A little local difficulty

In November, the BBC Trust will make a potentially explosive announcement – explosive that is for rival broadcasters in general and the regional press in particular.

The body that governs the BBC will reveal its provisional conclusions on the Corporation’s ambitious plans to launch up to 60 new local video news services up and down the country – services that will be carried online.

The plan is to roll the service out over four or five years, but the budget is expected to rise to £23 million a year and lead to the hiring of between 250 and 300 video journalists.

To BBC management, it seems like a perfectly natural extension of its public service role and one that will do something about the perception among many licence payers that the Corporation is still a very metropolitan-centric organisation.

To the regional press and commercial radio, both eyeing online video services, the BBC move is an outrageous land-grab which could close off a future stream of revenue before it has had any real chance of establishing itself.

Not since the VAT wars ...

"This issue is extremely keenly felt," explains David Newell, director of the Newspaper Society, the trade body of the regional press. In fact, Newell has to go all the way back to the Thatcher era and the battle against any imposition of VAT on newspapers, to come up with an issue that has so united the industry in opposition.

The reasons are very clear. Just about every media company has had to develop a business strategy which in some way incorporates the web. As traditional business models come under increasing pressure, a growing online presence, including local video news, will be an important way of reaching and keeping audiences in future. Many regional titles, such as the Belfast Telegraph, have already launched their own online television services.

"If the BBC, through leverage of its brand, actually comes in and is perceived to be the new way to get local news and information, it will crowd us out and make it extremely difficult to make that transformation which, from the business case point of view, is the only way we have got to go," insists Newell.

The NS director goes on to make an even more strategic point - that the BBC plans could actually undermine the architecture of the flow of news throughout the UK.

Only local and regional newspapers, he argues, deploy large numbers of journalists on the ground to report both the local scene and the diversity of the UK – much of the rest of the coverage is derivative. If anything were done to upset the economics of such a structure, not even 250 BBC video journalists would be enough to replace it.

Editors and publishers have been queuing up to express their concerns.

Northcliffe Media, the UK’s third largest regional group, in its submission to the Trust’s public value test and Ofcom’s market impact assessment, has accused the BBC of spending millions of public money to duplicate video services already being provided by the local press.

Northcliffe editor, John Meehan of the Hull Daily Mail, which also has its own service, points out that his video journalists have other jobs as well and that, unlike the BBC, he couldn’t afford dedicated video staff.

David Black, Trinity Mirror’s director of digital publishing, is among those arguing there is no need for such a BBC initiative. "As a growing multi-platform media business, Trinity Mirror is already providing consumers with a range of regional, local and hyperlocal products across print and digital platforms," says Black.

Spirit of cooperation?

The BBC has been aware from the outset about the sensitivities of its local television plans and has to some extent tried to respond.

For instance, at the Society of Editor’s conference in Glasgow in November 2006, Mark Thompson, the BBC director general, offered cooperation with the regional press on local television and held out the prospect that the BBC might purchase content from local papers. Indeed, cooperation rather than rivalry is still being emphasised by BBC executives.

Original BBC plans, following a pilot scheme in the West Midlands, were even grander but it rapidly became clear that hopes of delivering local television news by satellite would not be viable – not least because the BBC got a lower than expected licence fee settlement.

The new services will be entirely web-based and, the BBC claims, will be merely local as opposed to "ultra-local" as was originally envisaged.

At the same time, the BBC management insists the development will be funded entirely from internal savings.

Apart from the offer of cooperation, David Holdsworth, deputy controller of BBC English Regions, who drew up the local television plans, has made it clear that limits will be imposed on any new service. No more than ten videos a day can be shown on each site and the agendas will be limited to news, sport, weather and travel avoiding more commercial genres.

The newspaper industry is not on the whole impressed by the BBC’s blandishments and argues that the BBC has been exaggerating the extent to which the industry wants to cooperate.

It is equally unimpressed by the limit on numbers. Neither updates to an existing story, nor sport is included in the limit, publishers believe.

Likewise, BBC offers to make its content freely available to all comers could help create new competition for newspapers from people who want to attract advertisers without the need of investing in journalism.

RadioCentre’s view

Commercial broadcasters, including local radio and Independent Television News, have been equally agitated by the BBC’s plans.

Andrew Harrison, chief executive of the RadioCentre, the trade body for commercial radio, explains that as many as 40% of local radio stations are either unprofitable or only marginally profitable.

According to Harrison, only two things can be done about such a situation. One is to push for further deregulation and the other is to seek new streams of revenue such as local video.

"We have journalists on the ground. They can go around with mobile phones and small digital cameras and start to report. But with the sort of resources that the BBC is talking about, they will make it very difficult for commercial radio to compete," says Harrison.

An average of nearly £400,000 per BBC site a year, combined with the Corporation’s powers of cross-promotion could simply "kill off local stations on the cusp of profitability," he fears.

Harrison feels so strongly about the issue that he is considering the possibility of a formal relationship with other opponents such as the NS – although the relationship will probably stay at the level of informal cooperation.

While the radio executive’s primary target is the new local service, he argues it is part of a pattern of BBC expansion that includes video download services such as the iPlayer and Kangaroo, now under investigation by the Competition Commission.

"There is a massive BBC land-grab going on here that nobody has yet joined up the dots on," says Harrison.

The challenge for the Trust

Over at the NS, Newell accepts that this will be a very difficult decision for the BBC Trust. Apart from anything else, there is an inevitable conflict between public value and market impact tests.

"I think it is a big challenge for the Trust to show that it is the BBC Trust and not just the BBC dressed up in a different way," says Newell, who would have preferred a structure of oversight and regulation for the Corporation that was even more independent than the present one.

"But there is a system in place and we are playing it for real and we just hope that the BBC Trust takes its obligations seriously and doesn’t regard itself as a rubber stamper of the BBC management’s proposals in this area," says Newell.

In particular, the NS executive hopes the Trust will take a wide enough view to consider issues such as who will pay for comprehensive news going forward that reflects the regions and localities of the UK.

How different is the BBC Trust from the Governors they replaced and what does that mean for the outcome of these proposals?

The answer is, the Trust is very different because it has its own staff and the resources to conduct its own independent research. The old BBC Governors, except in the most extreme cases, had little option but to believe what they were told by senior BBC management.

As the Trust approaches its second anniversary, the body has already shown some signs of greater independence.

The Trust was recently sharply critical of BBC network coverage of nations and regions - mainly Scotland, Wales and Northern Ireland.

What has been missing so far is any evidence that the Trust is prepared to close down, or refuse permission for, any significant BBC service.

The only closure of any note was BBC Jam, the online education service and that was largely the result of Brussels opposition.

Despite the immense pressure building up against the BBC local video plan, the likelihood is that the BBC Trust will not issue a blanket ban.

The Trust can be expected to argue that local web video is part of the future of news and that it would appear bizarre to exclude the BBC entirely - particularly when the BBC Trust chairman, Sir Michael Lyons, has made it clear that everyone all over the UK should get the best possible value from their licence fee.

What could easily emerge is further constraints either on speed of development, scale of investment or content.

What is not clear is where precisely the line will be drawn ultimately between public value and market impact.

Whatever happens, there is likely to be a row ... followed by a few weeks for further consultations and submissions before a final decision is published by the BBC Trust by the end of February.