availability throughout
the United Kingdom of a wide range of television and radio services
of high quality and wide appeal and to maintain sufficient plurality
of providers of different television and radio services (section
3(2)(c) and (d) of the Communications Act).
1.4 We also have duties related to the provision
of public service television broadcasting (PSB), including regional
news coverage, and duties specific to radio broadcasting, which
include licensing of national, local and community analogue radio
stations and maintaining a range and diversity of local stations
broadcasting local material.
1.5 In addition, we have a duty to report
and make recommendations to the Secretary of State at least every
three years on the operation of the media ownership rules, which
include local radio ownership rules and local cross media ownership
rules. We also have an advisory role in relation to mergers in
markets where we have particular knowledge or insight. In addition,
we carry out the "public interest test" and report to
the Secretary of State if the Secretary of State chooses to intervene
in a media merger.
1.6 We are currently undertaking a range
of work that touches upon areas of the Committee's inquiry:
Follow-up work related to our Second
PSB Review completed in January 2009,
where we indicated that we would be doing further research to
understand the level of interest in local television and other
media to assess the future viability of local media as a whole;
this is being considered, amongst others, as part of our Local
A review of the regulatory framework
for local commercial radio and the future of local digital radio
services (as part of which we have submitted two papers to the
Government's Digital Britain project);
Preview of the media ownership rules,
with our report and recommendations to the Secretary of State
due by 13 November 2009; and
Assisting the OFT in its current review
of the local and regional media merger regime.
Much of this work is currently underway, and
we intend to publish consultation or discussion documents in the
summer. Where appropriate, we are also feeding in to the Government's
Digital Britain process, the outcome of which may influence the
workstreams outlined above. In particular, we are conducting research
and analysis in a number of areas for our Local Media Review,
including quantitative and qualitative consumer research and economic
analysis of the local media sector. We have also met with over
40 stakeholders in the sector.
1.7 Since our analysis is still ongoing,
this evidence outlines preliminary views. Until we publish our
documents in the summer; proposed policy approaches remain subject
to the outcome of a consultation process. This is therefore our
initial evidence to the Committee with a view to submitting further
evidence at the pleasure of the Committee.
1.8 The term "local" can have
many different interpretations for the public. Despite increased
convergence, we should not regard it simply as one business model
facing one set of challenges. Ofcom's primary focus is upon those
sectors we regulatetelevision and radioalthough
we are also looking at related industries of newspapers and internet
content given that they form part of the local media mix and impact
on television and radio.
1.9 Our preliminary findings suggest that
local media is important and valued by both citizens and consumers.
We believe local news and journalism play a role in democracy
by keeping citizens informed as to what is happening in their
locality. Other types of content, for example, features and listings,
have a role to play in promoting community cohesion through shared
1.10 A choice of local media services is
also important to both citizens and consumers.
1.11 There is evidence to suggest that
the local media sector is facing significant economic pressure
as a result of a combination of structural change in advertising
markets (advertising expenditure, in particular classified print
and radio display is migrating from traditional local media to
the internet) and the cyclical impact of the recession. This is
not manifesting itself in a uniform way, nor does it mean that
the underlying fundamentals of free to air television, broadcast
radio or indeed newspapers are broken. However business models
are coming under stress and there is pressure for change in the
way local media services are provided.
1.12 In some areas, these pressures may
be making key services unviable. In the Second PSB Review, we
concluded that regional news on Channel 3 (ITV, stv, UTV,
and Channel TV) is increasingly unviable and yet it is one of
the areas of PSB content most valued by audiences. We currently
consider that Independently Funded News Consortia are the most
suitable way to secure sustainable plurality in regional television
1.13 We have suggested a range of options,
but in broad terms, we believe that Independently Funded News
Consortia have the potential to provide quality regional television
news outside of the BBC on an ongoing basis. The potential composition
of Independently Funded News Consortia, which might include local
newspaper groups, in addition to broadcasters could enable regional
television news to be provided in new ways, giving the possibility
of increased levels of localness.
1.14 We have also set out our preliminary
thoughts on the future of radio. In our submission Building
on the Myers Review,
Ofcom suggested to Government four alternative options for regulating
localness on commercial radio stations serving populations of
under 700,000. Each of these would require some form of local
news to be provided, and we have set these out in the submission.
1.15 The need for new business models and
increased technological convergence may also place more pressure
upon the current ownership restrictions at a local level. At the
same time such rules are an important means of safeguarding plurality.
We are carrying out a review of the media ownership rules. If
appropriate, we intend to consult on recommendations to changes
to the rules before submitting our report to the Secretary of
1.16 Overall, the preliminary picture we
can present here is of a market in flux. The picture is by no
means universally negative, but there are serious challenges,
particularly to maintaining regional television news. Ofcom's
role within this is to try to secure the best interests of citizens
and consumers both in terms of their choice of quality content
and also ensuring that markets can function.
In the remainder this document, we provide a
brief background to the local media landscape in the UK in Section
2, and address the specific questions on which the Committee has
invited views, in Section 3, namely:
The impact on local media of recent and
future developments in digital convergence, media technology and
changing consumer behaviour.
The impact of newspaper closures on independent
local journalism and access to local information.
How to fund quality local journalism.
The appropriateness and effectiveness
of print and electronic publishing initiatives undertaken directly
by public sector bodies at the local level.
The role and effects of search engines
and online aggregators on local media.
The future of local radio and television
Opportunities for "ultra-local"
Opportunities and implications of BBC
Partnerships with local media.
Incentives for investment in local content.
The extent of plurality required in local
The desirability of changes to the regulatory
framework for print and electronic local media, including cross
media ownership and merger regulations.
A complex and evolving landscape
2.1 The UK's local and regional media sector
is a mixed ecology which includes approximately 1300 regional
and local newspaper titles, 350 BBC, commercial local and
regional radio services , regional television news bulletins delivered
by both publicly-funded and commercial providers, an embryonic
local television sector and a range of local commercial, public
and community-based media.
2.2 A key feature of local media is its
heterogeneity, with a large number of players operating in the
sector. There are 87 regional and local newspaper publishers
listed by the Newspaper Society as at January 2009 (excluding
non-members and publishers which only produce daily free newspapers)
and 76 commercial local radio operators, operating 304 services,
in addition to the 135 community radio providers broadcasting.
However few providers operate across platforms, with most concentrating
on a single medium. The types of organisation delivering local
media are also varied and widespread, ranging from public limited
companies, private companies, media trusts, local government and
the BBC to a range of community groups and individuals.
2.3 The heterogeneity of local media makes
it difficult to give a universally accepted definition as to what
"localness" is. Consumer research suggests that individuals
find it easy to distinguish between the concepts of "national"
and "regional", but there are differences in how people
classify different levels of localness. "Localness"
is broadly categorised into several scalesthough the boundaries
between these levels of localness are blurred and differ between
individual media and individuals. Thus definitions of "localness"
are inherently flexible, and what could be construed as "regional"
in some contexts, could be regarded as "local" in another.
2.4 Boundaries between "regional",
"local" and "ultra" (or "hyper")-local
are also blurred within industries. For example, the coverage
area of commercial radio stations (some serving populations of
several million) through to small commercial stations in Scotland
that reach of a few thousand. Likewise, in press, the geographic
coverage areas of newspapers can vary from daily newspapers covering
entire regions or metropolitan areas, for example, The Scotsman
or the Yorkshire Post, through to weekly newspapers with
content focussed on individual towns. Although classified as "regional"
BBC and ITV, stv, UTV and Channel TV regional content is the most
popular main source of "local" news in consumer research
that Ofcom has conducted. In the devolved nations, "regional"
news on television can be seen as national news, rather than news
about particular regions of the nations, contrasting with the
situation in England. Thus in the devolved nations, for example
Wales, the picture is more complex, with UK, Wales, regional (eg
South Wales) and (local eg Penarth) levels.
SUMMARY OF REGIONAL AND LOCAL MEDIA IN THE
Type of Media
|Number of services/publications
||Examples of operators/comment|
|Local and regional newspapers||c 1,300
||Trinity Mirror, GMG, Johnston Press Newsquest, Archant
Local/Regional commercial radio services
|304||Bauer, Globalk, UTV, GMG Radio, LRC
Channel 3 television
|8 TV bulletins in England plus 2 in Scotland, 1 in Wales and 1 in Northern Ireland. Sub-regional obligations in 6 regions
||ITV Plc, UTV, Channel TV|
BBC Regional TV news
|12 main programmes plus 3 English opts
||BBC also produces Newyddion for S4C|
|4 RSLs active. Very limited number of cable/satellite only local channels
||Misture of community groups, small firms and GMG (Channel M)
BBC Local and Nations Radio
|40 local stations in England2 national services in Wales, 2* Scottish national service, 2*NI service
||Includes non-English language stations in Wales and Scotland
|135 stations broadcasting
||Run by not-for-profit geographic and non-geographic focussed community groups
|Diverse range of sitesmany thousands operating
||Includes wide range of community groups, sites operated by traditional media groups, online only operators and search engines/content aggregators. BBC operator of network of 60 local websties, covering 55 areas (and 5 Welsh language)
2.5 In addition to the services outlined above, S4C
provides content in Welsh, including a news service, in addition
a range of factual, entertainment, drama, children's and sports
programmes in Welsh. BBC Alba provides nations TV programming
in Gaelic. The service includes news, Scottish sport music, entertainment
and children's programming.
2.6 In recent years there has been a trend towards greater
consolidation of local media.
In television, the Channel 3 television licence
is now operated by a single company (ITV plc) in England and Wales
following a period of consolidation of licence holders which began
in the 1990s.
In newspapers, the five major regional newspaper groups
account for over 70% of newspaper circulation, with the top ten
groups listed by the Newspaper Society accounting for almost 89%
In radio, the two largest commercial radio groups
now account for 39% of commercial local radio services after a
series of mergers between groups.
Consolidation has been primarily within a single media
platform, although there is some cross media ownership between
regional newspapers and radio (for instance, Guardian Media Group
and Tindle), and between regional television and radio (UTV).
2.7 The local media sector is currently undergoing both
cyclical and structural change, leading to financial pressures
on some of the firms operating in the local media space. The key
trend, the migration of advertising revenues away from traditional
media to online has been driven by increased take-up of internet
access and online services and entry of online only players into
the local media space. The impact of this structural change has
been compounded by the current macroeconomic environment.
The impact on local media of recent and future developments
in digital convergence, media technology and changing consumer
3.1 The vast majority of adults (90%) consume some form
of local media. Over seven out of ten watch regional news on television
and three quarters use a local newspaper at least weekly, while
nearly half listen to local commercial radio and one in five access
a local news website (one in four broadband users). While regional
television news and local newspaper readership are skewed towards
older age groups, the young are leading the take-up of local media
Source: Ofcom research conducted for BBC MIA, omnibus carried
out in August 2008
Base: All adults (n=2088)
3.2 Consumers see the range of local media available
fulfilling complementary purposes. Besides factual news and information
about their locality, people also listen to local radio for music
and entertainment and they read local newspapers for the classified
advertisements. People also value local information from a range
of sources, including council newsletters, political party communications
and local community leaflets and flyers. The internet has had
a major impact on the volume and quality of information available.
3.3 Three quarters of adults consume local news on a
regular basis, but the way people say they are consuming local
news has changed in recent years. Consumption of traditional media
is falling while use of the internet has grown. Newspaper circulations
have been falling since the 1970s at a consistent rate of around
2% per annum, whereas reductions in regional television viewing
and local radio listening have been more recent.
3.4 The proportion citing television as their main source
of local news has remained stable since 2002, at around half of
adults. At the same time, while 32% said local newspapers were
their main source of local news in 2002, this fell to 23% in 2008,
with indications of a decline in the use of radio falling from
13% to 11% and the internet growing from 1% to 4%. This growth
in internet use as people's main source of local news has to some
extent been at the expense of other mediaone quarter of
those accessing local newspaper websites said they do so instead
of reading the hard copy.
Source: Ofcom's Media Tracker, April & October 2008, Ofcom's
Technology Tracker 2005-07
Base: All UK adults aged 15+
3.5 The increase in the take-up of broadband, from 4%
households in Q4 2002 to 60% at the end of 2008 has
been a key driver in some of the shifts that have taken place
in the consumption of local media.
Source: Ofcom Technology Tracker, 2002-08
Base: All UK adults aged 15+
3.6 Our research suggests that take-up of broadband has
had an impact on the way local content is consumed. Among recent
broadband adopters broadband has had most impact on consumption
of local radio and local newspapers. Nearly 10% say they now read
fewer local newspapers than before and one in seven say they listen
to less local radio.
Source: Ofcom Research conducted for BBC MIA, SPA survey, June
2008 Base: All with broadband at home for less than two years
3.7 Younger recent broadband adopters (16-34) appear
to be driving this shift with almost twice the average saying
they now consume each of these media less frequently than before.
3.8 Broadband ownership has had a positive impact on
use of local news websites. Men (17%) and those living in rural
areas (18%) are most likely to say they use sources these more
The impact of trends on the economics of local media
3.9 Increased take-up of the internet has had a profound
impact on advertising markets in the UK. From 1998 to 2008,
Advertising Association data shows that there has been a migration
of advertising revenue away from traditional media, including
TV, regional/local press and commercial radio to online advertising.
TV advertising revenues fell by £300 million in real
terms (2000 prices) to £3.3 billion between 2002 and
2008, regional newspapers (including local titles) fell to £2 billion
from £2.8 billion during the same period. In contrast
Internet advertising grew in real terms from £0.2 to
£2.8 billion over the same period. According to Ofcom's
2008 International Communications Market Report, the UK had
the highest proportion of advertising revenue spent on the internet
of any major economy19% in 2007.
3.10 Online advertising presents attractive opportunities
to advertisers, including increased ability to target specific
audiences, and more effective measurement. Online advertising
is also flexible in terms of advertiser payment modelsunder
a pay-per-click or pay-per-action system, the advertiser is only
billed when a potential customer either clicks on an advert or
carries out some action, such as making a booking.
3.11 The economics of regional television news have been
well documented in our Second PSB Review.
The increased penetration of digital television and the audience
fragmentation in television viewing it brings have created structural
declines in advertising revenue and this has been compounded by
the impact of the recession. Recognising the decrease in the value
of its PSB licences, ITV plc scaled back its regional news services
at the beginning of 2009 from 11 to 9 regions and
has said it intends to exit from regional news completely in 2010.
Source: Advertising Association statistics. "Other"
grouped to include Business & Professional, Consumer Magazines,
Direct Mail, Outdoor&Transport and Cinema. Excludes directories
3.12 In local and regional newspapers there has been
a particular structural shift in classified advertising revenue
moving to online classified and search advertising. Classified
advertising spend in regional newspapers (jobs, motors property
etc) fell by 21% between 2003 and 2008, while on the internet
it grew seven-fold to over £2.6 billion by 2008.
3.13 Commercial radio advertising levels have consistently
failed to keep up with the rest of the market over recent years,
as radio display advertising has migrated to the internet. Industry
revenues declined by 7% in 2008 and analysts predict that
radio revenues will continue to decline in 2009, based on data
available from trading statements. Some of this decline may be
cyclical, but some of it is clearly structural, as advertising
moves from traditional media to the internet. Our recent analysis
of the sector (to be published in our Local Media Review) suggests
that, if the most pessimistic forecasts of industry revenue are
realised, many stations serving fewer than 700,000 people,
could be loss making by the end of this year.
3.14 The effects of this structural migration of advertising
revenues from traditional local media to online are being exacerbated
by the current economic environment. Certain types of classified
advertising revenues, (jobs, motors, property) appear to follow
cyclical trends very closely, and are thus at particular risk
during periods of economic downturn.
3.15 In our stakeholder interviews, local media companies
expressed concern about the combination of structural and cyclical
pressures on margins, and the impact this may have on the ability
of firms to meet their business commitments in the short term,
and to continue to invest in content creation in the long term.
Recent results issued by some local and regional media companies
reinforce these concerns.
Johnston Press reported a 34.4% fall in total advertising
revenues in the 19 weeks to 9 May.
Trinity Mirror reported a 36% fall in advertising
revenues in the 17 weeks to 26 April at its local and
ITV plc reported a 15% fall in ITV family channel
net advertising revenue in its May 2009 trading update.
3.16 In the radio sector, UTV Media Plc reported a 15%
fall in its GB Radio stations division in the 4 months to
the end of April 2009 in its May trading update.
3.17 The short-term outlook for the economics of local
media is dependent on the overall economic environment. Given
the complexities of ongoing structural change, and continued uncertainty
surrounding the economy, resulting in a wide range of forecasts,
it is difficult to conclude definitively what the future trends
for the economics of local media are with a high degree of precision.
However, it is likely that the structural shift in advertising
expenditure from traditional media to the internet will continue
after the recession, suggesting that margins for traditional local
media businesses may fall to a lower long-run steady state, with
further pressures on cost efficiencies within the industry.
The impact of newspaper closures on independent local journalism
and access to local information
3.18 Very little objective evidence has been brought
to bear in this area to date, so as part of our Local Media Review,
we commissioned research into recent newspaper closures. Our analysis
shows that out of 57 titles identified as having closed from
the start of 2008 to February 2009, 49 were weekly free-sheets
rather than paid for papers (see figure 9 below). Free-sheets
typically carry less non-advertising content than paid-for papers,
especially in relation to news content, and most of these occupied
the second or third position in the local market. Of the remaining
eight paid-for newspapers on the list, all of these were weekly
titles. Half of these closures were in the context of a rival
publisher having stronger titles on the market, two were a result
of the same publisher having stronger titles in the area and the
remaining two were a result of titles being consolidated or merged.
None of the titles examined were dailies.
3.19 Recent closures also need to be seen in the context
of a significant expansion in the number of titles during the
1980smost of these free weekly titles, whose circulation
rose significantly during the 1980s, taking advantage of growth
in the advertising market. So far there is no evidence of large
scale closures among dailies or paid weeklies
Source: Advertising Association
3.20 While funding for local newspaper journalism is
clearly outside Ofcom's remit, our duties in relation to PSBin
particular, the provision of regional news on television and radiomean
we need to understand wider issues in relation to local journalism.
We recognise the contribution and the ongoing role that the BBC
may play in this area. We have also proposed the creation of Independently
Funded News Consortia to ensure ongoing provision of regional
TV news in addition to the BBC, and to create a strong platform
for cross media local journalism in the future.
3.21 There are a wide range of platforms for the delivery
of local journalism, including local and regional newspapers;
local radio (both BBC and commercial); regional television (BBC
and ITV1), some local TV, and the internet. However, around 80%
of local journalists work in local newspapers and therefore developments
in newspaper journalism have a direct influence on broadcasting,
which often follows daily newspaper agendas. It is appropriate,
therefore, to consider the local media ecology in its entirety
when assessing the delivery of local journalism as a whole.
3.22 Figures from the National Union of Journalists suggest
that more than 900 journalists have lost their jobs on local
newspapers since July 2008. In our analysis, we estimate that
57 newspaper titles have closed since the start of 2008 to
February this year (see above), and a number of district and local
offices have shut as proprietors centralise operations in head
office newsrooms. At the same time, the reductions to ITV's regional
television news output have resulted in an approximate headcount
reduction of 600, although not all of these are editorial staff.
3.23 However, looking at longer term trends, there is
no evidence of either a structural or cyclical decline in the
number of journalists employed. Figures from the ONS show that
the number of journalists employed has fluctuated from year to
year between 2003 and 2008, with no obvious trend to the
Source: ONS Labour Force Survey 2003-08. Note: Includes unpaid
family workers and persons on government-supported training and
employment programmes. Includes both fulland part-time
3.24 In our interviews we found that regional newspaper
stakeholders are seeking to reduce the cost base of their businesses
in response to the financial pressures the industry faces. However,
despite the pressure to reduce costs, evidence suggests that there
is a tendency to seek to reduce costs and headcount from non-core
functions before seeking to make cost savings in the core function
of newsgathering which we estimate accounts for a modest proportion
of overall local and regional press cost (17%) in Figure 12.
Source: Estimated from industry reports, stakeholder interviews
and Ofcom analysis
3.25 Our discussions with local newspaper stakeholders
suggest that one of the most important reasons for readers to
buy newspapers is to read the news content. For this reason, job
losses within the newspaper industry appear to have been concentrated
on management; sales; administration and production. Many newspaper
groups, including Trinity Mirror in South Wales; Johnson Press
in central Scotland and Guardian Media Group in Manchester have
closed outlying offices and centralised advertising and production
functions in major newsroom hubs.
3.26 This area lies outside Ofcom's statutory remit,
and we are therefore unable to provide definitive comments as
to the appropriateness and effectiveness of print and electronic
communications carried out by public bodies at the local level.
However, this topic was spontaneously raised by several stakeholders
during discussions held as part of our Local Media Review.
3.27 We note that a range of public bodies, especially
local authorities now produce quarterly, monthly, fortnightly
or even weekly publications of varying formats, typically in magazine
or newspaper format. A Local Government Association survey in
early 2009 found
that 95% of the 199 local authorities who responded to the
survey had commissioned a regular publication. Councils in Wales,
Northern Ireland and Scotland also publish newsletters and magazines
which also look and feel like local commercial newspapers. These
are distributed free of charge to local residents, raising concern
amongst some, such as the Newspaper Society during stakeholder
interviews. Stakeholder concerns relate to both advertising markets,
where they are concerned at competition for advertising revenue
from council publications and issues concerning the impartiality
of council-produced content when reporting on council activities.
3.28 In London, some local authorities have invested
in their own local newspapers. They say they fill a gap that is
no longer filled by commercial weeklies; a lack of local newspapers
was cited by 25% of the London councils in the LGA survey as a
reason behind providing their own publication. Hackney Today,
a publication by the local borough council, claims "the largest
reach in the borough of any local paper". H&F News
(published by the London Borough of Hammersmith and Fulham) includes
sections on business, property, entertainment, and sport. The
LGA reports that 28% of the authorities who responded to the survey
took no advertising in their publications.
3.29 Apart from council-funded newspapers, public bodies
are looking to find more cost-effective ways to advertise job
vacancies. In Scotland a consortium of public sector organisations
has created a single jobs portal (Myjobscotland).
Local newspaper groups in Scotland told us that there was no evidence
that this was a more efficient use of public money than advertising
in local newspapers and indicated that some form of impact assessment
would be in the public interest.
3.30 The Government has issued guidelines to public bodies
concerning the use of the internet to disseminate public information,
and as a result, local councils are making Increasing use of the
internet to make information available to the public and to journalists.
In particular, journalism related stakeholders have suggested
to us in interviews that the Freedom of Information Act (FOI)
enables them to obtain information from local public bodies more
easily than in the past.
3.31 Some authorities, such as the London Borough of
Camden are videoing their council meetings and placing them on
their websites, in addition to publishing minutes and agendas
3.32 Preliminary conclusions from our consumer research
suggest that residents use and value local authority websites
to access factual information about public services in their area.
3.33 Online local media is characterised by an often
complex value chain in which several parties play a role in the
creation and distribution of content to end users. These parties
may include groups not traditionally associated with the creation
of local content such as web portals (eg Yahoo Local),
web hosting services (eg online video sites such as YouTube
hosting local video content), and search engines.
3.34 During our Second PSB Review,
Ofcom carried out research into the accessibility and discoverability
of online public service content. While the research did not focus
specifically on local online public service content, it suggested
that search engines have a role to play in making content accessible
to citizens and consumers. Search engines in particular were cited
as the most commonly used way to access online public service
content (89% of respondents).
Source: PSB Review phase 2: Public Service Content and the internet,
3.35 Discussions with stakeholder interviews suggest
that there are issues around the discoverability of certain community/ultra-local
online content via traditional search engines, due mainly to the
lack of scale of sites featuring such content. We note that stakeholders
have suggested that emerging specialist local content search and
aggregation services such as Localmouth.com and Hophive.com
may have an increasing role to play in addressing issues around
discoverability in the future, especially if these services can
gain significant scale. Increased geographic targeting by online
advertising networks may help to address some of the issues around
monetisation of some types of ultra-local online sites. The BBC
has also said that it may have a role to play in linking with
community-based websites. This formed part of its proposal to
launch 60 local video websites which was rejected by the
Trust in 2008.
3.36 National online classified advertising sites such
as Propertyfinder, Rightmove and Monster.com
play an important role in the online mix. In certain sectors,
specialist online classified sites account for the majority of
online classified revenuesfor example, our analysis suggests
that specialist online recruitment sites account for 65% of all
online classified recruitment revenues.
3.37 We note the ongoing debate surrounding the role
of news aggregation sites and their use of content originated
from other sites. Some parties have expressed concern that online
news aggregation sites undermine the viability of news gathering
by providing news content without investing in original news gathering.
We also note however, arguments that that search engines and aggregation
sites may play a key in aiding discoverability of local online
content and directing traffic to online news sites.
Regional television news
3.38 Consumers regard regional television as their most
important source of local news and information, ahead of newspapersand
regional news on Channel 3 continues to attract an audience
share of around 20 % nationally (an average of 4-5 million
viewers per evening), which represents significant reach and impact.
Ofcom research for the Second PSB Review showed that audiences
also value the plurality that is provided through the existence
of ITV regional news alongside the regional news offered by the
BBC. This was especially so in the devolved nations, but also
in the English regions.
3.39 However, ITV plc has indicated it will not be able
to deliver its regional news service to England and Wales beyond
2011. And in Scotland and Northern Ireland, stv and UTV respectively
are also facing deficits on their PSB licences.
3.40 For this reason, Ofcom set out in its Second PSB
Review a proposal for slots to be made available within the ITV
network schedule, into which nations and regions news programmes
delivered by outside consortia could be inserted. These programmes
would be publicly funded through competitive tender.
3.41 We regard the continuation of a nations and regions
news service on commercial PSB television as an important priority.
The proposal for Independently Funded News Consortia is therefore
the most important aspect of this submission. We consider it to
be the most effective and impactful way to deliver a high quality
regional service outside of the BBC.
3.42 Under the proposal, an awarding body would issue
a tender for the provision of a news service within the existing
ITV schedule. We would expect a range of media organisations to
be interested in joining potential consortia, including news broadcasters,
regional newspaper groups, local television stations, picture
agencies or independent producers. The BBC has offered to make
its regional resources available to ITV regional licensees in
order to reduce their cost of delivering regional news and we
understand that BBC resources would similarly be made available
to potential consortia.
3.43 In England and Wales, one option would be to retain
the current nine ITV plc regions to provide a service similar
to that currently broadcast. However we believe that an enhanced
option could deliver much more than the current service and in
the process create a more sustainable basis for regional and local
news delivery as a whole. Such an enhanced option could deliver:
a quality television news service, providing plurality
alongside the BBC;
a range of news in nations, regions, cities and locally,
through maximising the "localness" (granularity) of
the existing ITV transmission footprint combined with more localised
television and video services, which would offer scope for a full
cross media service, integrated into and contributing to the wider
local media ecology;
clear and transparent set-up and operation, with independent
significant audience reach and impact.
3.44 Contracts would likely be based on the existing
ITV regions but could be awarded through a national or regional
tender process. Contracts would be awarded by beauty contest based
on agreed levels of funding and awarded by an independent body
(eg a new body designated by government, or the Ofcom Content
Board, or BBC Trust).
3.45 The nature of the consortia may vary by region,
depending on the characteristics of local media markets involved
and the level of broadcast expertise available. For instance,
in north-west England, a full cross media service supplied by
a new consortium and including local television might be achievable
relatively quickly. In other areas such as the east of England,
this may take much longer to realise and more modest proposals
might be more appropriate in the short term.
3.46 In summary, the enhanced proposal for Independently
Funded News Consortia addresses the issues around provision of
regional news, but also recognises some of the concerns around
the ability of the wider industry to adapt to a cross media model.
3.47 Decisions on funding rest with Government and there
are a number of other practical issues that are still to be resolved
The nature and composition of an awards body or bodie.s
The role of the host channel in the awards process
and the level of editorial influence to be allowed thereafter.
Ongoing governance and compliance.
The extent to which it will be possible to achieve an
enhanced local service is obviously also dependent on the level
of funding available.
3.48 We have made a detailed submission to Digital Britain
in relation to Independently Funded News Consortia and are awaiting
the outcome of the final Digital Britain Report.
The future of local radio news
3.49 Local news is listened to by 84% of people who listen
to local commercial radio on a weekly basis, more than other forms
of content, including local weather (73%) and local travel news
Source: Ofcom research, fieldwork carried out by SPA in June 2008
3.50 Local radio is valued not just for news but also
for "softer" local content. Ofcom's qualitative audience
research has identified two distinct types of local radio content,
both of which are important to consumers:
Core functional content comprising local traffic and
travel, local weather and local news. This is of interest and
importance to all listener types and seen as a crucial element
of local radio output by the majority of listeners in all locations.
Human, engaged local content, for example discussion
of local community issues, local entertainment, and locally-themed
chat shows and competitions. This varies in perceived importance
depending upon the life-stage and personal tastes/needs of the
listener. Thus community issues are of interest to the more community
minded, or those in rural areas; phone-ins are important for older,
speech radio listeners; sports coverage for sports fans etc.
3.51 As we highlighted in our two recently published
submissions to Government, Radio in Digital Britain,
and Building on the Myers Review,
the central challenge for policy and regulation is to meet the
public's demand for the local radio content they value, in a way
which takes account of the financial realities faced by operatorsso
that regulation does not threaten the provision of the very thing
it is designed to protect, localnesswhile at the same time
creating an industry structure that could fit a digital future.
3.52 Currently, we generally require local news to be
produced locally and broadcast during peak time (breakfast and
drive time) by all stations, although the smallest tier of FM
stations (those serving populations of less than 250,000) may
be permitted to share broadcast hours outside of breakfast time.
3.53 In our submission Building on the Myers Review,
Ofcom suggested to Government four alternative options for regulating
localness on commercial radio stations serving populations of
The "Local Impact Test" proposed in the
Focus on news, information and community notices.
A new "Localness Charter."
Liberalise current rules, and create a new set of
3.54 It is likely that all four would involve a requirement
for local news to be broadcast, but they differ in two respects:
3.55 The second option (focus on news) would see the
requirements for news strengthened. This could be in terms of
quantity of output, or specifications regarding what the output
3.56 Each of the four options would likely result in
a different balance between news and "softer" content
being struck, although it is difficult (particularly with the
first option) to predict what that balance would be.
3.57 Where legislative changes are required for any of
the options, Ofcom would need to consult on the detail of any
changes to localness regulation within its powers. These would
occur after publication of the Government's final Digital Britain
Report, and the consultation would further inform our views and
3.58 It is difficult to provide a precise definition
of "ultra-local". Despite this, it is possible to identify
a range of services which provide content and services to smaller
scale geographic areas than those traditionally served by local
press and BBC and commercial local radio services. A key characteristic
of these ultra-local services is that they are often run by the
targeted communities, offering a high proportion of user generated
3.59 Ultra-local media outlets are not a new phenomenon;
the UK has long had a history of civic activism, with community
groups, such as residents associations or parish councils, for
example, publishing newsletters for their memberships. However,
relatively recent developments have resulted in renewed opportunities
for "ultra-local" services in the UK.
3.60 First, the development of accessible online content
authoring and management tools, combined with increased internet
usage means that the internet is playing an increasingly important
role in the creation, distribution and consumption of "ultra-local"
3.61 Secondly, legislation has created a new form of
radio licensee with specific rules on providing services to underserved
communities, which may include specific geographic communities,
and on providing opportunities for discussion and the expression
of opinion. Since 2005 Ofcom has issued over 200 community
radio licences with 135 stations on air and is continuing
to license new stations where possible. These stations serve a
variety of audience needs within smaller catchment areas. They
are non-profit in nature and are limited to raising no more than
50% of their income through advertising and sponsorship (though
some face tighter restrictions on advertising due to overlap in
their coverage areas with small commercial stations). While staffing
costs account for the majority of the sector's costs, volunteers
play an important role in the sector. On average each community
radio station has 74 volunteers who give a combined total
of around 214 hours volunteer time a week per station (an
average of just under three hours for each volunteer a week).
3.62 There are several factors which lend Community Radio
to providing "ultra-local content. Firstly, constraints on
the availability of spectrum in many places means that broadcast
power outputs need to be relatively low, limiting the potential
size of area served by the station. Secondly, the nature of community
radio, ie that it is run by members of the community which it
seeks to serve, lends relevancy, and local knowledge to output.
Finally, Ofcom's regulation of Community Radio has a role to play
in supporting the potential for "ultra-local" media
by supporting stations in following their key commitments,
which through detailing both output requirements, and other station
commitments around training, for example, helps to ensure that
these stations deliver social gain to their immediate communities.
3.63 As the chart shows, general content for ultra-local
communities accounts for the majority of the communities served
by community radio stations.
Source: Ofcom, May 2009
3.64 Ofcom is continuing to license new community radio
stations, which may provide "ultra-local" content, aimed
at the needs of the community which it seeks to serve. However,
intensive use of spectrum in some parts of the country (particularly
in certain urban areas) means that community radio stations are
currently unable to be licensed in some parts of the country.
3.65 Given the diversity of the community radio sector,
the online presence of community radio stations varies between
stations. Many community radio stations, such as BCB 106.6 fm
(a Bradford based station) make the service available to a wider
audience via the web and via mobile. Depending on their resourcing
and strategy, other community radio stations may differ in their
approach to the internet and may have a significantly smaller
3.66 Press groups are also playing a role in the provision
of ultra-local content, for example Northcliffe will start to
rollout a network of hyperlocal sites from June, covering towns
regarded as too small to have their own paper. While being owned
by Northcliffe, much of the content will be provided by citizen
journalists, and overseen by "community publishers".
The mixing of professional and citizen-based journalism has also
occurred in some local newspaper titles, where for example, amateur
citizen journalists write a weekly column on their own village,
providing a degree of hyperlocal coverage amongst professional
journalistic content covering a larger geographic area. Other
press groups, including Trinity Mirror have also launched hyperlocal
3.67 Online community media also has a role to play in
the provision of ultra-local content. Our discussions with stakeholders
suggest that there are many sites run by community groups and
volunteers. Compared with more traditional forms of local media,
online offers community media relatively low barriers to entry
in terms of funds, equipment and skills needed to get started
(for example some "ultra-local" sites use established
blogging platforms and video hosting sites). The nature of web
based content means that it is also suited to collaborative working
practices, enabling the number of contributors to grow as the
community group grows in size.
3.68 We are also studying developments in the US with
interest. Major newspapers are closing down, (for example the
Seattle Post-Intelligencer) and are being replaced by smaller
online news services drawing on networks of citizen journalists,
bloggers and local community websites.
BBC PARTNERSHIPS WITH
3.69 Partnerships between groups forms a part of the
local media landscape. The BBC has the potential to be a major
contributor to the growth of community media and recently announced
its initiative to extend its regional news partnership proposals
to other local media providers, including Independently Funded
News Consortia and community media. The BBC has also said it will
make its College of Journalism available to the general public.
Several types of partnership between the BBC and other players
have also been discussed. These include:
A proposed partnership with ITV plc for the provision
of regional news, later extended to other local media organisations.
BBC-CSV partnership promoting volunteering and active
citizenship through outreach and on air campaigns.
Community Media Associationa Memorandum of
Understanding was signed with the BBC English Regions in 2006,
reflecting and building upon the relationships that some community
radio stations had already built with the BBC.
3.70 In December 2008, the BBC published its Public Service
in which it proposed partnerships in a range of areas including
production (with specific proposals in relation to regional news),
distribution of content, and "enabling" partnerships
(for example, sharing of training) with a view to supporting PSB
beyond the BBC in the future. The BBC estimated that in total,
its partnership proposals could result in an additional £120 million/year
value to PSB.
3.71 In relation to regional news, the BBC suggested
that partnership with ITV could include:
Sharing of raw news footage with other organisations.
Sharing of infrastructure in the medium-long term.
3.72 The proposed BBC-ITV partnership in relation to
TV regional news provision is unlikely to be put into practice
given that ITV does not see it delivering enough benefits to secure
ongoing regional TV news. In January 2009, Michael Grade wrote
an article in the Telegraph discussing regulation and the
commercial pressures the industry was facing. In relation to possible
partnerships with the BBC, he wrote that "ITV and the BBC
would share facilities, buildings and technologies across the
UKmaking commercially funded regional news much more cost
3.73 At the time of the signing of the MOU between the
BBC and ITV plc on 12 March 2009, ITV plc estimated synergies
of £1.5 million/year in 2011, rising to £7 million/year
by 2016. The MOU covered three main areas for the partnership
Sharing of newsroom and studio facilities in England,
and co-location of regional news services in Cardiff.
Sharing of some regional news picture gathering resource.
Establishment of a pool of pictures available to both
the BBC and ITV plc, with ITV plc also gaining access to certain
raw feed material.
3.74 At the Westminster Media Forum on 24 March
2009, ITV's director of news, current affairs and sport, Michael
Jermey stated that ITV had concluded that initial savings to ITV
plc of £1-2 million/year meant that "We have therefore
reached the conclusion that the benefit of a BBC partnership would
not be sufficient in itself to provide a viable, guaranteed future
for news in the nations and English regions".
3.75 In any partnerships involving the shared use of
content, it is likely that agreements would need to be struck
between the BBC and the other partner as to the nature of the
content that is shared, and how the content is used by the other
3.76 BBC partnerships are active in the community radio
sector, where the partnerships have given community radio stations
access to BBC journalism training, technical training, use of
specialist equipment, and staff secondments from the BBC. As the
nature of these partnerships differs substantially differ between
areas and groups, some examples of BBC partnerships with community
radio stations are outlined below.
TrainingPure FM, a Stockport based community
radio station benefited from the BBC Manchester Community Radio
Bootcamp, in which 11 volunteers attended workshops on presenting
and script writing. ALL FM in Manchester's partnership
with BBC Learn for Real has included a masterclass on programme
ideas with BBC producers and a mentoring scheme for volunteers
, and all staff and volunteers at Insight Radio, a community
station in Glasgow have received training from BBC staff in a
range of areas.
Use of specialist equipmentSouthall community
radio station Desi Radio used BBC London outside broadcast
facilities to run a show at the London Mela 2007.
SecondmentsIn addition to use of BBC outside
broadcast facilities, following a trial one day a week secondment
by a BBC London 94.9 journalist, a tri-media BBC journalist
from BBC London became based at Desi Radio.
3.77 The BBC partnerships may also benefit the BBC, with
community radio volunteers being a potential pool of talent from
which the BBC can draw. For example, a volunteer from Bristol
community radio station BCfm was given a regular show on
BBC Radio Bristol, and a volunteer from Forest FM became
a weather and traffic presenter on BBC Radio Solent.
3.78 We are currently in dialogue with the BBC and the
BBC Trust regarding the BBC's role in the local media ecology.
3.79 As consumer research suggests, audiences appreciate
and value localness in content, with 90% adults consuming some
form of local media, suggesting that the market provides an incentive
for continued investment in local content. During interviews local
media companies have consistently indicated ongoing interest in
continued investment and development in their online services
in recognition of the structural shift in advertising revenues
towards the internet, and to reach a wider audience. Examples
of this includes increasing the range of content carried on websites
(for example, the Newbury Evening News website www.newburytoday.co.uk
produces a daily video news bulletin) or local media groups setting
up their own online classified advertising sites.
3.80 The proposed creation of Independently Funded News
Consortia may provide an additional incentive for investment in
local content via a market intervention. In this regard the competitive
funding aspect of Independently Funded News Consortia is important,
given the role that levels of investment in local content may
play in determining the successful bidders to provide services.
3.81 There is currently little local TV in the UK, in
contrast to a range of other European countries, in part due to
the uncertainties surrounding the economics of commercial local
television. Recent analysis conducted during Phase 3 our
Second PSB Review shows that even city-based local television
may not be profitable outside the major markets of London and
are currently only four local TV stations broadcasting on terrestrial
TV (Channel M in Manchester; MATV in Leicester; Northern Visions
in Belfast; and York TV). All carry news in some form. We also
note the potential role for community involvement in local television
3.82 Digital switchover and the digital dividend may
create an opportunity for the further development of local TV
services in the UK. In particular, our current policy of releasing
geographic interleaved spectrum via a technology neutral auction
process may act as a catalyst for new investment in local digital
terrestrial TV services in a range of locations around the United
Kingdom, potentially leading to a network arrangement. Work is
ongoing in this area, and we intend to release a further consultation
in relation to the digital dividend later in 2009.
3.83 One of Ofcom's principal duties in carrying out
its functions, as provided by section 3(2)(d) of the Act, is to
further the interests of citizens and consumers by securing "the
maintenance of a sufficient plurality of providers of different
television and radio services."
3.84 While issues around a wide range consumer choice
and access to quality content are important, we believe that plurality
has a value in its own right from the citizen perspective. Plurality
has a key role to play in helping to promote active citizenship,
supporting accountability and strengthening democracy. Plurality
supports these desirable outcomes by providing a framework in
which informed citizens can fulfil their role in a modern liberal
3.85 Our consumer research also indicates that consumers
value plurality, seeing benefits primarily in terms of choice
and quality of content.
Plurality in television
3.86 In Phase 1 of our Second PSB Review, we published
which highlighted that participants felt that plurality of media
provision helped meet the need to cater for different tastes and
interests and to provide different viewpoints.
3.87 The research also highlighted that participants
saw competition for quality as a crucial benefit of plurality,
and that competition could deliver a number of benefits including
high quality programming, impartiality and accountability.
3.88 The research shows that audiences value plurality
in programming at both a national and regional level. For example,
73% of respondents felt that it was important that more than one
of the main channels provides current affairs about their nation
or region; and 65% felt that it was important that there was plurality
in other programmes about their nation or region
Source: PSB Quantitative Research, Q34, 2,260 UK adults aged
16+, Ofcom OctoberDecember 2007
3.89 Our final statement for Ofcom's Second Public
Service Broadcasting Review: Putting Viewers First
sets out recommendations to ensure that the interests of citizens
and consumers can continue to be fulfilled through ongoing production
and availability of a choice of content that delivers the purposes
3.90 One of those recommendations was to take forward
work by doing more detailed analysis of the issues regarding provision
of public service content (PSC) at a local level across all media
This is being taken forward through research being carried out
as part of the Local Media Review.
3.91 In the case of local radio, a plurality of station
owners is currently secured directly by the radio-specific media
ownership rules and indirectly by the application of competition
law. For example, in the most recent large radio group merger,
of Global Radio UK Limited and GCap Media plc, the merged entity
divested a number of stations in the Midlands due to competition
law issues and the media ownership rules.
This sense of plurality is important for the democratic concerns
around "concentration of voice" in local radio markets.
(In addition, holders of commercial radio licences cannot hold
community radio licences.)
3.92 From the consumer perspective, however, questions
of diversity on local radio may be more salient than those of
ownership plurality. Radio stations in a given local market tend
to be differentiated by their formats (which regulate a number
of aspects of their content) rather than by their news offering.
Diversity in this sense is important for the choice it gives consumers,
rather than for the more citizen-oriented concerns around "voice".
Research into plurality is being carried out as part of the
consumer research for the Local Media Review
3.93 A programme of primary consumer research has been
conducted as part of the Local Media Review to build upon Ofcom's
existing evidence base in relation to local media. Some of this
ongoing research relates to consumer attitudes to plurality at
the local level. To build a thorough and wide understanding of
consumer attitudes to plurality across the UK, Ofcom is conducting
both quantitative research (25 minute face to face interviews)
and longer qualitative research (3 hour deliberative group
sessions in 8 locations across the UK). By combining the
results of these two surveys, we hope to build up a robust view
of UK consumer attitudes towards plurality in local media.
3.94 The quantitative research is representative of UK adults
aged 16+ and asks questions relating to attitudes to media ownership,
including attitudes to single ownership within sectors and cross
sectors. This enables us to identify headline attitudes towards
plurality across a large sample size, enabling comparisons to
be drawn between different regions of the UK.
3.95 The qualitative research focuses on gaining a deeper
insight into attitudes towards plurality and cross media ownership.
The use of deliberative groups enables us to obtain considered
views and attitudes towards the value of local media, plurality
and trust and the reasoning behind these attitudes. The focus
groups have been held in a range of locations throughout the UK,
including the devolved nations. Our research into the availability
of local media in these locations enables us to place the focus
group discussions in context.
3.96 The findings of our consumer research across a range
of issues will be published as part of our Local Media Review.
3.97 Print and electronic media are regulated in a number
of different ways.
3.98 Ofcom has a range of statutory duties which relate
directly or indirectly to the local media sector. Ofcom's remit
in this area is set by the Act, and specifically by the provisions
in the Act concerning PSB, radio, the media ownership rules and
the public interest test in relation to media mergers. The Broadcasting
Act 1990 also gives Ofcom duties and powers relating to local
3.99 Ofcom's principal duty in carrying out its functions
is to further the interests of citizens in relation to communications
matters and to further the interests of consumers, where appropriate
by promoting competition.
3.100 In carrying out this duty, Ofcom is required to
secure a number of things including:
the availability throughout the United Kingdom of
a wide range of television and radio services which (taken as
a whole) are both of high quality and calculated to appeal to
a variety of tastes and interests; and
the maintenance of a sufficient plurality of providers
of different television and radio services.
3.101 Significantly, amongst others, Ofcom must take
into account the different interests of persons in the different
parts of the United Kingdom, of the different ethnic communities
within the UK and of persons living in rural and in urban areas.
3.102 Ofcom must also ensure that television and radio
broadcast services meet minimum standards of taste and decency.
3.103 Responsibility for the merger regime lies with
the OFT, though Ofcom has an advisory role in relation to mergers
in markets where we have particular knowledge or insight. Ofcom
also carries out the "public interest test" and reports
to the Secretary of State if the Secretary chooses to intervene
in a media merger (see further below).
3.104 Ofcom is not responsible for the regulation of
newspaper print and online content, which is overseen by the Press
3.105 PSB: relevantly, the legislation requires Ofcom
to include positive content requirements in the individual Channel
3 licences requiring a minimum commitment to provide high
quality regional news and regional non-news of particular interests
to persons living within each Channel 3 licensed area.
3.106 Radio: Format and licensing controls define localness
in terms of content, where stations can be based and where some
programmes should be made. This is designed to keep content local
and contributes to plurality of formats. Community radio has its
own set of format requirements and restrictions on advertising.
3.107 Television and radio broadcast content: these are
subject to the Ofcom Broadcasting Code which covers standards
in programmes, sponsorship, fairness and privacy, including standards
of taste and decency (eg standards to protect the public from
harmful and/or offensive material to protect the under-eighteens).
3.108 Media ownership rules: Ofcom has a duty to review
the operation of the media ownership rules and make recommendations
for any changes to the Secretary of State at least every three
years. In summary, local cross media ownership rules restrict
cross ownership of Channel 3, radio licences and local newspapers
within a given local area. Radio ownership rules place detailed
restrictions on ownership of radio stations and multiplexes at
a local level, as well as restrictions on ownership of national
3.109 Media merger regime: The Secretary of State may
intervene in media mergers (including mergers involving newspapers)
and can take public interest considerations beyond competition
law into account, especially in relation to ensuring promoting
plurality in a range of views. Ofcom carries out the public interest
test and provides a report on its recommendations to the Secretary
The Media Ownership Rules
3.110 The local cross media ownership rules restrict
ownership in three ways:
Regional 3 Licence and local newspapers
A person may not acquire (directly or indirectly) a regional
Channel 3 licence if they run one or more local newspapers
that have an aggregate market share of 20% or more in the area
covered by the regional Channel 3 licence;
Local analogue radio licences, local newspapers and
regional 3 licences
These restrictions are based on the points system for radio
licences which underpins the radio ownership rules. This allocates
points on the basis of coverage overlap.
In an area where there are three or more overlapping local
radio analogue licences, a person who owns one or more local newspapers
with a market share of 50% or more in the relevant coverage area,
or the holder of the regional Channel 3 licence, may become
the holder of one or more of those radio licences only if the
points attributed to the licences held by that person would not
account for more than 45% of the points available in the area.
Local analogue radio licences, local newspapers and
regional Channel 3 licencesNo one person may hold
at the same time:
a local analogue radio licence; and
a regional Channel 3 licence with a potential
audience that includes 50% of the audience of the analogue radio
one or more local newspapers which have a local market
share of 50% or more in the local coverage area
3.111 As said, Ofcom has a statutory obligation to carry
out reviews of the operation of all the media ownership rules
(including the local cross media rules) at least every three years.
We must report our findings to the Secretary of State, including
recommendations to amend or repeal any of the rules (if any).
Our next report is due no later than 13 November 2009. After
we make our recommendations it is up to the Secretary of State
to decide whether to seek changes to the rules by secondary legislation.
3.112 We intend to publish a Consultation Document on
our review of the media ownership rules in early summer. An important
focus of the review will be the local cross media ownership rules
and whether it may be desirable to change them.
3.113 The rationale for the media ownership rules is
to help to ensure that citizens have access to diverse viewpoints
in news, information and opinion so that they can participate
in the democratic process in an informed way. The aim of our review
is to assess whether, in light of current changes, the current
rules remain fit for this public policy purpose.
3.114 A key question for our review of the local cross
media ownership rules will be to determine whether the rules still
strike the correct balance between the citizen goal of diversity
of viewpoints and the goal of allowing companies the freedom to
maintain sustainable business models (and thereby have a basis
for delivering higher quality programmes, greater creativity and
3.115 Two of the key issues we will therefore look at
to determine our views on the local cross media ownership rules
Are the rules outdated because consumers and citizen
behaviours have changed? For example, because consumers have access
to viewpoints from other media sources, such as the internet?
Are the rules acting against the interests of consumers
by limiting companies' freedom to survive, consolidate and invest?
3.116 As Section 3 demonstrates, our initial evidence
indicates that the way in which people consume local media is
changing. However, there is still strong reliance on traditional
media for local news. A key issue for our review will be to understand
consumer trends in more detail.
3.117 As we have also set out in Section 3 local
media is facing financial pressures. A key issue for our review
will be determining how the rules may impact on traditional media
business models and behaviour at the local level.
3.118 We are currently gathering further evidence to
inform our views on this, which the consultation process will
further inform our views on. Much of our evidence will come from
the work which is being done as part of the Local Media Review,
which is looking at changes in consumption patterns of local media
and the structural and cyclical challenges facing traditional
media at the local level.
3.119 Ofcom's role with respect to the merger regime
is limited. The Secretary of State may choose to intervene in
a media merger where he considers there may be "public interest"
considerations including plurality. If the Secretary of State
does this Ofcom carries out the "public interest test"
and reports to the Secretary of State. We also have an informal
role providing the OFT with data and advice on mergers in markets
where we have particular knowledge or insight given our role as
3.120 As part of our review of the media ownership rules
we will be considering the operation of the "public interest
test" but it is not within the powers to review the operation
of the merger regime more generally. As the Committee would be
aware, following the Digital Britain Interim Report, the OFT is
currently undertaking a review of the local and regional media
merger regime including considering whether it is sufficiently
flexible to allow business models to manage the transition to
the digital age. The OFT will decide whether any legislative changes
are needed to the merger regime. Ofcom is feeding into that review.
Ofcom research, fieldwork carried out by SPA in June 2008. Back
Source: Ofcom research, fieldwork carried out by SPA in June 2008. Back
Source: Ofcom research, fieldwork carried out by SPA in June 2008. Back
Section 3, Ofcom's Second Public Service Broadcasting Review-Phase
2: preparing for the digital future, Ofcom, September 2008 Back
Survey of local authority newsletters/magazines 2009, Local Government
Association, May 2009 Back
Figure 10, "The Public's attitude towards plurality",
Ofcom's Second Public Service Broadcasting Review Phase 1: The
Digital Opportunity, 10 April 2008, p. 35. Back
PSB Review Phase 1, as above, p. 35. Back
Ofcom's Second Public Service Broadcasting Review: Putting Viewers
First, Statement, 21 January 2009. Back
PSB Review: Putting Viewers First, Statement, p.102-103. Back
See http://www.oft.gov.uk/shared_oft/mergers_ea02/2008/Global_GCap.pdf. Back