BBC Trust: Local Video Public Value Assessment

Local0B Video

Public1B Value Assessment Organisation Responses

November 2008

Introduction

The BBC Trust is currently conducting a Public Value Test (PVT) into the proposal for Local Video. As part of the PVT process the BBC Trust must examine the public value of the proposal. As part of the Public Value Assessment (PVA) the trust consulted publicly for 42 days.

This document contains the full responses from organisations to the consultation.

Organisation responses in full

The BBC Trust received representations during the public consultation from the following organisations:

Audience Council Northern Ireland Audience Council Wales Barnsley Chronicle BECTU Chris Cherry CN Group Community Media Association Guardian Media Group plc Institute of Welsh Affairs Johnston Press John Rossetti Manx Radio Mediatrust MG Alba Newspaper Society Northcliffe Media NWN Media Ltd PACT RadioCentre Scottish Daily Newspaper Society Scottish Screen Voice of the Listener and the Viewer

Five organisations also responded requesting that their submissions remain confidential.

Audience Council Northern Ireland

AUDIENCE COUNCIL FOR NORTHERN IRELAND (ACNI) INITIAL RESPONSE TO THE BBC TRUST’S PUBLIC VALUE TEST ON THE BBC’S PROPOSAL FOR LOCAL VIDEO

4 AUGUST 2008

The Audience Council for Northern Ireland (ACNI) welcomes the BBC’s proposals for an expansion and enhancement of its on-demand service provision with Local Video.

Council sees Local Video as an enhancement to existing services and additional to plans already in place to improve BBC local service provision [specifically those to bring service provision in Northern Ireland (and Scotland) into line with those in England and Wales].

Council also recognises the potential benefits of more user-generated content, giving communities the opportunity for involvement, with BBC support, in generating local news stories.

Council is supportive of the development of partnerships with community media and the transfer of skills. It is also interested in the syndication of BBC content on external (to BBC) websites, and the potential for BBCNI to support local providers through the development of collaborative and co-operative relationships that are of social and economic benefit to communities in Northern Ireland.

In considering its response to the Local Video proposition Council has drawn on feedback from audiences on services that are reflective of their local community, information derived from Trust unit attendance at the Ofcom MIA in Northern Ireland in July 2008 and from discussions across a number of Council meetings.

While welcoming the proposal in broad terms, at this early stage Council notes that this is a complex proposal with a high significance for the media market throughout the UK. The impact is potentially greater in the Nations and Regions and it is important that due regard is given to the potential market displacement issues that may arise among traditional news providers. Council notes that Northern Ireland, has a relatively strong daily and weekly newspaper market.

Council is concerned about the limitation of this service to those with access to a broadband internet connection. As a result significant numbers of the licence fee population, in excess on 40%, will be automatically excluded from receiving this service because of infrastructural distribution, economic and internet literacy issues. Conversely, those without a licence and who consume media wholly through computer access will not be required to hold a licence to access this service, thus raising the issue of licence fee avoidance. Northern Ireland’s particular geographical and sociological spread would indicate that accessibility difficulties for those groups who may derive a strong benefit and place a high value to this service.

While broadly in favour of this proposal Council believes it is important that the proposal is considered in the context of the current economic conditions and the counter factual position. In addition the proposal needs to be considered with due regard to the ongoing review of Public Service Broadcasting and the potential impact on regional news.

Council anticipates that it will wish to respond on these issues and any arising impact on the local audience on consideration of the publication post-consultation report in the Autumn of 2008.

Question 1

How important is it that the BBC improves its depth and breadth of local news coverage?

Council believes that it is important that the BBC continues to build on its reputation as a leading news broadcaster bringing comprehensive, accurate and impartial news to audiences across all platforms, television, radio and online. Council suggests that there is scope to provide greater depth and breadth of coverage and that Local Video provides a suitable platform to achieve this.

The proposals plan for the expansion of the BBC’s existing local websites on bbc.co.uk, offering the capacity for more in-depth local newsgathering and the local treatment of major events. Council believes that this would be of great benefit to audiences in Northern Ireland and across the UK, in reflecting local and community interests from a local perspective (increasing relevance), and in providing greater choice for audiences (making local news accessible and convenient). Increasing the breadth of coverage addresses issues around the wider representation of all communities, across geographical and cultural boundaries.

Council supports the Local Video initiative as a tangible opportunity for improving the depth and breadth of news.

Question 2

Are the proposals outlined here an effective way for the BBC to improve its coverage of local news and events?

The BBC is established as one of the UK’s leading online services. Council considers that bbc.co.uk provides an effective opportunity for the BBC to further extend and enhance services to local communities.

Broadband uptake in Northern Ireland is currently 52% (Ofcom Communications Market Report, May 2008) with 57% the UK average. Indications of further growth in 2008 are strong.

Council considers that the planned investment in 60 designated areas across the UK will contribute, through an increased understanding of local communities and their issues, to improvements in local service provision.

Question 3

RepresentingU the UK’s nations and regions and communities Portray and celebrate local communities, cater to their needs, stimulate debate on local issues and bring people together for a shared experience.

SustainingU citizenship and civil society Provide independent journalism of a high quality, engage a wide audience in news and current affairs and encourage debate on these subjects.

To what extent do you believe the service, as outlined, will contribute to these public purposes?

Council believes that Local Video, in providing more in-depth local services, may support a greater understanding and connection between communities of interest that are geographically and culturally dispersed. This is important to the wider UK in general and of particular importance to Northern Ireland in a time of political, social and economic change.

Council is particularly conscious of the value that Northern Ireland audiences place on the concept of ‘localness’ and the importance they place on coverage of local news and events.

This issue has come through consistently at all of the audience engagement events hosted by Council over the past year. These events a significant engagement project involving more than 700 young people (aged 11-14 years); a series of outreach events held outside Belfast and a number of key stakeholder events and meetings.

Audiences expressed frustration at a perceived metrocentric focus in reporting and a need for better coverage at local/community levels. Council would highlight in particular the importance of local representation and the portrayal of rural life in Northern Ireland, to young people aged 11-14 yrs.

Council believes that the Local Video proposal has the potential to address issues of representation, enabling communities to portray and celebrate their individuality and uniqueness and to connect as part of a shared experience.

Question 4

How different is the proposal from other internet local news services, which offer video content?

Local Video offers coverage at 60 sites across the UK, with universal accessibility within the UK and availability to non-UK broadband users.

Council notes that content would be available to mobile users and may also be available, in the future, via the BBC iPlayer and/or repurposed and broadcast on linear television.

Question 5

What role should the BBC take in the development of local video news?

The BBC is a leading public service broadcaster of news with an already established significant audience base and an extensive web presence. Council believes the BBC is ideally placed to take a leading role in the development of local video news, bringing value to audiences by extending existing services, making local services more widely available and potentially encouraging the demand and use of broadband in general, and local news services specifically. In addition, Council recognises the potential benefit to other local service providers through the syndication of BBC content and the purchasing of content, by the BBC, from other providers. Local Video, bringing “locally” based services to all broadband users across the UK (and outside the UK), offers great opportunity for the sharing of content and experiences. Council welcomes opportunities for the BBC to work collaboratively and co-operatively with other providers to develop and enhance services to all audiences with the potential to stimulate and grow audience interest in on-demand service provision.

Council supports the opportunity for users to become involved in the reporting of local news and events developing, with the support of the BBC, the requisite skills to generate content.

Council believes this is a very positive development in service provision that supports BBC’s role in raising wider awareness and understanding of digital media and, specifically, in nurturing and supporting local talent.

Question 6

What effect, if any, would the proposal have on your interest in, and consumption of, local news?

Council anticipates that this proposal would have a positive impact on audiences. with improvements in service provision, at a local level, will further encourage audiences’ engagement with the media and confidence in the BBC as a public service broadcaster representative of its needs.

Question 7

In which ways, if any, would the proposal benefit (1) you and your family, (2) your local community, (3) your local area?

Council believes the proposal has a strong and positive social dimension in helping to make services more relevant to audiences across geographical and cultural boundaries in Northern Ireland and the UK, and in providing greater opportunity for the sharing of experiences (at individual, family and community levels) and better mutual understanding.

Question 8

The service as outlined would be available only to those with a broadband internet connection. Is this the best way for local news to reach you and your community?

Council is disappointed that the local video services are only available online and will not be part of a red-button service on Freeview or Freesat.

Question 9

The service, if approved, will cost approximately £23m per year at maturity. As a very approximate guide, BBC News Channel (formerly News 24) costs £42.9m a year whilst BBC Radio Scotland costs £22.6m. To what extent do you think local video represents a good use of the licence fee, both generally and compared with other possible areas for investment?

Council considers that the BBC Local Video proposal represents good value for money as it is an extension of the BBC’s existing network of local websites to enhance services to audiences, making local video content available to broadband users, in perpetuity, within and external to the UK, operating 24hrs a day, seven days a week. It would seem to provide an

6 opportunity to bring value to licence fee payers by increasing relevance, interest and ownership of the BBC.

Question 10

Are there any other issues regarding the public value assessment of local video proposals you would like the Trust to consider?

Council anticipates that Local Video may have a positive impact on local news services with the sharing of BBC content, the building of collaborative relationships with other providers and the sharing of skills (support from trained BBC staff).

However, Council would be interested to understand, in greater depth, the potential impact on the local news environment and awaits Ofcom’s MIA report.

Council is encouraged that BBC seeks to develop appropriate editorial initiatives with local news providers and that user content will be generated, guided by BBC editorial guidelines.

Council also fully supports the syndication of BBC content, subject to BBC syndication guidelines, terms and conditions and linkages with other news sites.

Council is mindful that continuing developments in the provision of local services are guided by appropriate policies to protect the integrity of services to all audiences and the integrity of the BBC as a service provider.

ACNI 4 August 2008

Audience Council Wales

To: The BBC Trust - BBC Local Video Public Value Test Consultation team From Audience Council for Wales Date: July 2008 Re: BBC Local Video Public Value Test Consultation

IntroductionU

The Audience Council for Wales warmly welcomes these proposals and has taken a strong interest in their development, receiving presentations on the proposals three times between October 2007 and July 2008. The Council considers these proposals to be an evolutionary expansion of the Lleol i mi / Where I live services already in operation and an exciting development in the BBC’s local news and information provision.

The Council is keen to stress however, that the broadcasting and mass media context in Wales is substantially different to the situation which exists in some other nations and regions of the UK. In a recent report, Media in Wales: Serving Public Values the Institute for Welsh Affairs concluded that:

“Of the three [Wales, Scotland and Northern Ireland] Wales has the weakest print environment and the weakest commercial radio sector, is the only country where none of its commercial radio stations is indigenously owned, is the only one of the three whose ITV franchise-holder was absorbed into ITV plc, and the country where the BBC is the most dominant in both radio and television. It is also the country that has had the lowest population coverage for the successor digital transmission systems in radio and television (DAB and DTT).”

The Council considers it vital therefore that any assessment of the market takes this situation into consideration.

Question 1. How important is it that the BBC improves its depth and breadth of local news coverage?

This has been a key element of discussion at several of the Council’s outreach events during 2007-08, sometimes articulated as a ‘lack of coverage of our area’ (such as at Old Colwyn) and at other times as an appreciation of the local activity conducted by the BBC (such as at the Audience Council for Wales’s public meeting in Blaenau Ffestiniog in April 2008). Examples are noted below in the quotations from the meetings:

Why does south Wales generally and Cardiff in particular seem to get so much more attention on BBC Wales news than the north? – Old Colwyn ACW meeting, October 2007.

Wales based TV news such as Newyddion and Wales Today were good with the recent 'Your Stories' feature within the Wales Today programme having been popular.- Blaenau Ffestiniog ACW meeting, April 2008

It is also the case that the research commissioned from Rosenblatt by the Audience Council for Wales’ predecessor body, the Broadcasting Council for Wales early in 2006, on BBC Cymru

WalesOnline Services: Usage & Attitude Research also demonstrated the value placed by the audience on local provision:

These were pages with a great emotional connection … the sense of community was really appreciated – as a public service the brand was seen to have a duty in this area but it more than exceeded expectations. It was comprehensive and professional, and achieved a good balance of lighter and heavier stories … it was highly appreciated by users.

Question 2. Are the proposals outlined here an effective way for the BBC to improve its coverage of local news and events?

The Audience Council for Wales cannot imagine a better way at the present time for the BBC to improve its coverage of local news and services, which in Wales would mean the introduction of the 5 new English services and 5 new Welsh services in Wales.

Question 3. The BBC’s role is defined in the Royal Charter by six ‘public purposes’. BBC local video proposals aim to support the following two public purposes:

- Representing the UK's nations regions and communities Portray and celebrate local communities, cater to their needs, stimulate debate on local issues and bring people together for a shared experience.

- Sustaining citizenship and civil society Provide independent journalism of a high quality, engage a wide audience in news and current affairs and encourage debate on these subjects.

To what extent do you believe the service, as outlined, will contribute to these public purposes?

The ACW considers that these BBC Local Video proposals support at least two of the BBC’s Public Purposes - Representing the UK's nations regions and communities, and Sustaining citizenship and civil society. Again, comments by participants at December 2007’s ACW outreach meeting would support the view that the BBC’s support for these Purposes should be strengthened, with those at the meeting commenting:

It was considered that the BBC did less well in delivering the purpose of "representing the UK, its nations, regions and communities". Without prompting participants seated at three of the five tables expressed their perception that BBC Network television news was poor at reflecting the reality of post-devolution UK and the legislative and policy differences which increasingly exist in the different nations of the UK.

The view was also expressed that the BBC could do more to reflect communities within Wales itself.

The Council also considers that the fostering of additional links across and between local communities as outlined in the proposals for a BBC Local Video service would be a wholly welcome development that would contribute positively to sustaining citizenship and civil society.

Question 4. How different is the proposal from other internet local news services, which offer video content?

Taking into account the contemporary news landscape in Wales, Council considers that the introduction of this service would be a hugely positive development, and significantly different in both depth and breadth to the web-based local news services presently on offer in Wales from providers other than the BBC.

Question 5. What role should the BBC take in the development of local video news?

The Council considers the BBC should take a positive role in the development of local video news and welcomes the emphasis within the BBC Local Video PVT proposals on sharing and syndicating material. It welcomes the development of links between the BBC’s local websites and other news sources, as well as of course enabling individual members of the audience to embed material from the BBC in their own websites. The matter of the importance of links was emphasised by participants in December’s ACW outreach meeting, who said that this was an aspect of the BBC’s existing website they warmly welcomed:

The bbc.co.uk website was also viewed enthusiastically and seen as the obvious site to begin any kind of academic, news or hobby-related research. The information on the site was widely trusted and seen as an excellent introduction to subjects. The group highlighted also the usefulness of sidebar links (to other related stories on the bbc.co.uk website) and links to other websites.

The Council also welcomed the proposal to offer training to journalists of other news outlets in Wales to use video cameras, considering this to be a sign of the development of positive partnerships and genuine cooperation, that would build on the many positive partnerships already established between BBC Cymru Wales and local press in Wales as a result of the activity of the Here for You team.

The Council welcomed the emphasis within the proposals that all material produced for use by the BBC Local Video Service would be subject to the BBC’s editorial standards in the same way as all other material produced by the BBC observing that the BBC’s web-pages were already a trusted source of information, with this being articulated both in the Rosenblatt research and in the ACW’s public meeting held in December 2007:

The BBC brand was considered to be highly trustworthy - Rosenblatt BBC Cymru Wales Online Services: Usage & Attitude Research

BBC News had a very high reputation and was trusted more than other TV news services with its impartiality widely recognised as was its quality, accuracy and fairness. – report of the ACW public meeting held in December 2007

Question 6. What effect, if any, would the proposal have on your interest in, and consumption of, local news?

The Council considers that the introduction of the BBC Local video service would encourage interest in and consumption of local news by the BBC’s audiences in Wales. This would particularly be the case if this service were available, in time, on a multi-platform basis – through mobile devices and mobile phones as well as by means of broadband.

Question 7. In which ways, if any, would the proposal benefit (1) you and your family, (2) your local community, (3) your local area?

The Council considered that the introduction of a BBC Local Video service would be a positive evolutionary extension of a service (Lleol i mi / Where I live) that already exists, and is warmly welcomed by members of the BBC’s audiences in Wales who are seeking local information. Again, this was a matter raised during December’s ACW outreach meeting, with participants saying:

The BBC was considered to be good at sourcing and providing local information with the 'Where I live' sites being considered useful if a little lacking in dynamism. The local information provided by Radio Wales - in the context of traffic and weather reports - was also highly praised and considered to be required listening for this reason alone for some participants.

Question 8. The service as outlined would be available only to those with a broadband internet connection. Is this the best way for local news to reach you and your community?

Broadband availability is increasing in Wales with 98% of the population now able to access a broadband service, though penetration remains significantly lower. The Council considers therefore that a move to multi-platform availability and particularly provision through mobile devices would be a positive development for the service in due course.

* these are not services directly comparable with the proposal (of 65 Local Video services across the UK) and are not calculated on a like-for-like basis.

The Council considers that this service, if approved, would provide good value for money to audiences in Wales both in terms of the output provided, but also by means of further fostering links with those in Wales who pay the TV licence fee.

Question 10. Are there any other issues regarding the public value assessment of local video proposals you would like the Trust to consider?

For the reasons outlined above, the Audience Council for Wales urges the BBC Trust to remain acutely aware that the media landscape in Wales is significantly different to the situation in many other parts of the UK and that consequently a ‘one size fits all’ approach should be avoided in evaluating these proposals.

Barnsley Chronicle

NCJH/AMK 6 August 2008

OFCOM Riverside House Southwark Bridge Road London SE1 9HA

Dear Sirs

BBC Local

The BBC enjoys a privileged position in our commercial environment. They exist on a stable publicly funded income and do not have the constraints of a commercial organisation, nor are they subject to the fluctuations in the markets. Surely the regulatory authorities need to protect commercial organisations from being weakened by the BBC’s activities.

The whole world of the internet and its impact on life is changing rapidly. What we have today and what we have in, say, 5 or 10 years time, are probably going to be poles apart. Local newspapers are meeting the challenge of this new medium creatively and enthusiastically, but in the face of competition from such a body as the BBC, it is likely to damage the prospects for locally run web sites. The BBC is one of the top brands in the country. It has huge potential to cross-promote and will be an easy first-click port of call. Audiences will be split, advertising potential based on audiences will be affected, and so commercial damage will be done to these new and developing commercially backed web sites.

Promised restrictions and promised limited number of centres are surely merely the thin end of the wedge. When these are established in a few years time, there will be another application to remove such restrictions.

The BBC, with their web operations, must be one of the biggest web operators in the country; again, given time and their present empire building, they will grow into a more dominant position. Is this really a good thing in, say, 15 or 20 years time? Do we not want variety, plurality and the opportunity for commercial enterprise rather than a state funded monopoly?

The Barnsley Chronicle is the third largest weekly newspaper in the country with a circulation of 43,385. Our circulation in the last five years has been the highest in the history of the Company and there has been no significant change in the population statistics in this time. We have an editorial staff of twenty-two. Web services are comparatively small at the present time but investment in our web development continues. All stories are eligible for the website. We have cameras, we are doing training and carry very limited videos at the present time. It is difficult to demonstrate what might or might not be the effect of future developments, other than the simple truth that audiences generate their own advertising potential. If our future audience is restricted by non-commercial competition, so will be our ability to maintain our staffing levels and our depth of coverage. It will not be the ‘big’ stories that suffer but the smaller bits and pieces that are so important to any community.

Yours faithfully

Sir Nicholas Hewitt Bt Chairman and Managing Director

Copy: BBC Trust, 35 Marylebone High Street, London W1U 4AA.

BECTU

BBC TRUST PUBLIC VALUE TEST CONSULTATION ON bbclocal VIDEO PROPOSAL

BECTU is the trade union for workers in the audiovisual and live entertainment sectors. It is the biggest union representing workers in the BBC, and a significant number of our members work in the Nations and English Regions. BBC staff have been hit hard over recent years by waves of redundancies through first Value for Money and now Creative Futures. The promise of hundreds more jobs being created in Nations & Regions through the video expansion of bbclocal is therefore a massive boost for our membership, and for the BBC outside London. We therefore welcome the BBC Trust Public Value Test, and are delighted to submit our considerations.

Question 1. How important is it that the BBC improves its depth and breadth of local news coverage?

BECTU believes that the future success of the BBC’s regional television and local radio stations depends on the development of the service into local news video on the Where I Live websites; already only the BBC provides local radio which is speech- based and with specialised, localised news teams gathering and disseminating news; as ITV moves ever further from its regional roots, only the BBC remains committed to regional news, features and political coverage; and it is a natural extension of this commitment to the whole of the UK that the bbclocal project should be viewed. Not an easy add-on, but a whole-hearted bid to provide a new, exciting and current local video service alongside the impressive online coverage already available.

Question 2. Are the proposals outlined here an effective way for the BBC to improve its coverage of local news and events?

We think that the BBC is attempting to provide a quality service but is doing so in the light of a poor license fee settlement, and a general battening down of the financial hatches. The Value for Money cuts took thousands of jobs out of service, Creative Futures is taking another 2500; the promise of the extra jobs required for bbclocal is naturally therefore a major incentive for the trade unions.

However our support is not unconditional. Negotiations have not yet begun on what type or grade of jobs they would be, although ER Controller Andy Griffee signalled in Ariel recently that he expects them to be graded below those which were used to staff the West Midlands pilot project. BECTU is concerned on two fronts about the staffing issues: firstly that they will be employed at low grades and salaries and therefore not be the adequate redeployment opportunities we were promised they would be by Mark Thompson at the launch of Creative Futures; and secondly that they will be too heavily reliant on multi-skilling across all three platforms. We simply believe it is unrealistic to expect one person, however highly motivated, to become competent in skills as diverse as shooting and editing, journalism, and online production. We will be asking for opportunities amongst the new jobs for people from all backgrounds – technical, journalistic and online – and expecting the BBC to train them adequately into further skills to enable a properly skilled and resourced staff to be created for each of the named 65 sites (i.e. 60 sites with an additional 5 Welsh language services in Wales) for bbclocal. Only by creating such a team can the BBC’s intention of improving its local coverage be achieved; only in this way can opportunities for redeployment for more experienced staff threatened with redundancy be created.

Question 3. The BBC’s role is defined in the Royal Charter by six ‘public purposes’. BBC local video proposals aim to support the following two public purposes:

The increasingly narrow news-driven agenda of the BBC has been felt especially strongly in regional programming. The breadth of coverage provided until the 1990s – when the stated intention of regional tv was to represent to itself and the nation the full life of a region, its people and culture – has been lost, and we are left with an entirely news and current affairs agenda – both the news programmes themselves, and the Inside Out and Politics Show strands. To rectify this situation, it is unrealistic to expect a return to the depth of documentary making of the past, for both staff and cost reasons, but increasing the coverage of the range of people, life and cultural activity through bbclocal is an achievable target, and would we believe deliver the greater depth of coverage demanded by our viewers.

The service will also help close the BBC’s performance gap regarding its community role – 20% of local video will focus on local politics and public policy issues – the pilot found that the majority of users agreed that it had raised their awareness of the key political issues in their communities.

Sustaining citizenship and civil society Provide independent journalism of a high quality, engage a wide audience in news and current affairs and encourage debate on these subjects.

The BBC is famously committed in all its statements to “independent journalism of a high quality”; however we believe that many of its recent actions make this harder and harder to achieve. Sustained and vicious job cuts in news teams and resources, amongst skilled editors, camera people, crews, journalists and support staff, with no commensurate loss of broadcasting time, have put increasing pressures on the staff remaining. Eventually those pressures tell and are seen in onscreen quality and veracity, through lack of preparation time, lack of research, dependence on outside news sources (press releases and newspapers) and inadequate skills training amongst new staff. We would re-emphasise our opening points, that only if the teams are staffed with skilled and trained people from across the skills spectrum and from a wide background, and properly remunerated to recruit good people, can those aims be achieved.

Engagement with audiences in the direct manner the BBC wants from bbclocal is far from easy; it is beyond anything attempted on the tv news programmes, and even beyond the “phone-in” experience of local radio. Specific training will be essential, good lead-in times and high quality motivated staff needed. Encouraging debate cannot mean just the parroting of emails we see on so many daytime programmes – debate must be formed and guided unless its to be no more than another uncontrolled blog, and to do that will require broadcasters and technicians with very high skills, both technically and in dealing with people. This is why we will be arguing for the recruitment of a range of staff, to include experienced broadcasters, to deliver a very ambitious prospectus. It will need energetic and ambitious young recruits – but they will need some older heads alongside too.

Question 4: To what extent do you believe the service, as outlined, will contribute to these public purposes?

With the provisos stated above, we have no doubt that the BBC will deliver its intentions, and that bbclocal will be an invaluable addition to the BBC’s services for its public. Similar doubts were widely expressed when the BBC launched so energetically into the online world; and while the BBC sites have become the most accessed in the world, there is no evidence that is has harmed the commercial online offerings of either other broadcasters or news agencies; rather, it stimulates a wider interest amongst the public and increased necessity for others organisations to provide a competitive quality on their sites. We believe that the same would happen with local video news.

Question 5. What role should the BBC take in the development of local video news?

The BBC should lead the way in the development of local video news. It is the only organisation with the background, staff, experience and quality to do so effectively; it is also the only one funded publicly and should be using the License Fee to add considerably to its online offerings, and those for its viewers across the Nations & Regions. Links with the existing tv news and local radio news programmes will provide synergy, opportunities for wider dissemination of gathered material, and excellent developmental opportunities for members of staff to move across the BBC’s television, radio and online services. It is this fluidity, and the resultant range of experiences of BBC staff, which helps the BBC develop some of the best broadcasters and skilled workers in the industry.

Question 6. What effect, if any, would the proposal have on your interest in, and consumption of, local news?

We believe that there should be as wide a dissemination of news amongst the nation as can be provided by technology; some people will chose to access it through television and radio on analogue or digital transmissions; some through internet and broadband access. Individuals will continue to choose their favourite means of access, and while the provision of bbclocal would be an extra dimension to this, many people will continue to get their news from newspapers – which they may choose to fetch from their local shop, have delivered to their door, or even read on PCs or mobile phones. We must not make the error of mistaking delivery for content – people will always look for the content which best suits their needs, beliefs and cultural aspirations; how they access it is an entirely different matter and we should not be in the business of telling them which means they can and cannot use.

Question 7. In which ways, if any, would the proposal benefit (1) you and your family, (2) your local community, (3) your local area?

BECTU firmly believes that any extra coverage of regional and local culture, news and events would be valuable. Local communities have shown through their engagement with local radio – and more recently with debates run online alongside Politics Show issues - that they are extremely keen on accessing broadcasting for their views and news, and this can only increase through additional opportunities. We have reservations about how this increased access would be monitored for both litigious and quality reasons, but those are issues which should be debated separately and not be used to undermine the essential nature of the proposal. There are concerns that by its very nature, only the most vocal and determined (not necessarily the most representative voices) would be heard, but preventing that is another reason for the recruitment of experienced staff with sound judgement in content and delivery.

The possibility of streaming key local events live on these sites – and through the newly developed iCav vehicles now being developed by the BBC – is a vital new ingredient for increasing involvement, access and interest.

Question 8. The service as outlined would be available only to those with a broadband internet connection. Is this the best way for local news to reach you and your community?

The BBC clearly has a duty to provide services to and for the whole country; for technical reasons this may be a duty which can only be delivered over time and not in one fell swoop. We believe the BBC should commit to doing everything in its power to increase access to bbclocal to as near 100% as it can; but the inability to do so at outset should not kill the whole project. Set alongside the BBC regional and local services currently available through a variety of media – analogue, digital, satellite, cable, online, mobile phones etc – it is an impressive catalogue of offerings for the British License Fee-payers, who will unerringly choose to use whichever means suits them best – and complain loudly until anything they can’t receive is made available!

The projections are for a reach of 11% of households (17% of those with broadband); that is 1 million more people than the entire current BBC local multimedia offer, and more than the projected nations/regions tv bulletins in 5 years. This is by no means an insignificant number!

* these are not services directly comparable with the proposal (of 65 Local Video services across the UK) and are not calculated on a like-for-like basis.

The cost of a service is always a thorny topic – the value of it even more so. The BBC News channel was viciously attacked on its formation, but has become an essential part of the BBC’s newsgathering operation, a valuable way of showing extended coverage of films and reports which are truncated by the very nature of the limited bulletin durations, and the prime way in which breaking stories can be covered instantaneously and constantly without shattering the schedules of other channels. BBC Radio Scotland provides an exemplary and highly praised community service. bbclocal will undoubtedly have teething troubles; there will undoubtedly be difficult negotiations about staffing levels, grades of pay, skill training and many other things – but we will make those negotiations succeed because the unions and the management

18 of ER share the knowledge that without this way forward, there is only retrenchment and ultimately erosion of our vital national/regional and local services.

It is entirely possible that £23million is too low a figure, a figure trimmed to make it more acceptable for the BBC to say “yes”. But we believe it would be a huge error to try and achieve this project on the cheap. It will be too difficult a mission to get it right while cutting financial corners. The Trust should not be asking “Why so much?” but rather “Are you saying it’s enough to do it properly?”

There is public support too – people saw benefits as consumers (89%) but even more as citizens concerning local democracy, when 96% were in favour, and it was valued more highly than the News Channel (formerly News 24), BBC local and national radio.

Question 10. Are there any other issues regarding the public value assessment of local video proposals you would like the Trust to consider?

Other issues BECTU believe are pertinent –

• The service will be free at the point of use, and carry no advertising so there is no threat of stealing advertising revenue from commercial stations; the BBC is also committed to not carrying travel and traffic news in video, and where appropriate will link to external sites including commercial news providers

• The extra service will encourage more user participation through better navigation, cross-trailing and being more map-based; there are currently around 100 user generated content (ugc) pieces on the sites, which should increase to 300.

• The provision will bring services for Scotland and Northern Ireland into line with England and Wales, which is absolutely necessary

• Content syndication will mean that commercial and not-for-profit sites can supplement their coverage – any loss of traffic to competitor sites will be mitigated by some increased traffic via BBC; and a budget of £800k a year will be available for purchasing local video news from local providers which will stimulate provision in a difficult area/market

• There will be excellent partnership opportunities with other providers and organisations like The Community Channel and the Community Media Association.

Mark Scrimshaw Helen Ryan

Chair BBC Division Supervisory Official

BECTU BECTU

July 25, 2008

Chris Cherry

The idea of LocalVideo is in essence a good one. I live in Bridport, West Dorset, this is between three main broadcasting centres, Plymouth, Bristol and Southampton and consequently gets little mention other than as a footnote on either radio or television.. Without a dedicated radio station local news, the weather and even travel conditions are barely eluded to by the Big Three radio programmes. Television coverage of local events in the area is equally badly served while Ceefax (from Plymouth) ignores anything west of Devon yet manages to have 2 (multi) pages of news dedicated to the Channel Islands. Mind you, come the Olympics and that will change for a few brief weeks when this part of Dorset becomes one of the centres of media attention. Therefore the idea of a Local Video, run by local people for local people will be a step in correcting this omission and even while it will not be available through a television set this is going in the right direction.

Chris Cherry

CN Group

Robin Burgess Direct Line: 01228 612288 Email: [email protected] RLFB/JS

21 August 2008

Bronwen Roscoe BBC Trust Room 211 35 Marylebone High Street London W1U 4AA

Dear

CN Group is an independent local multi media publishing company based in Carlisle. Its history is based on newspaper publishing in Cumbria, however it has evolved a multi media strategy which started with our involvement with Border Television in the 50’s/60’s. Since then we have expanded in radio, with stations in Northern Ireland, Cumbria, Lancashire and the Midlands. In more recent times we have developed substantial web sites covering the areas of both our newspapers and radio stations.

You will not be surprised to know that in the present situation I’m appalled that the BBC is intending to increase its local web presence, particularly with the use of more local video. We have to fund our digital presence in the commercial market place. To achieve this we have to be able to prove and then sell to advertisers, sponsors, etc, an audience. To have the BBC expand in this area using the licence fee and therefore not needing to recover its costs in the market place is extremely dangerous to the fabric of local community life.

At the moment the BBC plays an important part in the local media landscape. It provides regional/local TV news output and speech based local radio, both could be argued areas that it would be unlikely any commercial organisation would step into (ITV might argue differently, although they are trying to withdraw/downgrade local news on Border TV as they say it isn’t commercially viable to provide it).

However, the web is completely different, we are expanding in this area and, provided our audience isn’t ‘snatched’ from us by unfair competition from the BBC, expect to provide a long term service of local news, information, entertainment to our customers. There are also plenty of other local community sites also competing for audiences but without statutory funding.

It would be sad and catastrophic if the BBC with its Public Service ethos was allowed to jeopardise 193 years of service to the community in Cumbria by putting at severe risk the financial stability of that service.

If you would like to discuss this further or want to review the situation in Cumbria in more detail please do not hesitate to contact me.

I recommend that both Ofcom and the BBC Trust refuse permission for this project to continue. It is not needed, would produce an unfair market and would jeopardise the fabric of local community life.

Yours sincerely

Robin Burgess Chief Executive

Community Media Association

BBC Local Public Value Test

Response from the Community Media Association

The Community Media Association (CMA) is the UK representative body for the community media sector. It supports and represents community based radio stations, local and community TV operators and community based internet groups. The CMA has been instrumental in the development and recognition of the community radio sector and represents the needs of both full time community radio licensed stations and RSL holders, and also works with community television and other small local television operators as part of United for Local Television.

Q1 How important is it that the BBC improves its depth and breadth of local news coverage?

BBC local radio and the old Where I Live sites have provided a certain level of local news, particularly in the metropolitan areas. However, on the now so-called BBC Local sites (having replaced the Where I Live theme), if you were to type in Doncaster today, all the main headlines would relate to Sheffield, more than 20 miles away. The CMA is unclear whether the BBC should be trying to get more ultra local, or facilitating other organisations with a better grasp of true localness to do it for themselves.

Q2 Are the proposal outlined here an effective way for the BBC to improve its coverage of local news and events?

No. The CMA is unclear as to how this service would be more local or more in depth than current BBC local radio and the existing BBC Local sites, other than there would also be moving pictures. Ten news stories a day for, for example, the whole of South Yorkshire, would hardly provide truly local content on an ongoing basis for the four cities (one of them the fourth largest in England) and all the surrounding smaller towns and villages each with their own sense of place and identity.

Q3 To what extent do you believe the service as offered will contribute to the BBC’s public purposes?

• SustainingH citizenship and civil society H – we consider this service would to some extent contribute to this purpose, provided that the BBC worked in real partnership, including financial dealings, with local people and community media projects and other local news and content providers

• PromotingH education and learning H - unclear

• StimulatingH creativity and cultural excellence H - unclear

• RepresentingH the UK, its nations, regions and communities H – unclear unless ultra local, in which case the proposed geographic areas are too big and the projected funding too small.

• BringingH the UK to the world and the world to the UK H - unclear

• DeliveringH to the public the benefit of emerging communications technologies and

services H - unclear

Q4 How different is the proposal from other internet local news services which offer video content?

It is hard to see how this proposal is very different from other internet local news services. Many of the local and regional newspaper groups are already developing this kind of content and want to develop further, also local commercial radio stations. The small local and community television operators in the UK already do this, both on the airwaves and online. Many community radio stations are also developing “quick video” community content for their internet presence, or have aspirations to do so.

For all of these sectors there is potential harm in these proposals in terms of their future business models. While there may not yet be wide access to truly local television, should the enabling of that sector happen, these proposals would seriously damage the future viability of such services, particularly those reliant on online sponsorship and advertising.

Q5 What role should the BBC take in the development of local video news?

The BBC should use its £23 million to set up a local and community commissioning fund, so that local people can do it for themselves.

Q6 What effect, if any, would the proposal have on your interest in and consumption of local news?

None. I already use the BBC website when I need to and the addition of video clips would not make any difference to that. Also, it is difficult to see just how local the stories would be – if I want really local news now, I go to the local newspaper site or my local community radio station, which are better at it.

In terms of the community media sector, it is already a provider of micro local news stories, which rarely make it out into mainstream media. However, that is some of what people in those communities want. It is difficult to see how, on the amount of money proposed for this project, it would make any difference for communities which already feel marginalised and excluded from mainstream media, including the BBC.

Q7 In which ways if any would the proposal benefit (1) your family, (2) your local community, (3) your local area?

Family – the PC is not a great thing to sit around as a family, so it would make very little or no difference. Local community – see Q6. Local area – see Q6.

Q8 The service as outlined would only be available to those with a broadband connection. Is this the best way for local news to reach your local community?

No. The proposal is hardly a universal service. It would not necessarily even be available to all broadband users, due to the lack of universally available TV/video quality broadband currently in the UK, particularly outside of the urban areas. The digital divide is still growing, particularly for people in areas of multiple deprivation. These proposals would do nothing enhance those communities’ inclusion in and access to local news.

Q9 The service if approved would cost approximately £23 million a year at maturity. To what extent do you think that local video represents a good use of the licence fee, both generally and compared with other possible uses for investment?

Not a good use of the licence fee – there are other ways to improve local news provision, for example by enabling and funding local public service television or using the £23 million to commission locally produced content chosen for relevance by the communities involved. Without evidence of other possible uses for investment it is difficult to comment further.

Q10 Are there any other issues regarding the public value assessment of local video proposals you would like the Trust to consider?

The Community Media Association welcomes and is proud of the Memorandum of Understanding the BBC has with the sector. We also note the inclusion of the CMA and others as potential partners to improve digital media literacy.

However, we are concerned that the £800,000 for sourcing locally produced video news is paltry when spread across the UK ( c £12,000 per area) and it is unclear in the proposals whether our inclusion means that the BBC has true partnership in mind (i.e. including some financial relationship).

Overall, we cannot support the proposal.

However we have several observations to make should the proposal go ahead. Firstly, the “Community Producer” Job Description should include an absolute and primary requirement to build effective partnerships with the community media organisations in their area (including the local communities as part of the assessment process when judging effectiveness). Secondly that these practitioners and the CMA need to be funded to deliver the practical hands on media training, content production and media literacy ( the CMA has a track record in delivering UK wide media literacy training) and community based participatory programming.

Finally, we cannot see how the proposals make much difference to current provision – as one of our members put it, BBC local radio with moving pictures!

CONFIDENTIALITY

We are happy for our response to be made public in its entirety.

Jaqui Devereux

Community Media Association

Based in England but representing members throughout the UK

4 August 2008

Guardian Media Group plc

Response to the BBC Trust’s Public Value Assessment of BBC Local

1. EXECUTIVE SUMMARY GMG is responding to the BBC Trust’s consultation regarding the Public Value Assessment of BBC Management’s proposed new service launch of video on BBC Local sites. As a Trust-owned commercial group with many businesses operating in local print, radio, TV and online markets, GMG is uniquely placed to provide a holistic assessment of the BBC’s plans. We would be very happy to provide the BBC Trust with any further evidence it requires. One paragraph marked in the document provides commercially sensitive data which we ask you to redact as indicated. We respond to the Trust’s specific questions below. In summary our conclusions are as follows: • We have seen no evidence to suggest that the proposed services are the most appropriate response to the purpose vs performance gap identified by the BBC Trust in respect to the BBC’s support of local communities. • Further, we believe that the BBC may be attempting to use the Trust’s identification of a gap as a means of justifying a partially adapted version of a previously rejected proposal – very different to proposing the best solution to the BBC Trust’s perceived problem. • The proposed service is not distinctive when compared to current offerings in most metropolitan areas and will not be distinctive in the wider geographic market by 2012/13. • The launch of the proposed service will have a negative and severe impact on the market, reducing both innovation and plurality in respect to services offered by commercial providers. • The effects on commercial providers will be even more damaging at this time given that it will discourage local commercial media companies from investing in new and fragile business models during a period where our businesses are affected by the forces both of structural change and a cyclical advertising downturn. • The beneficial initiatives, or remedies, suggested by the BBC will either be actively harmful, or do not depend on the launch of BBC Local video. • We therefore suggest that the BBC’s plans be halted. They could be reconsidered, perhaps in five years’ time, in the light of a more stable commercial environment, by which time we expect the commercial sector to have made substantial investments in local online video.

2. RESPONSE TO SPECIFIC QUESTIONS

Question 1. How important is it that the BBC improves its depth and breadth of local news coverage? Guardian Media Group and all of our constituent businesses believe in the importance of the BBC, as a national broadcasting entity delivering great public service broadcasting. We also fundamentally believe in the importance of local news and journalism, bringing content and voice to communities around the UK. The BBC Trust has identified, through its research, a gap between the public’s assessment of the importance that they place on the BBC’s roles in both catering for and supporting communities versus their satisfaction with the BBC’s performance in these areas. It should be noted that: 1. A low level of performance from the BBC may result from the fact other providers are providing this content already to sufficient standard. 2. We see no indication from this research that this dissatisfaction is caused by an undersupply of either news or sport content (the mainstay of the BBC’s proposed local video service) versus other types of content and service – why is local news and sport video the correct response to the Trust’s identified dissatisfaction? 3. We see no evidence that the problem pertains to the provision of content on a specific platform – broadcast, online or other platforms. As such we question whether further online investment is the correct response. We leave it to the Trust and the public to establish whether the BBC is under- performing against its expectations, but make the following general observations: • The question of importance needs to be considered in the context of the effect that any expansion by the BBC will have on commercial providers and hence on all services that are available to local communities. • As commercial providers continue to invest in services across media to serve local communities, we would expect the importance placed by the public on the BBC to provide these services to diminish. The local newspaper and radio industries are committed to further investment in online, particularly video, with the quality and breadth of these services developing rapidly. The reason that all sites are not at this level today is that we do not yet see proven consumer need across all areas of the UK – commercial media businesses will in most cases only invest when demand is proven. 1 • As we are reminded by Sir Michael Lyons and Professor Roger LaughtonF F, the BBC should only seek to fill any gap such as it exists in a way that is truly distinctive. It should not seek to compete for competition’s sake. • There are multiple demands on the licence fee – all questions of importance need to be judged against other public service priorities.

1 November 1 2007 Fleming Lecture and Laughton Report, November 2006

Question 2. Are the proposals outlined here an effective way for the BBC to improve its coverage of local news and events? In our view, this is the critical question. We understand that the BBC’s plans for local video have not been specifically designed to answer the BBC Trust’s perceived problem. Instead, the plan for BBC Local is essentially an adaptation of the BBC’s previous plans for ultra-local broadcast services. We believe that these plans are not effective in three respects:

1.U BBC is already providing local services online a. Firstly, the BBC is already operating a suite of 60 local websites, covering not just the common areas of news, sport and weather but stretching into 2 unsigned bandsF F, holiday and travel advice, music reviews, event notifications and celebrity interviews. BBC online spent £110m last year (including overspend), a proportion of which already funds this suite of local sites. b. The BBC’s own Human Capital authored work shows that leading commercial sites (such as Channel M and manchestereveningnews.co.uk) are already delivering services comparable to those being planned by the BBC in 2012/13. Our own plans for our younger sites, such as those in Surrey and Berkshire, see comparable services rolled out before 2012/13.

2.U The BBC plans would have a severe impact on the market and on plurality By way of comparison, our annual spend on our entire regional online operation across Manchester and Surrey/Berkshire is []. It is clear that the BBC spending £23m per year for video on a website, in addition to a proportion of the total 2007 online spend of £110m, will be effective only in damaging existing and future commercial initiatives. Our submission to Ofcom around the market impact of the BBC’s proposed investment explains this in great detail. In brief, we believe that the investment will result in a fundamental reappraisal of many of our new media initiatives, rendering many of our planned initiatives uneconomical.

3.U We question whether the plans would represent value for money Our understanding of BBC Management’s paper on the proposal is that it suggests the benefits derived from video will be c. 7X the costs (the “value yield”). We will not question costs, since we have no detail available. However, we question the value delivered to society on grounds of evidence and calculation. Firstly, as previously mentioned, we do not yet see evidence that there is an under- provision of local video content online.

2 http://www.bbc.co.uk//introducing/Manchester

Secondly, the approach that both the Laughton report and BBC Management use to attribute a value delivered per person will almost certainly deliver a high value, and, in particular, a value greater than the associated cost. • Asking consumers about their willingness to pay for a good or service systematically overestimates the amount they would pay in reality – any market researcher, marketer or start consultant knows this. When faced with parting with actual cash, results differ greatly. • As years of internet experience have shown, getting consumers to actually pay for online content is very difficult. Since ad-funded content is the common model, £160m of advertising would be required to mimic the consumer willingness to pay in the BBC’s analysis. Our calculations suggest this is c. 6X the size of the total regional press online display market today, including both video and all normal banner/buttons etc.

Question 3. The BBC’s role is defined in the Royal Charter by six ‘public purposes’ […] to what extent do you believe the service, as outlined, will contribute to these public purposes? As per our response to the Second PSB Review, we are strongly supportive of the BBC’s public service role, especially as it delivers a broadcast remedy to market under-provision of certain genres. This does not extend to the BBC’s commercial activities or its investment online which we believe are crowding out private investment and stifling competition. Specifically in response to this question, BBC Management state that the local video proposals aim to support the following two public purposes: 1. Representing the UK's nations, regions and communities. 2. Sustaining citizenship and civil society – provide independent journalism of a high quality, engage a wide audience in news and current affairs and encourage debate on these subjects. Both purposes are interpreted by authors in a variety of ways. For the sake of clarity in our response, we are defining these as follows: 1. Representing the UK's nations regions and communities. a. Providing information on local communities – “Portray and celebrate 3 local communities…”F b. Providing information for local communities – “…local communities, cater to their needs, stimulate debate on local issues and bring people 4 together for a shared experience”F 2. Sustaining citizenship and civil society – provide independent journalism of a high quality, engage a wide audience in news and current affairs and encourage debate on these subjects. a. “To build a greater understanding of how the UK is governed at a local 5 level and facilitate engagement in the democratic process”F b. “Provide independent journalism of a high quality, engage a wide audience in news and current affairs and encourage debate on these 6 subjects” F

3 BBC Trust consultation questions 4 BBC Trust consultation questions 5 BBC management’s assessment of the public value of its Local Value proposals, page 18

We consider these four purposes in turn:

1a:U Representing the UK's nations, regions and communities – providing information on local communities The content quotas imposed by Ofcom on the BBC and the other PSBs ensure that a certain proportion of content is produced in the regions. Further broadcasting obligations on PSBs ensure that the viewer is educated on all communities present within the UK. In an online context, the long-tail argument implies that very small communities can be economically served online. Figure 1 illustrates just some of the sites serving the Manchester community – our high level review identified over 75 sites serving the local community. This evidence suggests there is no market failure in the provision of content in Manchester.

1b:U Representing the UK's nations, regions and communities – providing information for local communities We question strongly the notion that there is market failure in the provision of news and content for local communities online – public purposes are being more than adequately supported by existing players online: • BBC Management’s Human Capital paper illustrates that leading local press sites (such as Channel M and manchestereveningnews.co.uk) are already producing a comparable volume and quality to what the BBC is proposing by 2012/13. • Further, in other less developed regions today, we know present provision will increase in both quantity and quality in the four years before the BBC is up to scale. Our own plans for the Surrey and Berkshire region illustrate this point. All of our services in this region are in a fledgling state, and success will depend on sustained investment as well as retraining and equipping our newsrooms for more video output. The move to video is a gradual one. Our fear is that the BBC’s quality, volume and general investment will be of such a high level from the outset that we will find it impossible to catch up. On a quantitative level, financial success depends entirely on attracting the highest possible percentage of the local audience to the site. Losing audience to the BBC’s new offering in traffic will have a direct impact on this fledgling revenue stream and therefore reduce future willingness to invest and innovate.

6 BBC Trust consultation questions

2a: Sustaining citizenship and civil society – building knowledge of and engagement in local democracy Again, as above, Human Capital’s paper illustrates the range of content genres covered by the proposed service is no different to that on MEN’s site or Channel M, both of which carry substantial quantities of local democracy-related stories.

2b:U Sustaining citizenship and civil society – engaging an audience and encouraging debate Firstly, we believe that our audiences are engaged, since they return time and time again to our services. Further we actively encourage debate across our viewer/listener/reader base through mechanisms such as: • Print – letters to the editor • Radio – phone ins and debate shows • TV – interviews with local residents, chat and debate shows • Online – UGC upload service

Question 4. How different is the proposal from other internet local news services, which offer video content? We agree with many commentators that it is crucial for the BBC to demonstrate distinctiveness when launching new services. We draw attention to three quotations, one from Sir Michael Lyons and two from Professor Roger Laughton: “...the Trust is very clear that in making decisions about investments in technology, the public interest is also served by avoiding damage to the investment and services of other suppliers which help to meet the public desire for choice. We will simply not allow the BBC to act in an anti-competitive way or in a manner that stifles enterprise 7 and innovation outside the BBCF F” – Lyons “…to justify any new investment in local television and video services, distinctiveness must be a key ingredient of the case the BBC puts forward. The BBC is not just creating added public value; it must seek to add value that cannot be provided by 8 anyone else.F F” – Laughton “The BBC would need to identify no-go areas as well as the areas where it can create unique public value. Critics fear ‘mission creep’. The BBC’s local services should ‘complement the private sector’”8 – Laughton The BBC Trust found last year that many services on the broader bbc.co.uk site were not distinctive in their nature. We are absolutely convinced that the BBC’s proposed services are another non-distinct service; they are not distinct when compared to leading regional press sites today, nor to what the remaining sites will become by 2012/13. We also believe that, were the existing BBC Local sites to be subjected to similar PVTs, they would also fail. We will consider these in reverse order, since we believe that video is simply an addition to existing sites and that the two should be considered in tandem.

7 November 1 2007 Fleming Lecture 8 Laughton Report, November 2006

BBCU Local’s existing sites In many areas, the existing BBC Local sites are not distinctive, and questions should be raised as to whether they are therefore an appropriate use of the licence fee. Figure 1 below illustrates just a subset of players competing with the elements of the BBC’s present online offering in Manchester (in light blue). We strongly challenge whether any of the present elements are underprovided by the commercial market or whether the BBC’s offering is in any way distinct. BRMB’s research produced for BBC Management concludes: “…almost 9 in 10 use commercial media to obtain the sort of information that would 9 be available through the BBC Local serviceF F” – BMRB

Figure 1 – GMG understanding of selected competitors to BBC’s online offering in Manchester

b N V

u e i w l d l e e

t o i n -

s s N rie e to w -s s o de Vi

Video-live Sport streams r the ) UG a ic e ff C W a r Music/Events Entertainment (T C l o L e m o v c ra m a T u l n i ty

Blog Manchester

Manchester2002 history

Our analysis of our own manchestereveningnews.co.uk site suggests that over [] of page impressions on our sites are in areas that are directly mirrored by BBC Local offerings, i.e. news and sport.

NewU site The proposed local video service, in combination with what exists today via bbc.co.uk, would not provide a distinctive service to that being offered currently in

9 BRMB report 2008 – BBC Local Video service

Manchester. It would in fact be inferior. Nor would it offer a distinctive service with respect to planned services in Surrey & Berkshire. BBC Management, using Human Capital, produced a paper on distinctiveness. We find its conclusions opaque and believe that much of the content in the body of the document neither ties into the executive summary nor the conclusion. The paper uses seven criteria around which to judge distinctiveness and concludes, inter alia, that the proposed service is not distinctive when compared with broadcaster or advanced local press sites (eg manchestereveningnews.co.uk) today. It says it is distinctive when compared to certain less developed press sites today, but rightly concludes that in four years’ time these sites will have evolved. We agree with Human Capital’s conclusions as detailed below:

a. Quantity: higher quantity than young newspaper sites butU not than developed 10 news sites (such as manchestereveningnews.co.ukF F) and not when 11 compared to broadcasters’ sitesF F. U The only difference vs broadcasters is the BBC plans to spend new money to create content vs broadcasters repurposing content.

b. Production values: notU a source of distinctiveness when compared to the 12 press in the future nor when compared to broadcasters todayF F. c. Editorial approach and content depth: deeper content than young newspaper

sites butU not than developed news sites (such as 13 manchestereveningnews.co.ukF F) and not when compared to broadcasters’ 14 sitesF F. d. Geographic scope: universal coverage is different as not all local press papers

have websites today. However, byU 2012/13 we believe that each and every

local newspaper will need to have an online site,U as eyeballs migrate online – online is fundamental to the future of local media; any newspaper without a site probably lacks a future.

e. UGC: abilityU to upload UGC not distinctive;U only distinctiveness is local community producer, using licence fee to train people on creating videos, which could be provided by any agency.

f. Lack of advertising: notU a source of distinctiveness. g. 3rd party links: Links are distinctive but ought to be provided anyway.

A table explaining Human Capital’s findings and our commentary is provided at Appendix 1.

Question 5. What role should the BBC take in the development of local video news? We believe that the BBC has three clear roles in the development of local video news: • Provide high quality, independent broadcast news service and regional programming only to correct for the market failures that exist in the broadcast

10 Human Capital page 21 11 Human Capital page 35 12 Human Capital page 35 13 Human Capital page 23 14 Human Capital page 36

market. We remain very supportive of the BBC’s role as a Public Sector Broadcaster and as a fixed point in the media landscape. • Ensure its facilities where possible can be leveraged by local commercial providers to their advantage, given they are publicly funded and, we suspect, on occasion under-utilised. • Ensure that the BBC’s moves do not distort the market in such a way as to discourage the development of a broad range of local video. Aside from these three roles, we do not see a role for the BBC in copying or replicating the local press’s plans for online video.

Question 6. What effect, if any, would the proposal have on your interest in, and consumption of, local news? and Question 7. In which ways, if any, would the proposal benefit (1) you and your family, (2) your local community, (3) your local area? We are sure the voice of the listener and consumer will provide useful information, as has the BRMB research, as featured on the Trust’s site. However, we make three comments on the usefulness of such research. Firstly, wording the question in terms of a benefit make it an (albeit unintentional) leading question. Consumers can see some benefit in most proposals or new consumer propositions they are offered. Any marketer can wax lyrical about the difference between consumers expressing an interest in something and actually proceeding with purchasing or consuming, especially when the question explicitly asks the reader what benefits he or she sees. Secondly, were GMG to place our plans for the future development of our sites by 2012/13 in front of a consumer and ask him/her whether he or she sees a benefit, we would expect to see a comparable level of benefit. This demonstrates both the weakness of the question but also returns to the lack of distinctiveness of the service. Finally, Ofcom’s research as presented in the Second PSB Review suggests that citizens in Manchester are already pleased by the provision of local news and content, suggesting that in areas where local press websites are well-developed, provision is already fit for purpose. Comments from respondents in the region were significantly more positive about the quality of news available in the region than the UK average, supporting our belief in the strength of the PSB service that Channel M 15 and manchestereveningnews.co.uk is providingF F.

Question 8. The service as outlined would be available only to those with a broadband internet connection. Is this the best way for local news to reach you and your community? We are under the impression that, following a combination of a lower than expected licence fee settlement and outcry from the regional press, the BBC has already halted plans for the broadcast of ultra-local content. We are grateful for any role the BBC Trust has had in this decision and would not seek to have this debate reopened. The present proposed service covers online and will be extended to mobile, according to BBC Management.

15 Ofcom PSB Review Phase 1, Figure 53: statements are “news about my region is generally of a high standard” and “the main TV channels should not be made to show more news about my nation/ region….”

Outside broadcast, mobile and online, it is not clear what other platforms are available for the distribution of video content to users.

Question 9. The service, if approved, will cost approximately £23 million per year at maturity. As a very approximate guide, BBC News Channel (formerly News 24) costs £42.9 million a year whilst BBC Radio Scotland costs £22.6 million. To what extent do you think local video represents a good use of the licence fee, both generally and compared with other possible areas for investment? We appreciate the use of comparable service costs to help the respondent benchmark what £23m represents. However, it is misleading to attempt to prove acceptability of a new service (online video) by comparing it to an existing service that has never had to prove value for money. The fact that BBC Radio Scotland exists and costs the very substantial figure of £23m does not imply that consumers and citizens believe this is a good use of the licence fee. Further, the £23m spend BBC Radio Scotland is enlightening and helps demonstrate the gulf between the level of licence-fee backed investment the BBC is able to deploy in comparison with commercial players and the impact this has on those commercial players. GMG operates the most listened to commercial radio station by hours in Scotland (Real Radio Scotland) at an 07/08 cost of []. Finally, BBC Management seeks to justify the cost by stating “8 out of 10 participants did not disagree with the licence fee being used to fund the proposal…” This is one reading of the data. The same data shows that under half agreed with using the licence fee to fund the proposal. We would strongly recommend that the Trust refers back to the original data in all cases, and not rely on BBC Management’s interpretation.

Question 10. Are there any other issues regarding the public value assessment of local video proposals you would like the Trust to consider? As we have previously commented in private and public, we believe that the BBC’s continued expansion online should be halted in areas that damage commercial markets. We approve of the Trust’s newly established role in questioning the BBC’s incremental investments. However, we believe that role should be extended to question the existing, not just incremental, operations of the BBC. The question should be asked, if the Trust applied the PVT today to all of the BBC’s services online, how many would be passed?

APPENDIX 1 – GMG Understanding of HC Distinctiveness Work

Human Capital Conclusion GMG Conclusion Potential Distinctive? page Distinctive? Distinctiveness Proposed service:…. Information: service area service Information: Is UK wide Yes BBC covers all 60 'areas' of 2 No Local press online today is a the UK patchwork quilt that covers most of the 1300 local communities covered by the regional press in the UK. However: 1: Since the future of local press needs to involve online, all papers will roll out their online presence over time, filling in today's gaps 2: In areas with low local press today, BBC coverage will be patchy anyway (60 sites covering the UK vs 1300 local press titles.) Within one of the 60 regions, the focus of the content will naturally be on areas of denser population coverage, leaving other areas of the region underprovided Is Local No Proposed service is no 2 No Agree with HC more local than MEN.co.uk 1,300 press papers and associated and Channel M sites will be more local than the BBC Quantity Quantity Produces Yes Quantity is distinctive vs 35 No 1: The proposed site has less content more emerging local press sites than broadcasters today, less than content (# but not vs the most MEN and less than alternative minutes advanced sites sources for video and # Content is not distinct vs 2: Defining distinctiveness by content stories) broadcasters but being created not repurposed is distinctiveness is provided spurious; from a consumer point of by content being newly view the consumer will not know; all created not repurposed creating new content would do for a broadcaster site is add in more cost 3: The quantity of video increasing on local press sites - it is a nascent market - HC are comparing local press today to BBC in 2012/13

Production Values: Quality Quality Values: Production Has more Only vs Only a source of 3 No 1:The quality of the content is not cuts per news distinctiveness vs most superior to MEN.co.uk and Channel M minute today newspaper sites today. sites today, let alone in 2012/13 Not a source of 2: Some smaller sites, such as the distinctiveness in the future Belfast telegraph comparable to the and not vs broadcasters BBC's proposed service already and, today like HC point out, local press sites will improve substantially by 2012/13 (page 35) 3: It also stands to reason that spending more money will create a site with a higher quality; £32m/60sites = £0.5m per site on video alone - considerably in excess of spend by alternative providers Uses more No No different from 5 No Agree with HC locations commercial Uses more No No different from 5 No Agree with HC diverse commercial media types Uses more Only vs Higher post production than 5 No Agree with HC post regional local newspapers today but production press local press plan for better online content by 2012/13 today Content not distinctive vs broadcaster sites Uses more No No different from 5 No Agree with HC interviews commercial Editorial approach Editorial approach Has Only vs Higher % high depth 5 No Also MEN and Channel M content no deeper regional content only vs local press different to BBC per HC argument coverage press today online Not distinctive vs today broadcasters or most developed examples of press neither today nor in future Has a No BBC unlikely to be 23 No Agree with HC higher % distinctive as local interest "serious" matters covered by local stories - press sites health, education, politics, crime Has more No Not distinctive No Agree with HC local democracy stories

UGC Has more No Not distinctive No Agree with HC UGC

Has Yes No commercial sites have 2 Yes but Local producers are not required for resource full time resource - only irrelevant local online video proposition - to help allow upload producers could be hired for UGC local support on existing sites - no need to content spend £23m creation Advertising Advertising Does not No Not likely to be different 3 No Agree with HC carry advertising 3rd parties 3rd parties Contains Yes Links are not provided by 2 No 1: Links can be provided by Google links commercial market already 2: Not important for local video investment - links should be present already Externally Yes Not done by commercial Yes but 1: Broadcast sites already have sourced market irrelevant content from 3rd parties - not distinct content 2: Money spent by BBC token % of total £23m cost

Institute of Welsh Affairs

BBC Trust – Ofcom Public Value Test Consultation BBC Local Video Service

Respondents: Nick Morris and Geraint Talfan Davies, Institute of Welsh Affairs

Question 1. How important is it that the BBC improves its depth and breadth of local news coverage?

No one doubts that online local news coverage could be improved. There are always gaps that can be filled and online technology can deliver increasingly localised and personalised services. The issue within Wales is whether these proposals should be a priority for the BBC. Our contention is that this should not be a present priority and that any new investment would be better directed at strengthening the BBC’s national services for Wales.

The IWA’s audit of media in Wales – Media in Wales: Serving Public Values – demonstrated conclusively that Wales lacks adequate investment across a range of media. This is exemplified in the retrenchment of journalistic investment in the print sector, the sharp decline in ITV news and non-news programming for Wales and in the planned reduction in hours and investment in BBC Wales services.

Question 1 does not seem to recognise the tension between depth and breadth. We note that the proposals are often couched in terms of quantity not quality:

“On average, up to 10 new local video stories created a day in each local area, adding up to no more than an average of 20 minutes per day, with an additional offer of up to three short daily bulletins for each of news, weather and sport….

…for each local area the totality of the BBC’s multi-media online news offer will still encompass considerably fewer stories than are provided on average by local newspapers.”

BBC Management’s assessment of the public value of its local video proposals, p. 4.

We do not believe that this increased volume will contribute significantly to the perceived quality or distinctiveness of the BBC’s services. Quality and distinctiveness would be better achieved in other directions, particularly in areas where the market place delivers least competition and leaves the largest service gap.

Question 2. Are the proposals outlined here an effective way for the BBC to improve its coverage of local news and events?

Question 2 should be re-phrased to ask not whether this is an effective way but whether it would be the most effective way for the BBC to improve its coverage of local news and

41 events. In our view, in the circumstances described above, an attempt to spread the BBC net further through more localised services would not represent the optimal public value for the additional investment.

We note that only one geographic focus group – in Llanelli - was convened in Wales, and that the results were far from conclusive. Llanelli respondents had the joint highest rating for ‘There is a need for more local news content in my area’ but joint lowest for ‘I would be interested in accessing a more local new news internet service provided by the BBC’.

However, we note that the division of Wales into five areas would represent a sub-regional approach, rather a truly local approach. The BBC management assessment refers to the fact that ‘most people live the majority of their lives within a 14 mile radius.’ The radius of all five of the proposed Welsh sub-regions would be up to three or five times larger than this. The proposed Welsh sub-regions do not correspond to any recognised description of local.

For example, the proposed south-east sub-region would take in Chepstow, Newport, Cardiff, the south Wales Valleys, Bridgend and Neath-Port Talbot – places and areas with different characters and loyalties. The proposed south-west Wales sub-region would encompass Swansea, Carmarthenshire, Pembrokeshire and south Cardiganshire. We suspect that this is not what the Llanelli focus group had in mind as ‘in my area’.

This carries the danger of falling between two stools – the national and the local – failing to satisfy truly local need while diverting resources and editorial focus away from the one area where the market provides least – high quality, national services for Wales.

Opportunity cost

We also note that BBC management’s own assessment states that

“the local video proposal is an ‘enabler’ to reduce the cost of existing BBC linear services.”

“The savings proposals inherent in the plans for each Nation and English Region assume significant levels of redeployment of existing staff resources to the new BBC Local Video offer.”

This would not be a sensible diversion of resources for Wales. What Wales needs currently from its news, current affairs and general programming is quality, significance and depth, not breadth. That increased depth at the Welsh national level needs the profile of broadcast delivery but it also needs to be better reinforced in online form. The BBC is uniquely placed to provide this.

Question 3. The BBC’s role is defined in the Royal Charter by six ‘public purposes’.

BBC local video proposals aim to support the following public purposes:

• Representing the UK's nations regions and communities • Portray and celebrate local communities, cater to their needs, stimulate debate on local issues and bring people together for a shared experience. • Sustaining citizenship and civil society • Provide independent journalism of a high quality, engage a wide audience in news and current affairs and encourage debate on these subjects.

To what extent do you believe the service, as outlined, will contribute to these public purposes?

Question 4. How different is the proposal from other internet local news services, which offer video content?

Question 5. What role should the BBC take in the development of local video news?

While the explicit diversion of resources from existing national services for Wales to the new local service would undoubtedly add some public value, we believe the proposal underestimates the extent of current local provision in Wales by other media and their potential for development but also their economic fragility. In the interests of plurality in Wales, we believe that other local media – newspapers and radio - need time and space to develop their services in Wales, without feeling powerful competition from publicly funded sources.

The greatest service that the BBC can provide in Wales is through the further development of its national services, and we would urge the BBC to increase its investment to achieve that aim.

Our recent media audit in Wales (p.58-9) concluded:

“There is much talk of investment in news today whether from broadcasters or from newspapers as they both converge in the online environment. But we must define our terms carefully. Investment in media development is not necessarily the same thing as investment in journalism. Investment in journalists is not the same thing as investment in newsgathering….

“There is a pressing need in Wales for investment in quality journalism: journalism that demands time, talent and space; journalism that can link the local with the national and vice versa, and where opinions derive from trusted, assiduous investigation; journalism whose intelligence and ambition measures up to the new democratic reality in Wales that we now have the capacity to pass laws to govern ourselves. Taking all media together we are a still a long way from that goal.”

Our audit also laid stress on the development of high quality non-news programming for Wales that could achieve quality and impact. We noted that BBC Wales schedules half as

43 many hours in peak on BBC 1 as ITV Wales does in peak on ITV1. This is another area where additional investment by the BBC would generate greater public value than the local video service proposals.

This should not be taken as a relegation of the importance of online development. On the contrary, we fully agree that the quality and profile of news and non-news services for Wales should have full expression in online form, in order that reach is maximised and that younger users are drawn in.

Institute of Welsh Affairs August 2008

Johnston Press

Introduction

Johnston Press welcomes the opportunity to contribute to the review by the BBC Trust of the proposal from the BBC for a Local Video Service.

The proposals have been presented as an extension of an existing BBC service, but on examination it is clear that they are more than that: - up to 19 new videos/day on every site - up to 26 minutes of new video/day - an interactive map to locate content - location based technology to deliver video content to mobile devices - content of broadcast quality – potential to broadcast on TV

Taken together we believe that the proposed video service is not merely an extension to the BBC’s existing local websites, it represents a significant enhancement of the sites.

This submission will show that if it goes ahead it will lead the BBC into direct competition with existing local news and sport providers, to their detriment. In addition, the analysis in this submission will show that the proposals do not meet the criteria of the BBC Trust for BBC investment, and on that basis should be rejected.

Johnston Press: Context

Johnston Press, like all regional press companies, is facing long term structural decline of print with the migration of some advertising to the internet and declining circulation, and short term cyclical pressures as the economy worsens. The company recognises that future growth will have to come from other sources, primarily the development of digital capabilities, in particular to replace a declining print audience and to extend reach to a new audience.

The company has made considerable investment in Digital over a number of years, with £9m direct investment, excluding editorial and local selling costs, in 2007. This investment has resulted in the company having 323 websites and a developing capability with video and user generated content (UGC). The current minimum targets for video are that daily newspapers should upload at least one/day and that weekly newspapers should upload at least one/week, although many sites are achieving considerably more than this. We anticipate that this will grow with future investments.

Revenue growth from Digital has been impressive, up 34% in 2007 and up an even better 52% for the first half of 2008. Although Digital revenues are still relatively small as a proportion of total revenue, the company’s strategy is to increase investment in Digital to fuel significant growth from this channel. The strategy is partly driven by the need to invest in growth markets and partly because we believe that Digital represents an attractive commercial opportunity.

The intention is to become the local community online hub for each of the localities covered by our newspaper titles. News and sport are the principal “hooks” to bring people to the sites, which will also increasingly include local information, what’s on, traffic and transport, lifestyle, health, UGC, social networks, games, and commercial opportunities such as Box Office

(discounted or preferential tickets to events), holidays, virtual shopping etc. They will be a one stop shop for all local information, will be a virtual meeting place to exchange news and views and will feature relevant products and services. To achieve this will require substantial investment which in turn relies on confidence that the audience and resultant advertising revenues are achievable. This confidence will be undermined if the BBC’s new service is approved.

BBC’s Service

The BBC’s local video service will result in a step change in the attractiveness of the BBC’s sites and represents a major threat to Johnston Press’s Digital development. The service has all of the criteria to achieve a very significant reach with consumers:

- rapidly growing market – viewing of video using broadband and mobile - brand strength – strongest media brand in the UK - marketing strength - excellent at the multi-media advertising of its services - product proposition – innovative, and expensive for others to match - consumer interest – very high levels of consumer interest in the proposed service - financial muscle – very significant funding, no commercial return required

However the BBC forecast that the investment of £68m in the video service will only add an incremental 4% of households to the level of household penetration the existing sites would achieve without the service. This forecast ignores their own research which reported that 65% of consumers said that they would visit the site at least weekly (BMRB). In addition the BBC calculations assume no increase in the use of mobile, despite reporting 50% growth in mobile usage of their site for 2007 and their research showing that 68% of mobile users watching video, watch BBC style content (BMRB). In summary we believe that their estimate is a gross underestimation of the service’s likely reach, and that it will achieve a weekly reach of 40-60% of all adults.

An additional issue is that the BBC’s research indicates that consumers will spend an average of 18 minutes on their new service, which will crowd out the time available for other local news sites. Thus the number of page impressions will be impacted to a greater degree than unique users.

Not only will the proposed BBC service have a very significant reach and audience time spent on site, but it will also be in direct competition with the existing and planned digital development from Johnston Press in terms of content, (news and sport) and audience (same demographics).

The reason that no other media company is planning to launch a service on the scale of that proposed by the BBC is that it is very questionable if there is sufficient advertising revenue to support it. If Johnston Press were to copy the BBC and add the same cost of local video to each of our websites, which are many more than the BBC’s, it would require an investment of £113m with advertising revenues considerably in excess of that. As a result media companies are taking a fast paced but incremental approach to video, rather than a complete step change in capability and financial investment.

In summary, if the service goes ahead the existing regional media websites will face a significant reduction in the audience and in the length of time spent on site. This will limit the ability of local

46 media companies to attract advertising, which in turn will undermine the growth strategies of these companies and will lead to lower levels of investment in digital and traditional media.

Public Purposes

The BBC’s submission identifies the following two Public Purposes as justifying the new service:

RepresentingU the UK, its nations, regions and communities:U The service is likely to achieve this although there is no evidence of market failure or lack of plurality to give a rationale for the launch: 1) The local online market is vibrant, competitive and rapidly evolving with many organisations recognising “local” as a priority e.g. Google have stated that they have two areas of focus; mobile and local. 2) There are no consumer concerns regarding plurality with 88% saying that they use two or more sources of local news (BMRB).

SustainingU Citizenship and Civil Society:U The question is not whether the BBC’s service will meet this purpose, because it will, but whether the public purpose overall will be enhanced or degraded by the BBC’s service. Currently the regional press with over 12,000 staff employed in editorial departments is THE primary provider of local news and is truly sustaining citizenship and society. The BBC and other media often get their local news from the regional press as they don’t have the reporting capability. No-one else has the depth of reporting on local matters and no-one else is likely to in the future:

- ITV are reducing their regional news coverage - cut backs are taking place in local radio e.g. GCAP - internet companies do not have the will or resources to collect local news

Given that the regional press is under considerable financial pressure, additional strong competition from the BBC locally will at the minimum limit the ability of others to develop, and could lead to reductions in newsgathering capability, damaging citizenship and civil society.

In isolation the BBC’s proposed service meets these criteria, but it needs to be judged in terms of its overall impact on the Public Purposes, and when that approach is taken it is seen to have a negative impact.

Public Value

The BBC’s submission identified the following Public Values as justifying the launch of their new service:

ReachU :U A rationale for the service is that it will extend the reach for BBC News, however the main drawback to the service identified in BBC commissioned research, was the lack of universal access with only 39% of households with incomes less than £12.5k having the internet compared to 91% with incomes above £50k (Opinion Leader). In addition it was stated that young people aren’t as interested in the core content of news and can easily avoid it on the internet and old people don’t use the technology as much. In summary the internet is not the ideal channel to extend the BBC’s audience, instead it is more likely to attract the existing audience to a new service.

ValueU to Consumers:U The consumer response to the service was very positive but consumers were not as clear cut when asked about using the licence fee to fund it, with less than 50% of respondents agreeing that the licence money should be used to fund the service (BMRB). In addition only 43% considered that the service would be important to them (BMRB).

DistinctivenessU :U The BBC Trust has proposed a number of distinctiveness criteria “most or all of which would need to be met by all of bbc.co.uk content”. On examining each of the criteria in turn it is clear that the local video service does not meet these criteria:

Editorial Values: Whilst the BBC is rightly recognised for its strong editorial values, these values are not unique to the BBC. Local newspapers have very deep roots in their communities and are highly regarded because of the integrity of the editors and their independence from commercial or political pressures. In Johnston Press every manager knows that ultimately the editor is the sole decision maker in deciding what will and will not appear in print and online. The editorial values of the Johnston Press titles are highly regarded by consumers with 78% agreeing that their local newspaper “is the leading authority on local matters” (Johnston Press independent research 2008). In addition if one takes trust as representing the values of accuracy, independence, impartiality, taste and decency, then actually the regional press is more trusted than the BBC according to Newspaper Society research.

Non-Commercial: The question here is not whether the BBC is distinctive by not carrying advertising, because clearly it is, the question is whether this is an issue that concerns consumers? There is no research evidence in the BBC’s submission or that Johnston Press has conducted, that indicates that consumers are concerned about the commercialism of the regional press. Indeed there is evidence that advertising in regional press is seen as a positive, providing relevant local information. In addition, recent research in the U.S. revealed that 63% of consumers thought it was reasonable to have online advertising with short news or sport videos (Ipsos 2008).

Made in and for the UK: This is not a distinctive criteria as all local sites are by their nature produced in the UK.

Clear link to television or radio programme brands: There will be no clear links to broadcast brands.

Level of creative and editorial ambition: This is a hard criterion to measure; however Johnston Press does have recent research showing that consumers are satisfied with the content in their newspapers with 97% agreeing that their local paper “informs you about local matters” and 78% agreeing that their paper “is leading authority on local matters”. A newspaper which wasn’t “serious in intent, breadth and depth of subject matter” would not achieve these levels of consumer support, again indicating that this is not a criterion unique to the BBC.

Fresh and original approach: If the BBC local video service were to be launched immediately it would be original, however the question is whether it will be original in five years time when it has been fully rolled-out? The intention of Johnston Press and other regional

media is to develop their own digital businesses, including video, and so it is highly unlikely that the BBC service will be as fresh and original in 2013.

Uniqueness: The BBC local content focussing on news and sport will certainly not be unique; news and sport are extremely well covered by Johnston Press titles, and are the main reasons for visiting the websites. In addition, the BBC’s service and local media websites will compete for the same audience on the same occasions. Finally the BBC’s service will compete on a local level due to the mapping interface, which allows consumers to choose news stories close to their homes, and the volume of stories available will mean that all major local news stories will be covered. Consumers certainly view the services as similar with 88% saying that they use commercial media for the same information as the BBC’s service (BMRB).

It is clear, following a discussion with the BBC, that their proposals to mitigate the impact of their new service by cooperating with other media are very unlikely to have a significant effect. The proposals were either very limited in their scope e.g. Training, or under funded e.g. Content Syndication, or were not applicable to Johnston Press e.g. Community Media Partnership.

The BBC’s proposal is weakest in its attempts to meet the Public Value criteria. In terms of Reach and Value to Consumers the proposal does not fully meet the criteria, and in the case of the criteria for Distinctiveness, it fails completely.

Summary

There is little doubt that the proposed service will attract a large audience, but it has major flaws: - uncertain public purpose benefits - reach rationale ill-founded - value results not clear cut - lack of distinctiveness

It is apparent that the BBC’s service is not just an extension of an existing service but is a step change in capability which comes at a very high price in financial terms and in terms of undermining the health and plurality of local media. In addition, it does not meet the BBC’s Trust’s own criteria for bbc.co.uk.

There is no case for spending £68m developing this service.

John Rossetti

I'm sorry the consultation has closed ,I think it was a shame that a) it was not more widely advertised b) it was not given more time.

Local Tv Broadcasting, is the missing link in PSB, and there has never been a more suitable medium to draw the community together, my own local tv station in Taunton had much success in doing just that with a massive 85% population reach http://www.24fps.tv/serv03.htmHU UH It was a great shame that its main source of revenue (a newspaper group) got cold feet and withdrew its support, maybe that says it all !

Kind regards and good luck to all concerned

John Rossetti (ex) Head of Broadcasting Taunton Television RSL ch 22

Manx Radio

Local video PVA representations BBC Trust Unit Room 211 35 Marylebone High Street London, W1U 4AA

19 November 2008

Dear Sir,

Re: BBC Local video proposal

Having considered the BBC’s plan for BBC Local, I write on behalf of the Radio Manx Ltd board to add our formal support for your innovative proposals.

Manx Radio is the National Public Service Broadcaster of the Isle of Man. It is the oldest commercial radio station in the British Isles, owned by the Isle of Man Treasury who supports us through the payment of an annual subvention. Our independence is maintained through the Radio Manx Ltd Trust and we are licensed by the Isle of Man’s Communications Commission.

We are the only provider of daily News and Current Affairs on the Island and, consequently, achieve an audience reach of 50%. Potentially, our station has the most to loose through your proposals, however, unfettered access to your content and a collaborative approach to news gathering, offers us an opportunity to thrive.

For a number of years Manx Radio’s aim has been to complement our comprehensive news and sport coverage on the web by producing a short weekly video broadcast - both to the Island and to the Manx diaspora via our website. Even though our newsroom is the Island’s largest, employing eleven journalists, the ongoing investment required to deliver a compelling video service remains beyond our means and is unlikely to be funded in the foreseeable future by either ourselves or any other media provider on the Island.

BBC Local offers small broadcasters, like ourselves, the opportunity to improve the news service we offer on our website. However, it is our view that the key to the success of your proposals is content sharing as this will allow us, and other commercial organisations, to develop a video news service for our web users.

Key to our usage would be the ability to utilise the content within a Manx Radio programming and website template, as is currently done on BBC websites such as bbc.america.com and uktv.com. This would allow us to utilise the material in a format that would enhance our existing news coverage on the web. Any restrictions, including over zealous syndication restrictions, limiting our ability to integrate BBC content with our own would be problematic and would significantly reduce the value of the BBC offering. It could

51 even have a marked effect on our ability to maintain audience. It is therefore essential that the content can be embedded in existing pages that also carry commercial advertisements or banners, but are clearly not aligned with BBC content. The editorial integrity of the BBC’s content would obviously be maintained and BBC branding requirements upheld as required.

The BBC’s Description of Service states that the BBC would seek to develop appropriate editorial initiatives with local news providers.

Manx Radio’s newsroom has become the destination of choice for journalists seeking employment on the Island. It is our aim to offer staff the widest possible career development and employment opportunities so that we can retain the best staff at the station. Following the signing of a Memorandum of Understanding with the BBC in September 2006, where we agreed for the BBC ‘Where I Live’ team to operate out of our offices and for both broadcasters to share content, we have developed close working practices with the BBC and also benefit from access to the BBC’s SON&R regional training centre. Should BBC Local be launched on the Isle of Man it is our aspiration that Manx Radio staff would be offered an ongoing opportunity to contribute to the BBC’s output. We believe this would offer both organisations substantial benefits – the BBC, access to quality journalists with in- depth local knowledge and Manx Radio, opportunities for journalists to further develop their careers.

It is our view that if commercial operators have unfettered access to the content, are able to incorporate it within their news templates and that the BBC can work in tandem with existing news providers to create career opportunities for journalists, the proposed services would not have a detrimental effect on any existing service on the Isle of Man. Indeed, the service would meet the long-term aspirations of the Manx population.

Yours sincerely,

Anthony Pugh Managing Director, Manx Radio

BBC Local Video consultation

Media Trust response to the Public Value Assessment (PVA) and the Market Impact Assessment (MIA)

Media Trust Set up in 1994 as a registered charity, Media Trust works in partnership with the media and communications industry to support the communications needs of the Third Sector – charities, voluntary and community organisations, social enterprise and citizens’ interest groups.

Media Trust corporate members include: BBC, BSkyB, Channel 4, Daily Mail and General Trust, Discovery Networks Europe, Disney Channel UK, Emap Plc, Guardian Media Group, IPC Media, ITV, MTV Networks UK & Ireland, News International, Newsquest Media Group, OMD, Turner Broadcasting, Warner Bros. and WPP Group.

Media Trust delivers a range of services including training and advice, content production, content distribution, media volunteers and mentors, grant-giving and campaigns. www.mediatrust.org

Media Trust runs Community Newswire, a partnership with The Press Association, distributing 30 community news stories a day to the UK media, including the BBC. www.communitynewswire.org

Community Channel Media Trust also owns and runs Community Channel, the UK digital television and broadband platform for the Third Sector, broadcasting 24 hours a day on Sky 539 and Virgin 233, and 3 hours a day on Freeview 87, and online. www.communitychannel.org

Community Channel is supported by the wider media industry, including the BBC, BSkyB, ITV, Channel 4, DMGT, News International and Newsquest Media Group. Media industry partners provide bandwidth, content and marketing. The Office of the Third Sector in the Cabinet Office provides core grant of c.£1m a year. According to BARB the Channel has1.5m viewers a month, and an annual reach of 6m.

Media Trust partnership with the BBC Media Trust has worked in close partnership with the BBC over many years. Partnership activity includes: advice and training for charities and communities, volunteering and mentoring, consultation with charities and communities, support on campaigns (eg targeting ‘hard to reach’ communities’, content onto Community Channel, cross-promotion, local activity), increased access to community and charity stories and voices, opportunities for BBC staff development and training, and opportunities to extend BBC content through Community Channel. BBC Nations and Regions in particular makes its community stories available to Community Channel, where editorially relevant, giving the BBC’s local and national community stories a UK-wide reach on digital television.

Shared values and purpose Media Trust endorses and indeed shares the BBC’s values and public purposes, which are of unique value to the wider Third Sector – charities, voluntary and community groups - and to citizens’ interests in communications. In a media economy where the broadcast commercial media industry has both less resource for community content, and fewer regulatory requirements, the BBC necessarily has increasing importance for the Third Sector, having both the resources and the wider regulatory and statutory requirements to serve citizens’ interests in communications.

Reaching all citizens: a new use of the licence fee However we would urge the BBC Trust and Ofcom to consider the fact that despite the above, many of the UK’s most marginalized and disadvantaged communities and citizens, including young people, will, out of choice, access commercial media before the BBC.

The BBC needs to undertake a change in its culture and values to ensure that it has universal widespread take-up as well as reach among the UK’s most marginalized and disadvantaged communities.

Media Trust believes that this can best be done through an extended and in-depth programme of partnerships, and distribution of the licence fee, to engage and give voice to these communities.

This needs to happen across the BBC, but should urgently be factored into the proposal for BBC Local Video, which gives a unique opportunity to pilot an extended partnership model. More detail of our solution, in the context of the Local Video proposal, is given below.

Overall, Media Trust welcomes the principle of BBC Local Video The proposed BBC Local Video service can potentially create a new platform to give voice to communities and citizens around the UK.

Media Trust believes that the wider Third Sector, and the communities and citizens the Third Sector seeks to support, can only benefit from this extended platform, which will give additional opportunities for stories and voices, campaigns and new ideas that come through the Third Sector.

BBC Local Video should, we hope, give increased opportunities for video content related to the Third Sector and communities to be created and viewed, from local to regional, to national, UK-wide and international platforms, acting as a vital distribution mechanism.

The ability for UK-wide and global search to access community stories through the highly visible and respected BBC brand will add real value.

The BBC's Local Video proposal will play a key role in counteracting the metropolitan bias of much of the modern media, giving opportunity and voice to community and voluntary groups throughout the UK.

We also welcome the intention to support local production and ‘citizen journalism’ through both the proposed local commissioning fund and support from mentors and community producers.

BBC Local video will fill a ‘gap in the market’ and could add proactive competition to encourage further investment in commercial and not-for-profit web-based local media

Crucially, we believe that the market will not provide the added value nor the added investment in our communities that the BBC licence fee and brand can provide.

We have seen over more than thirty years now how the broadcast commercial media industry has not been able to prioritise social and community investment:

ITV has slowly had to cut investment in social action broadcasting at both regional and network level. The new ITV Local broadband service is to be welcomed, and will prove a great platform for community and third sector content, but this is being delivered ‘on a shoe-string’, heavily reliant on outside resources and contributions for social action content. Future investment in ITV Local is uncertain.

Independent local radio has also dropped much of its social action and community content over the last 20 years, from a time when most ILR stations invested in their local ‘action desk’ and high impact local social action campaigns and community content.

Cable was launched in the UK with great promises, alongside regulatory requirements, for community broadcasting. This never materialized.

Now new commercial licences will have even fewer, and in the case of the newly available digital spectrum ‘dividend’, no requirements for community or social action content. Market forces have won the day.

Media Trust therefore welcomes the BBC’s proposed investment in local news and stories, which will add depth and much needed competition. Without competition from the BBC, the commercial local media sector would perhaps minimize their own investment, and/or restrict their investment to those local services that attract revenue and cost the least to produce.

However the commercial and community-based ‘independent’ local media industry must be protected, or at least compensated, against the proposed investment in BBC Local Video, which in its current model could also have significant negative market impact.

Commercial local newspapers and radio stations are increasingly investing in local video and will arguably be the most negatively impacted by the BBC Local Video proposals. Commercial local video will however be able to benefit from those commercial services that the BBC will NOT carry – listings etc. This list should be reviewed to consider further areas. We should also remember that the BBC is not in a position to generate revenue from sponsorship and advertising, product placement and sales of bandwidth/web pages, as can the commercial sector.

BBC Local Video and the local community media sector

There are widespread fears among the Community Media sector that allowing the BBC to invest in local video will seriously damage the small but burgeoning community ‘not-for-profit’ local television movement across the UK. However, Media Trust believes that if the BBC withdrew its plans for Local Video, these community and not-for-profit broadcasting and/or broadband services would continue to struggle to find the resources to have significant impact and reach in their target communities. In a climate of both UK and global recession across the public, private and charity sectors, we do not believe that anywhere near the equivalent of the proposed £68 million spend from the BBC licence fee would be available to this sector from other sources, to fill the gap should BBC Local Video not go ahead.

Media Trust believes that the solution for community-based local and not-for-profit television (whether on DTT or broadband) is to create a significant platform-neutral fund, taken from the proposed annual £23m BBC licence fee investment in local video, that will invest in local community content production, including news, and be a resource to the BBC Local Video proposition, to the community media platforms, to the commercial local media platforms, and to the wider communities that these local platforms will serve.

Content would cover a range of community themes, but would ensure that community sports and community arts and culture are given particular attention in the run-up to the 2012 Games, and as a legacy to the Games.

As with current locally produced community content coming from the BBC, ITV and community media, the UK-wide Community Channel would also showcase this content across the UK on free-to-air digital television, increasing its reach and public value, and, as switch-over gathers momentum, ensuring near- universal access, that is not yet provided by broadband-only distribution.

Media Trust proposes that this community production fund should be broadcaster/platform neutral. The fund would be used to invest in community-produced content that could be made available equally to BBC, commercial and community websites, as currently happens with content and news produced by Community Channel and Community Newswire, which is openly available to, and used by, a wide range

of online, print and broadcast media, including ITV Local, local newspaper websites, local, regional and national digital media platforms.

The ‘public value’ of this content, and therefore of the BBC’s licence fee investment, would be increased by making the content (which should not be BBC-branded) available to additional platforms at no charge.

Crucially the community-based production process would add additional public value to those people and communities involved in the production, many of whom would be people and communities that do not traditionally have access to the formal creative industries, to creative resources, or indeed have a ‘voice’ in our media. The BBC and other media professionals and creatives, would be encouraged to mentor, train and volunteer with local community producers, broadening the BBC staff’s horizons, contacts and partnerships, and bringing much-needed diversity to the media industry. This extended partnership would also be a major catalyst for broadening digital media literacy across our communities.

This fund would provide an injection of funds and support for content for community media tv on web and DTT across the UK.

The fund should be significantly greater than the, at best, tokenistic pledge of an “annual fund rising to £800,000 by 2012”. We would expect this new fund to be nearer £8m a year, evidencing the BBC’s real commitment to partnership, diversity, and extended public value.

In summary BBC Local Video must invest significantly more in resource-based partnership with communities before approval is given

We would expect the following commitments:

• A significant increase in the proposed fund for purchasing local video content, alongside a widening in the purpose of the fund to include purchasing, or ‘commissioning’ of community stories from not-for-profit organisations.

• A commitment that a major part of this fund will be ring-fenced for the community, social enterprise and ‘not-for-profit’ sector to enable content production, and not be available to the ‘for profit’ sector.

• A commitment to increase signficantly the amount of community content on the 60 proposed sites.

• A commitment that content produced via this community fund will be available to all platforms, and not be BBC-branded.

• A commitment to provide a quantifiable and increased amount of training, mentoring and other support to local community media producers, including a guarantee of local community producers seconded into the BBC, and local BBC producers on attachment into the community.

• A commitment to showcase additional non-BBC-branded content on the BBC Local sites. In the same way that networked BBC News will carry “Sky Sports” branded content we would envisage the sites carrying content provided by local community producers, community media tv/broadband stations and Community Channel content. This ‘independent’ content could if necessary, be ring-fenced in a clearly identified ‘independent’ section of the sites, to protect BBC editorial requirements.

Media Trust August 2008

Contact: Pascal Selvon, External Affairs Media Trust 2nd Floor Riverwalk House 151-167 Millbank London, SW1P 4RR [email protected] 020 7217 3649

MG Alba

Local Video: a response to the BBC Trust and to Ofcom by MG ALBA Introduction MG ALBA is working in partnership with the BBC to launch and run the Gaelic Digital Service, which will begin broadcasting in September 2008. MG ALBA’s remit is to ensure that a wide and diverse range of high quality programmes in Gaelic are 16 broadcast or otherwise transmitted so as to be available to persons in ScotlandF F. The Gaelic Digital Service will be a BBC-licensed service. It will broadcast a wide range of content including a television news service provided by the BBC, and other programmes produced by the production arms of BBC and stv and by independent production companies. It will embrace the existing Gaelic radio service, Radio nan Gàidheal, and will also include enhanced online provision. The BBC’s Gaelic television news service builds on the well established radio news provision on Radio nan Gàidheal. Contributions to the service will be made from across Scotland with the hub for the service being located in Inverness. Gaelic speaking video journalists based in Glasgow, Edinburgh, Stornoway, Uist, Skye and Argyll, will be central to the bespoke newsgathering element of the Gaelic news service. Video journalism content will form part of the linear television news service and will also be available online accompanied with text to offer support to Gaelic learners. We would welcome the sharing of such content across different platforms and geographical areas as appropriate.

Service description

We note that there is no reference to Gaelic in the service description, and we understand that this is because the PVT process for the Gaelic Digital Service was still in progress when the local video proposition was initially drawn up. A clear outline of the proposed arrangement for Welsh language local video in all parts of Wales is included in the service description, and we would welcome the inclusion at subsequent stages of the PVT process of a description of similar arrangements for Gaelic local video content in Scotland, suitably aligned with the news and online provision of the Gaelic Digital Service.

BBC Trust questions

Question 1. How important is it that the BBC improves its depth and breadth of local news coverage? MG ALBA sees it as important that the BBC news content provided through the Gaelic Digital Service is valued by viewers and seen as relevant and accurate. It will be important to achieve the correct balance of local, Scottish, British and international news in order to engage the Gaelic-speaking audience.

16 MG ALBA is the operating name of Seirbheis nam Meadhanan Gàidhlig, whose remit is set out in the Communications Act 2003.

Question 2. Are the proposals outlined here an effective way for the BBC to improve its coverage of local news and events? MG ALBA believes that there could be value in the proposals, and audience feedback will be important in assessing how well viewers respond to local video content. However, audiences in areas with poor broadband service could experience difficulty in accessing content that is available only online, and this must be taken into consideration when assessing the public value of the proposed service. See also response to question 8 below.

Question 3. The BBC’s role is defined in the Royal Charter by six ‘public purposes’. BBC local video proposals aim to support the following two public purposes: Representing the UK's nations regions and communities: Portray and celebrate local communities, cater to their needs, stimulate debate on local issues and bring people together for a shared experience. Sustaining citizenship and civil society: Provide independent journalism of a high quality, engage a wide audience in news and current affairs and encourage debate on these subjects. To what extent do you believe the service, as outlined, will contribute to these public purposes? MG ALBA believes that the service as outlined could make a significant contribution to these public purposes.

Question 4. How different is the proposal from other internet local news services, which offer video content? MG ALBA has no comment on this point.

Question 5. What role should the BBC take in the development of local video news? MG ALBA has no comment on this point.

Question 6. What effect, if any, would the proposal have on your interest in, and consumption of, local news?

MG ALBA has no comment on this point.

Question 7. In which ways, if any, would the proposal benefit (1) you and your family, (2) your local community, (3) your local area? MG ALBA has no comment on this point.

Question 8. The service as outlined would be available only to those with a broadband internet connection. Is this the best way for local news to reach you and your community? No. The best way is by television. Confining local video content to a broadband-only service gives rise to significant exclusion issues. The internet take-up rate for socially excluded persons and households is thought to be low. Therefore unless the issues posed by social and economic exclusion are not addressed, the service risks not benefitting those whom it could be of most value to.

Some areas of Scotland, such as rural areas in the Highlands and Islands, have no broadband service or a service whose bandwidth is too limited to carry audiovisual

17 contentF F. MG ALBA is concerned that the weakness or absence of broadband capacity in many of the areas to which the Gaelic Digital Service will be broadcast will prevent viewers using the online watch-again facility to be provided through the iPlayer and other sites, and we would have the same concerns about websites offering local video news content.

Question 10. Are there any other issues regarding the public value assessment of local video proposals you would like the Trust to consider? MG ALBA has no comment on this point.

Conclusion and contact details for MG ALBA MG ALBA is willing to have this consultation response made public by the BBC Trust and by Ofcom. If further information is required, please contact Alison Lang, Corporate Affairs Officer, at the following address:

MG ALBA Rathad Shìphoirt Steòrnabhagh HS 1 2SD 01851 705550

[email protected]

17 Detailed information on broadband “not spots” is available from Highlands and Islands Enterprise.

Newspaper Society

NS Response to BBC Local Video Proposal

Executive Summary

1. The Newspaper Society represents the longest established regional media industry, with an audience of over 40 million adults throughout the UK for its 1300 regional and local newspapers, daily and weekly, paid for and free; 1100 websites, 750 magazines, 36 radio stations and 2 TV stations.

2. The NS does not believe that it is in the public interest for the BBC to expand from being a public service broadcaster to being a public sector publisher. Furthermore, the BBC should not be permitted to do online at a local and regional level what it has previously agreed that it would be unacceptable for it to do on paper as a newspaper.

3. This submission by the NS should be read in conjunction with the evidence which it has previously submitted, supporting the points made in its discussions with Ofcom and the BBC Trust and the BBC’s Local Video proposal, which we trust will also be taken into account. We also hope that the BBC Trust and Ofcom will ask the BBC to supply the information which we identified as important to a proper assessment of the impact of the BBC’s proposal upon our members.

4. This submission must also be read in conjunction with the strong evidence and detailed information submitted directly to Ofcom and the BBC Trust from companies comprising a very substantial proportion (over 80 per cent) of the industry.

• Trinity Mirror plc • Johnston Press plc • Newsquest Media Group • Northcliffe Media Ltd • Guardian Media Group plc • Archant • Midland News Association Ltd • Iliffe News & Media • Kent Messenger Ltd • Independent News & Media plc • CN Group Ltd

• NWN Media Ltd • Clyde & Forth Press Ltd • Barnsley Chronicle Ltd

5. All companies - from major group to independent family concern - point out that there is no market failure to justify state-funded intervention into the regional and local media, that the BBC would be merely replicating local news and related online services already provided by commercial local media, and that the impact of such intervention would be hugely damaging to the local media sector at a critical time in its digital development, thwarting the deeper, broader and richer services which they would provide to their regional and local communities.

6. The BBC should not be allowed to justify its aspirations for damaging expansion into an area already well served by the independent commercial media, as a response to criticism of its own shortcomings, as provider of local and regional news.

7. The BBC Trust’s review of bbc.co.uk demonstrated that the BBC’s local news online services offer nothing distinctive and are among the least valued parts of the service. These criticisms were echoed in the review of the BBC’s network news coverage of the four UK nations.

8. The BBC’s proposals contain no effective constraints upon the BBC’s activities and cross-promotion of them sufficient to prevent damage to the industry.

9. The industry is also being asked to trust in the efficiency of BBC’s management controls and oversight mechanisms. To date, these have been shown to be so poor as to permit huge overspend and misallocation of budget in bbc.co.uk to escape unnoticed. The BBC Trust has asked the BBC to discuss with the NS and others how it should improve its management controls, so that it really does confine its activities to those of real public value and distinctiveness.

10. We await these further discussions and meetings with the BBC for it to explain the details of its current proposals, and to explain why they vary significantly from its previous propositions, as outlined by Mark Thompson, to the NS and the industry.

11. We had pointed out that areas such as local and regional news were well served by the commercial sector. Important aspects of the BBC Local Video proposal, highly relevant to its damaging impact upon our members’ services and revenue, have been placed outside the scope of the BBC Local Video assessment. The NS is therefore keen that Ofcom and the BBC Trust take into account these matters and the outcome of any discussions in their assessment of the BBC Local Video proposal, as well as the review of the bbc.co.uk service licence.

12. We look forward to receiving full responses to the questions which we posed to the BBC Trust in July, and which are essential if we are to respond fully to the current process.

13. The impact of the BBC Local Video proposal cannot be evaluated in isolation from the rest of the BBC’s news and online operations.

14. It is important that neither Ofcom nor the BBC Trust view the BBC Local Video service as a mere incremental addition to the BBC’s existing services. It is a major development of the BBC’s activities which will compete direct with our members’ operations in a harmful fashion. As the BBC itself states: “It is important to recognise that the BBC plans its journalism around a broad portfolio of services across TV, radio and online that are UK-wide and nations and English regions specific, and that work together as part of one holistic offer for audiences.”

“The BBC’s reporting of the UK will benefit from the strengthening of the BBC’s newsgathering pyramid. The BBC’s Local Video proposal – subject to approval by the Trust – is designed to deliver a new tier of local reporting based in 60 communities throughout the UK.”

[BBC Management response and action plan Trust Impartiality Report: Network News and Current Affairs Coverage of the Four UK Nations]

15. This service will ultimately be offered across every BBC platform and will therefore be in direct competition with every facet of any regional newspaper company’s multi-media portfolio, whether mobile, website or broadcast.

16. The BBC can only do this because it enjoys freedom from the media ownership controls and the cross-media ownership controls that fetter its commercial competitors. Regional media companies are barred by law from ownership of such a multiplicity of local, regional and national television, radio, newspapers and other media outlets on plurality and competition grounds. The BBC should not be permitted to exploit the ownership and publishing freedoms that it enjoys under its Charter which are denied to its commercial competitors, to their detriment. Nor should it be allowed to found any claim to distinctiveness upon this.

17. It is important that Ofcom and the BBC Trust evaluate the BBC’s cross- promotion of the service and the effect that will have upon our industry’s operations. The BBC intends to cross-promote the service across every BBC media platform. It will therefore compete directly with our members’ operations, which cannot emulate such powerful cross-promotion.

18. Ofcom and the BBC Trust must evaluate market impact, distinctiveness and public value by reference to the proposals’ overlap with other areas of BBC activity, which are subject to different service licences and different budget elements. Crucial elements of bbc.co.uk which will drive the use of the BBC

Local Video will otherwise be excluded from the assessment: cross-promotion across all BBC platforms; functionality-improved navigation including interactive maps - will be a key factor in the service’s threat to local commercial media, yet have been designated as part of the ongoing modernisation of the BBC local provision and will not be affected by the outcome of this assessment.

19. Ofcom and the BBC Trust should also enquire closely into the BBC’s claims of partnership to justify its proposal. The BBC cites a few ad hoc examples: we suggest that Ofcom and the BBC Trust might do well to inquire direct of any newspaper company cited to find out whether they would characterise this as a partnership project and whether it is an experience which they would repeat. To our knowledge, the BBC has not put forward any true joint venture schemes which would prove of long-term mutual benefit sufficient to attract interest from the industry, let alone neutralise the commercial damage which the proposal threatens. We are unaware of any members whose opposition to the BBC’s proposals is tempered by such offers. Nor is ‘partnership’ a concept unique to the BBC - many characteristic regional press activities and interaction with their local communities, from newspapers in education to fundraising for local causes, could also be characterised as partnerships of public value.

20. Government and Ofcom will shortly be making decisions across a range of matters that bear directly upon the provision of local and regional news and information, including media ownership rules. Before doing so, they need to take a considered view of all relevant policy developments and their consequences for the regional media industry.

Importance of Independent Local News and Media

21. The regional press has an unswerving commitment to the provision of local news and information to reflect, inform, engage and empower the communities in which it has been rooted for generations. It has maintained its independence from statutory content controls, state subsidy and public funding, in order to safeguard the independence of its journalism.

22. The industry’s journalists are the foundation of the news gathering process in all nations and regions of the UK. A quarter of the entire regional press work force is focussed upon its editorial activities. That unique investment has earned the trust of their audience in the industry’s print and online work. This exceeds the levels enjoyed by the BBC. (We have provided supporting evidence.) Indeed, much of its competitors’ local and regional news output is reliant upon the work of the industry and derivative of it. Ofcom itself has acknowledged the public service credentials of the industry’s news provision. It has suggested that local radio already looks to partnerships with local newspapers to strengthen their licence applications, while it suggested itself that local television might have to rely upon local newspapers to maintain its local news services in the future (New News, Future News).

23. The industry’s news and other editorial services are essential to local plurality. They could soon prove to be the sole independent competition to state-subsidised media, ranging from the publicly- funded BBC to local government media.

24. Policy makers increasingly seem to assume that public subsidy will be necessary to maintain local news and information, fearing that financial incentive and lightening of public service burdens will be necessary to prevent others from resiling from their public service obligations. But they have yet to give detailed consideration to the effects of such a policy upon the regional media industry, including local, regional, Scottish, Welsh, and Northern Irish newspaper titles and their websites.

A Critical Time for Local Media Digital Development

25. The regional press faces fierce competition for audience and advertising from an ever-growing host of other media. The industry has responded to the challenge by investment and innovation. There are digital dimensions to every aspect of member companies’ current and future operations. The NS and its members’ submissions have provided some flavour of the huge number and variety of the new services being introduced.

26. The BBC’s reports on market impact and distinctiveness are out of date and inaccurate. In making their assessments, they certainly do not reflect the range or nature or quality of the services already provided by the industry, nor their businesses’ strategic development. Our members’ submissions provide very detailed information about their services, how the BBC will replicate and then compete direct for audience with those services and the adverse effect that will have upon the revenues necessary for our members to sustain and develop their operations.

27. The BBC admits that it is not currently serving this market for regional and local news and information services in an effective manner. But the BBC cannot simply be permitted to use that as a justification for proceeding with its plans, as though the market does not exist and without regard to its plans’ effect upon the commercial operators who are already investing, creating, developing and serving this market for regional and local news and information.

28. The industry is developing its digital operations in the context of aggressive market conditions. The slowing economy and uncertain outlook has affected consumer markets and the associated advertising market which supports the independent regional media. Our member companies consider that digital development is essential. Their digital investments and the rising share of audience and digital advertising revenues are crucial to their future. (See reports published in July/August 2008 by Trinity Mirror, Northcliffe Media Group, Guardian Media Group, Johnston Press, and Archant.)

29. The BBC’s publicly-funded intervention in the regional and local media market at this critical time would constitute very damaging interference and market distortion. Our members have submitted evidence of the strong adverse impact that the BBC’s Local Video proposal will have upon their businesses and their future development.

Longstanding Concerns over BBC Local Expansion

30. The NS has had longstanding concerns about the BBC’s development of its online regional and local activities and their cross-promotion. The industry does not believe that the BBC should use its role as a public service broadcaster to justify its transformation into an all-embracing public sector publisher.

31. The NS and the industry have been given assurances by successive BBC Director-Generals that the BBC should not expand into regional and local newspaper publishing, by design or unsupervised local creep. The BBC should not be allowed to do online, at regional and local level, that which it would not be permitted to do in print on paper. The NS and industry have raised concerns about the detrimental effect of the BBC’s regional activities and aspirations. These issues were detailed in the NS evidence and submissions to the Graf Review, the BBC Charter review and the BBC Trust’s consultations on BBC’s public purpose remits, review of the bbc.co.uk service licence and the BBC Local Video proposal.

32. The NS has also had extensive discussions with the BBC Executive about the proposed expansion of its regional and local activities. In these, it has indicated consistently its opposition to the plans. It awaits an explanation from the BBC as to why its current plans have been pursued and vary from previous assurances given by BBC senior management.

33. The BBC’s Local Video proposal is strongly opposed by our industry due to its proposed duplication of their existing core services and its consequent severe negative market impact upon their development of their own businesses. These problems are not solved, whatever the BBC’s claims to have substantially modified its proposals and to have committed to abstain from carrying certain categories of advertising traditionally found within the pages of the regional press.

34. The lower than expected licence fee settlement and, we understand, the discovery that fixed-time satellite television bulletins prove unattractive to audiences, led the BBC to alter its original plans to drop the local TV service on satellite and concentrate upon the development of broadband and local news services, the areas of competition with the regional press which the NS and its members had made clear were of prime concern.

(The BBC refers to the proposal being ‘scaled back in the light of the Licence Fee settlement and further work on the BBC’s strategic priorities in the BBC Management Assessment of the public value of its Local Video Proposals and the BBC press release October 2007 ‘Local TV services:

“There are no longer plans to put a local TV service on satellite. Instead the focus is on creating high-quality content for the rapidly increasing number of broadband users.

Local online news services: In order to attract new generations of local news viewers, significant investment is planned in developing an online broadband multi-media interactive offer, MyLocalNow, subject to approval by the BBC Trust.”)

35. The NS has stressed the importance of an evaluation and approval process which actually takes account of the individual market impact in the 60 areas, where the 65 new services are now to be made available at the same time.

36. The NS has expressed its concern that Ofcom, for reasons only of time constraints, is not able to examine each local area and evaluate the actual market impact and effect upon the established regional media companies and the services which they themselves have developed in each area.

37. Different market conditions may well apply in the different geographic areas formed by the BBC’s network of local radio stations, plus the new services. The BBC will be launching completely new BBC services into some areas, whether the geographic area has not had a BBC dedicated service such as local radio station and website before, as in Buckinghamshire, Cheshire and Surrey, or a new linguistic service, such as in Wales. These could well have markedly different impact upon the market.

38. The BBC’s current operations are not standardised and vary in range, quality, content and staff. Thus changes to the services resulting from the new service can vary between stations and will inevitably have a different impact.

39. Indeed, how should the new services be characterised - are they local services, or are they a national local service?

40. The BBC describes its ‘holistic’ approach to its news operation, including the new services. Ofcom and the BBC Trust would therefore have to evaluate the impact of the changes that are being made to the BBC’s news, sport, radio news and other services as a whole, both broadcast services and online services, including the annexes to the bbc.co.uk service licences. These need to be taken into account in the PVT as well.

41. This requires consideration of various existing services, whatever the service licence by which they are controlled, and the proposed new service, including the interrelationship between their respective budgets, investment, staff, and content. The digital democracy portal and navigational and technological developments such as mapping, which are all deemed to be outside the scope

of the Local Video Service and not subject to its approval process, require particular attention.

42. This has become of even greater importance as the BBC originally intended to roll out the services in phases across the UK, in different geographic areas and over a period of time. This would have given the commercial media more time in some areas to develop their services and establish their audiences before the BBC’s public-funded intervention. As the BBC management acknowledged, this would also have permitted more specific market impact assessment and public service evaluation of each area at the relevant time, and permission or conditions to be tailored to the actual market conditions in the particular area.

43. No explanation has been given to us by the BBC Director-General for this important change or the reason for the change.

44. The BBC management has yet to hold the BBC Trust-recommended discussions with the NS, on the shortcomings identified by the BBC Trust’s review of bbc.co.uk, which are also very pertinent to the current proposal, concerning lack of distinctiveness, effective controls and policing of restrictions placed upon service licences, budget allocation and controls. Our members have also shown how linking, poor though it has been, is not an effective way to counteract the BBC’s attraction of audience away from our members’ sites and hence the revenue upon which they depend. We are grateful for the BBC Trust’s confirmation that these discussions can take place during the PVT process.

45. If, contrary to the industry’s submissions, the BBC Local Video proposal were allowed to go ahead in any form, it will be very important that restrictions on the BBC’s local and regional operations, controls over the manner of their operation and budgets, policing and enforcement are consistent and effective.

46. We would expect that express provisions, including specific restrictions (as we have discussed with the BBC management and BBC Trust) would be included in the bbc.co.uk service licence and the relevant annexes, including but not limited to the one to which local news might be allocated. These would have to be backed up by close and effective management supervision and enforcement processes.

Lack of Distinctiveness

47. Our members’ individual responses have provided strong and detailed evidence to rebut the BBC’s claim to fulfil the distinctiveness criteria. The BBC’s proposed duplication of services backed by its proposed cross-promotion across every BBC platform available will of course also be highly relevant to the market impact assessment as well.

48. We are grateful for the BBC Trust’s clarification of the tables accompanying the extract from the BMRB research submitted by the BBC as part of its application (BMRB Report 2008 - BBC Local Video service). This still suggests a significant and damaging effect upon the industry’s audience. It certainly does not support the BBC’s case for distinctiveness - it states that nine in ten adults use a local commercial media source to obtain the sort of information that would be given by the proposed BBC service - ‘news, weather, travel, sport and community related information.’ It also shows how the new service can drain away audiences from our members: a fifth of the UK population claim that they would use each commercial source of information less for news alone if the BBC were to launch the BBC Local Video service and slightly fewer people would use commercial media less for any purpose. It finds that ‘paid-for local newspapers record the biggest negative effect, including less use for any purpose by existing users of local media with broadband access.’

49. The BBC’s research and application is based upon a version of the industry which is out of date. Our members have provided you with an overview of the industry, its digital operations and their future strategy. The industry now reaches its 40 million + audience through 1300 newspapers, 1100 websites, 750 magazines, 36 radio stations and 2 TV stations. This combination is necessary to layer their local markets, extend audience reach and deliver advertiser response.

50. You have received a huge variety of examples of the online services which are already being provided, which disprove the BBC’s claims that its proposed services will provide anything original or different.

51. The NS and members do not accept the BBC’s claim that its proposal is ‘regional’ and therefore is distinctive from and will not compete nor take revenue away from their commercial services.

52. The NS has already supplied the BBC Trust and Ofcom with a spreadsheet showing the main flagship regional press websites (largely daily newspaper sites or big county sites covering two or three titles) which appear closely to match the footprint of BBC Local areas. Of these 100+ sites, the NS has also provided short summaries of a selection of 12 from across the UK (geographic/publisher mix) with traffic figures, screen grabs etc to provide a flavour of their main features. We refer you to our members’ individual submissions for further information.

53. These 1100 websites and associated online services cover different geographic areas: nations, regions, counties, cities, towns, urban areas and rural areas. They all already carry the news, sport, travel and weather services which the BBC wants to develop. Audio-visual material is integrated into these services. User-generated material, blogs, mobile services and interactive media are very natural developments of the relationship between our local media and their

audiences, since they have always had direct and close communication. The industry is exploring and using all possible means to deliver the content which people want, where, how and when they want it.

54. The NS and its members have explained how the BBC’s proposed services will both resemble and compete with the industry’s local, hyper-local and individual audience services. We also refer you to comments within the BBC’s application documents which show that this is how it will be perceived by the BBC’s audience - no doubt re-inforced by the BBC’s promotion and cross-promotion of the service. The research also anticipates that our members’ local newspapers and the stories that their journalists have produced will drive traffic to the BBC site:

“They [the BBC’s proposed service] are seen to provide more in-depth coverage of individual stories and wider range of stories in many locations to the depth and range provided by local newspapers. Individuals of all demographic backgrounds were able to find at least some stories that interest them, even if for some younger males this is only sports stories. This is seen to be the beauty of the proposition’s offering: personal choice at a local level.” (Opinion Leader Public Value Assessment of BBC Local Video, Report prepared for the BBC, February 2008.)

“I am really sold on the map. It takes out the hassle of looking for it and you can literally pin point where you want to go and that’s it, I mean it doesn’t get any easier than that does it really.” [Opinion Leader]

Human Capital’s review of the BBC’s distinctiveness noted that “the development of mapping technology, increasing the local relevance of content and the effective integration of video are areas for development.”

“The frequency of visiting BBC Local Video is perceived to be affected by the news stories currently featuring in the local press at the time as people might be more likely to go to BBC Local Video if they see a story of interest in local newspapers or on the local news.” (Opinion Leader)

55. The NS and its members have also explained why the BBC’s suggestion of upper limits on story counts would not neutralize the impact of the service.

56. The upper limits would be completely ineffective controls. They are retrospective, as compliance will be judged by volume and duration averaged out over a year. They are meaningless and capable of seemingly infinite exceptions, given that none of the following will count towards the upper limit: continual update on any story during any 24-hour period, unaided user- generated content, live streaming, and exceptional circumstances, from flood to election. Services in London and Wales are to enjoy far higher upper limits of story count and duration (with a ‘double’ service in Wales with the English and Welsh services covering different stories or providing different treatments, to their respective upper limits) and budget. The BBC’s application documentation suggests that the BBC does not regard these limits as a restraint upon the service but rather as the optimum for an audience at which it is aimed:

‘‘The range and depth of stories presented as possible with the new video offer, are felt to be ideal’ (Opinion Leader). ‘There is little appetite for an increase in the amount of video content beyond the proposed number of local video stories.’ OLR 2008, BBC Management’s assessment of the public value of the BBC Local Video Proposal.

57. In addition, the BBC intends that content can be accessed and personalized into a truly local news and information service, tailored to any particular individual with the assistance of site navigation including geotagging, interactive maps and information supplied in response to the user typing in a post code (p15, BBC Management’s assessment of the public value of its Local Video proposals). The NS and its members have expressed their deep concern about this aspect of the BBC’s service, how it duplicates regional media and how it will have an adverse effect upon the market for those regional media’s regional and local audiences and services.

58. This is one of a number of areas of overlap with our members’ services, which could have a market impact upon our members’ businesses, but which do not directly fall within the BBC Local Video assessment.

59. The NS has asked for information to be supplied by the BBC for the purpose of the MIA and PVT about the precise budgets, specific details of proposed expenditure broken down by service, service content definition and service licence controls. (See appendix of meetings, etc.) This includes information relating to the related services which the BBC Trust has said are outside the scope of the PVT assessment and are not reliant upon the approval of the local video project, although the project will be assessed in the context of these developments:

• BBC’s proposed development of user generated content; • the bringing of BBC local sites in Scotland and Ireland into line with the current provision in England and Wales; • the improved search, navigation and site architecture, including a greater use of map-based technology, for which new investment above the baseline budget will be available, are outside the scope of the PVT assessment of the Local Video service and are not reliant on the approval of the local video project.

60. These are all aspects of the BBC’s expansion covered by the BBC Trust review of bbc.co.uk statement that ‘BBC management also proposes to enhance the local and nations’ sites in 2009.’

61. Obviously, our members will be affected by the potential impact of the ‘enhancement’ of the sites as a whole, in addition to the broadband services. The NS therefore repeats the points that it has flagged up to you before: that an important area for consideration in the MIA and PVT as a whole will be the interrelation between the proposed BBC Local Video service and the bbc.co.uk service, including implementation of the bbc.co.uk review’s conclusions and other related services and service licences.

62. This includes information about changes to the services; what additional resources will be made available and how they will be allocated between the different services and their respective budgets; what those budgets will be; what and how resources will be apportioned between different radio stations, websites or other services and for what purposes, especially where the BBC intends to ‘bring them into line’ or start from scratch; the cumulative effect of budget allocations between services, activities and geographic area; the precise controls and restrictions placed upon the BBC - and the operational safeguards put in place that would actually ensure their effectiveness in day to day local practice - which ought to be imposed by the service licence and annexes; the annex to which local news will be assigned; the nature and effectiveness of new BBC management controls; and the outcome of the BBC Trust’s request that the BBC responds to the Newspaper Society’s concerns about the lack of distinctiveness of bbc.co.uk in local media, given that it is an area well-served by commercial providers.

63. The NS and members are very concerned by the BBC’s complete disregard of the industry’s identification of its existing and future core editorial activities in its discussions with the BBC. Worse, the BBC then cites these areas in justification of its expansionist proposals.

64. Our members have explained the role of user-generated content in their services and their future development. This includes its importance to local and regional news coverage, debate and analysis of community, local and regional affairs, features and entertainment. The BBC proposal fails to spell out the effect of its proposals for user-generated content and how this will compete with our members’; that this will not be original or distinctive since our members are already using and developing their services; that this will be a source of ultra-local, local and regional news and material capable of being accessed as such by any member of the audience and thereby drawing such audiences to the BBC rather than commercial media; that the BBC have deliberately excluded BBC unaided contributions from their ‘story count’, thereby rendering these meaningless.

65. We suggest that Ofcom and the BBC Trust should also consider the BBC’s ‘digital democracy portal’ since this intended to enrich its coverage of the UK’s political institution, including the Scottish Parliament, Welsh Assembly, Northern Ireland Assembly ‘as well as, over time, local government institutions’(BBC’s response to Network News Report BBC Management Response and Action Plan Trust Impartiality Report: Network News and Current Affairs Coverage of the For UK Nations). This is to offer live, on demand and searchable audiovisual coverage, complemented by other information and analysis.

66. BBC Management’s assessment of the public value of its Local Video proposals states that relevant video stories will link where appropriate to the websites of local government institutions, including to live streaming of key proceedings.

67. This service will not be distinctive. Regional newspapers already investigate, report, analyse, explain and comment upon national, regional and local government and public authorities with particular reference to the relevant regional audience. They employ a number of political correspondents based in Westminster, in addition to specialist correspondents. Tribute to their role as ‘the backbone of local democracy’ has been paid to them inside and outside Parliament. This has always been a key area of the regional media’s work - indeed the NS and regional press led the successful campaign against the government’s proposals to shut out press and public from local government meetings and decision-making.

68. Our members’ political coverage exploits the possibilities of new media: it now includes webcams of local authorities’ meetings, election coverage, online interviews and interactive question and answer sessions with local MPs. The NS and individual companies have emphasised to the BBC that such coverage remains an important part of their work. In meetings with the BBC, regional media companies have also explained that this is not merely undertaken as a public service. They explained that such online coverage and interactive interviews are popular features, attracting audiences to their site and the advertising revenues on which they depend. Indeed, local newspapers and their websites are seen by the public as the best means of obtaining information about local authorities and public services (Local Matters, Millward Brown, June 2008).

69. Nor can the BBC claim that its manner of coverage necessitated by its impartiality obligations will differentiate its service from those of the regional media. The regional media’s coverage tends to reflect the communities that it serves, rather than adopt any party political line. The BBC cannot therefore suggest that its intention to devote a large part of its service to national, regional or local political institutions would result in a distinctive service either in terms of content, depth, manner or technique. Nor will its impartiality obligations mark it out from our industry’s approach.

Civic Information

70. The BBC, apparently with backing from the Government (see Communities in Control) is also planning to expand its civic and community coverage in direct competition with the regional and local press.

71. The BBC’s application documentation suggests that it wants to develop and promote its sites as the portal to all things local. This would obviously divert audience from local media sites, which are already performing a similar service.

72. This also undermines the BBC’s claims that the local service will be kept clear of advertising, local government and other public bodies’ publicity and information, community information, listings and other areas from which the regional media derives advertising revenue.

73. It is important that the matters listed at paragraph of 4.13 of the Ofcom/BBC Trust Local Video Public Value Test Description of Services are comprehensively, clearly and firmly excluded from any area of BBC activity. This must be achieved by specific prohibition in all relevant service licences and firm effective controls, properly enforced. BBC activity has seeped into this area before. The regional media long ago raised the problem of radio stations’ swap shops and BBC free local magazine and newspaper publications carrying classified advertising. After the Government asked local authorities not to expand their website activities into areas which competed with local businesses, such as listing information, as a result of concerns raised by the regional press, the BBC Director-General also undertook that the local BBC sites would also stop carrying listings and ‘click through’ to ticket purchase.

74. However, these prohibitions will not be effective unless the BBC is prevented from developing its services into other related areas as important to regional media revenue.

75. For example, the BBC states that it will not include public notices including planning applications, or compete with recruitment listings, or cinema and commercial listings.

76. Yet the BBC has made clear in meetings and in its submissions that it does not intend to impose any limitations on any local service’s ability to link to whatever sites it considers interesting in any locality. This includes more specific links to particular information, sites or service provided by public and commercial bodies. This would compete with our members’ existing and revenue-earning commercial and editorial relationships.

77. The BBC’s submission to Ofcom’s public service review states that the BBC intends to collaborate with others who provide internet related services such as ‘improving findability for third party content’ on ‘access to local services; job centres; transactions with government; or access to public institutions websites such as those of galleries and museums.’ The BBC also says that it wants to develop its relationship with the Highways Authority. These are examples of collaboration, some in the areas of recruitment, entertainment and public notices, which could undermine the public service coverage provided by local commercial media and the advertising revenue upon which it depends. There is a danger that the public bodies will also claim that a BBC link would satisfy statutory or other publicity requirements. This would encourage public bodies’ preference to rely merely upon their publicity machinery disseminated through their own websites and media channels, instead of the effective independent regional media and its ability to reach the local community as a whole or particular target audience within it, by advertising or editorial, and enable proper public scrutiny.

78. Nor will the BBC’s suggestion that it will not carry commercial listings provide adequate differentiation and demarcation of the BBC’s activities from those of the regional media nor provide sufficient protection for the regional media’s

advertising revenues. The BBC does propose full coverage of local and regional entertainment and events. This will be in direct competition with regional media companies’ editorial and commercial activities. Human Capital’s review of bbc.co.uk’s distinctiveness states that ‘the delivery of some content (for example local area listings) is close to that provided by local newspapers, and other sites make better use of video content’.

79. The BBC Local Video proposal is silent on sponsorship agreements. Any BBC sponsorship activity would again directly compete with the regional media’s commercial activities, including sponsorship revenue. In view of the recent statement by the Director-General that commercial sponsorship of programmes will cease once existing contracts expire, we would expect that similar prohibitions should be applied across the BBC’s activities, including all regional and local online services. We also believe that the BBC’s own intentions as to pursuit of regional and local sponsorship and other similar commercial relationships should be examined as part of this assessment. The BBC’s cross-promotion of events which it sponsors is tantamount to direct advertising.

Sport

80. Our members already provide comprehensive regional and local media sports coverage, from the grassroots - junior teams and schools - to Premier League, through their editorial and commercial activities. The BBC’s proposals to concentrate upon sport therefore again duplicate existing services and threaten commercial revenues.

81. There is also a danger that new exclusive arrangements could be negotiated as a result of the new BBC services between the BBC and sporting bodies or regional and local teams. These may be encouraged by the BBC’s existing national sports rights arrangements, combining exclusive coverage and its ability to offer unrivalled cross-promotion of the activities in which it is involved.

82. Indeed, the BBC has already indicated that it intends to develop its relationship with the Football Association. This could result in disruption of editorial and commercial arrangements between the local and regional press and local clubs and sports bodies.

83. It could also encourage more attempts by the football and other sports authorities to fortify their negotiations and exclusivity of deals on broadcast or online rights concluded with broadcasters, to the detriment of the independent press which are not party to such arrangements. For example, these bodies and venues already attempt to impose tight controls upon non-broadcast national media’s reporters and photographers’ access to matches, press conferences, interview opportunities, to curtail the non-broadcast national media’s editorial and commercial use of its reporters’ material, across its print and online activities - and have even attempted to regulate its actual control.

84. We note that the BBC specifically excludes sports material from its offer to make its audiovisual content freely available to all third parties.

Partnership

85. The NS and the industry do not accept the BBC’s suggestions that its offer of partnership either make its BBC Local Video service distinctive or could counterbalance the negative market impact of the proposal. 86. The BBC said that it could not replicate the depth of local news generated by the local press and so it originally pitched ‘partnerships’ as a way that its proposed services could benefit from the local newspapers’ journalism. When questioned as to whether the local newspaper could expect to be paid for its provision of copy, the response varied between statements that this would be forbidden to speculation that the usual ‘stringers’ rates might apply’.

87. One or two of the BBC’s past and future so-called ‘partnership’ proposals simply boil down to propositions that the BBC should actually acknowledge the newspaper titles as the source of stories which the BBC discuss or otherwise use on air or online.

88. The BBC cites a few examples of what it considers to have been ‘partnership arrangements’ with local and regional newspaper companies during the Midlands Project. We suggest that Ofcom and the BBC Trust should approach the newspaper companies concerned for their views on both the substance and outcome of the claimed initiatives. We are unaware of any support from the industry for the BBC’s Local Video Service based upon the prospect of partnership opportunities with the BBC.

89. Our members have commented individually upon the BBC’s offer of its material to third parties. There are concerns that the BBC could simply exploit this as yet another way to promote its own service. The BBC’s offer of free material might undercut the commercial sector. The BBC might be merely helping content aggregators and others establish regional and local commercial services, including advertising services, in direct competition with the regional industry, but free of any of the costs of journalism and content origination borne by the industry.

90. The proposal for a very modest community fund is also unlikely to benefit the industry. It could develop into yet another example of rival media subsidised from public funds. In this case, it would be the combined force of a publicly- funded BBC subsidising our industry’s regional, local and community competitors.

BBC Local Video Proposal Cannot Be Viewed in Isolation

91. The regional and local newspaper industry traces its history back some 300 years. As members’ submissions to this consultation demonstrate, the industry

is adaptable and innovative, while maintaining the audience and trust that it requires to remain at the heart of its local communities.

92. It is important that media policymakers do not take the regional press for granted or fail to think through the impact and consequences of proposals upon the regional and local media industry.

93. There is a danger that the regional press is seen only as an adjunct to broadcast policy in a converging media world. Regulatory controls still unnecessarily restrict its acquisitions and mergers on plurality and competition grounds. Yet its public service credentials are so taken for granted that it is preyed in aid by the other media with which it competes. Ofcom has acknowledged that radio concerns often seek partnerships with local newspaper companies, in order to bolster their local credentials. Ofcom has also suggested that the survival of local television news might depend upon its links with local newspapers, perhaps in conjunction with local broadband services (New News, Future News). The BBC tries to justify its expansion into the regional and local area by claiming that its service will be inferior to the breadth, depth and range of the industry’s services.

94. The Government and Ofcom must consider the cumulative effect of imminent decision-making and future media policy upon the regional media and take account of the industry’s views.

95. Ofcom’s assessment of the potential market impact of the BBC’s Local Video proposal must consider the potential effect of any decisions that it will be making this year and next, which will have an impact at the time of the BBC’s proposed development of the new service.

96. The Government’s White Paper ‘Communities in Control’ says that a strong and independent media is vital to democracy. However, it then proposes to subsidise the internet development of community media, with support from PSB broadcasters. It congratulates the BBC on its public service commitment to expand into this area. It encourages local government and public bodies to by- pass the independent media’s editorial and commercial services. No mention is made of the role of the regional and local press or consideration is given to the implications for plurality or the market impact upon the industry.

97. The combination of assorted Government departments’ proposals could bolster public subsidy to some news providers; enable and encourage local government to withdraw advertising from independent news providers; encourage local authorities to establish their own news channels, subsidised by public funds and third party advertising, taking both audience and revenue away from the independent commercial media.

98. Various proposals from DEFRA, DCMS, BERR and the Cabinet Office appear to give little consideration to the detrimental effect of such proposals upon the importance of local plurality. They fail to consider

the long-term consequences for the information of the local community, the existence of a free press, independent of the state, at national and local level; the transparency, accountability and independent scrutiny of public bodies; nor upon the market impact upon the commercial media, which plays a vital role in local democracy. Public bodies’ media activities and plans need to be carefully considered in the course of the review of media ownership rules in the Communications Act 2003 and review of local government publicity codes. The BBC’s activities should also be carefully considered and relevant controls placed on its regional and local editorial activities, partnerships, funding and links, as well as restrictions upon its commercial relationships.

99. The next stage of Ofcom’s review of public service broadcasting and content (digital media) is awaited, with decision in 2009, directed at the highly relevant issue of how public service broadcasting and digital media ‘could thrive in the future’ and ‘the implications of this for the whole of the UK - locally, regionally and for each of the UK’s nations’.

100. All four of Ofcom’s proposed potential models for the future of public service broadcasting and content and all four of Ofcom’s proposals for the ways to fund each of them would have competitive and commercial impact upon the regional and local media industry.

101. The Digital Dividend Review and the outcome of Ofcom’s latest consultation, which could lead to the launch of new local services throughout the UK, is obviously of great relevance to the regional media.

102. The industry could also be affected by Ofcom’s forthcoming statement upon Next Generation Access and the regulatory implications of geographic variations in rollout; whether EC deliberations on Universal Service Obligations lead to proposals for its extension to broadband; and the implementation of the EU Audiovisual Media Services Directive and what implications it might have for our members’ digital services.

103. The industry will also be affected by the conclusion and implementation of Ofcom strategy on the future of radio, including local cross-media ownership controls and the implications for sustained provision of local radio services in the light of the switch to digital.

104. Finally and importantly, the industry is keenly interested in review of the media ownership regime. Ofcom will presumably be conducting its statutory review in 2009, as the Government also considers what changes should be made with the assistance of the DCMS/BERR Convergence Think Tank. Ofcom should review the OFT’s role in media mergers, particularly the effect of its outdated approach to market assessment upon regional and local newspaper merger and transfers. The system governing newspaper mergers and transfers, national, regional and local requires improvement and must be reviewed and revised.

105. The NS and companies continue to press for liberalisation of the outdated regulatory controls which govern newspaper transfers and mergers. It is even more important that the regulatory authorities and the competition authorities in particular change their approach and operate in a way that recognises the reality of 21st Century media and advertising markets in which our members operate.

106. The BBC’s proposal provide a graphic illustration of why these changes are necessary. The BBC is relying upon its public funding and freedom of operation which it enjoys under its Charter, both to propose the service in this extensive form at all and also to try to differentiate it from its commercial rivals, while undermining the commercial foundation of its competitors, which are enmeshed in a regulatory framework and denied the ability to compete fairly.

Conclusion

107. The Newspaper Society represents the regional media industry, which reaches audiences of over 40 million adults across the UK via its print, online and broadcast channels. It has 1300 newspapers and 1100 websites, as well as magazines, radio stations and TV channels. Its websites include around 100 flagship sites (regional daily newspaper sites and large, county-wide sites covering two to three titles), which closely match the footprint of the 65 BBC Local sites, with a focus on news, sport and weather and offering video stories and user-generated content as standard.

108. The NS does not believe that it is in the public interest for the BBC to expand from being a public service broadcaster to being a public sector publisher. Furthermore, the BBC should not be permitted to do online at a local and regional level what it has previously agreed that it would be unacceptable for it to do on paper as a newspaper.

109. This submission by the NS should be read in conjunction with the evidence which it has previously submitted, supporting the points made in its discussions with Ofcom and the BBC Trust and the BBC’s Local Video proposal. We also hope that the BBC Trust and Ofcom will ask the BBC to supply the information which we identified as important to a proper assessment of the impact of the BBC’s proposal upon our members.

110. This submission must also be read in conjunction with the strong evidence and detailed information submitted directly to Ofcom and the BBC Trust from companies comprising a very substantial proportion (80 per cent) of the industry. All companies - from major group to independent family concern - point out that there is no market failure to justify state-funded intervention into the regional and local media, that the BBC would be merely replicating local news and related online services already provided by commercial local media, and that the impact of such intervention would be hugely damaging to the local media sector at a critical time in its digital development, thwarting the

deeper, broader and richer services which they would provide to their regional and local communities.

111. The BBC should not be allowed to justify its aspirations for damaging expansion into an area already well served by the independent commercial media, as a response to criticism of its own shortcomings, as an original provider of local and regional news provision.

112. The BBC Trust’s review of bbc.co.uk demonstrated that the BBC’s local news online services offer nothing distinctive and are among the least valued parts of the service. These criticisms were echoed in the review of the BBC’s network news coverage of the four UK nations.

113. The BBC’s proposals contain no effective constraints upon the BBC’s activities and cross-promotion of them sufficient to prevent damage to the industry.

114. The industry is also being asked to trust in the efficiency of BBC’s management controls and oversight mechanisms. To date, these have been shown to be so poor as to permit huge overspend and misallocation of budget in bbc.co.uk to escape unnoticed. The BBC Trust has asked the BBC to discuss with the NS and others how it should improve its management controls, so that it really does confine its activities to those of real public value and distinctiveness.

115. We await these further discussions and meetings with the BBC for it to explain the details of its current proposals, and to explain why they vary significantly from its previous propositions, as outlined by Mark Thompson, to the NS and the industry.

116. We had pointed out that areas such as local and regional news were well served by the commercial sector. Important aspects of the BBC Local Video proposal, highly relevant to its damaging impact upon our members’ services and revenue, have been placed outside the scope of the BBC Local Video assessment. The NS is therefore keen that Ofcom and the BBC Trust take into account these matters and the outcome of any discussions in their assessment of the BBC Local Video proposal, as well as the review of the bbc.co.uk service licence.

117. We look forward to receiving full responses to the questions which we posed to the BBC Trust in July, and which are essential if we are to respond fully to the current process.

118. The impact of the BBC Local Video proposal cannot be evaluated in isolation from the rest of the BBC’s news and online operations.

119. It is important that neither Ofcom nor the BBC Trust view the BBC Local Video service as a mere incremental addition to the BBC’s existing services. It is a major development of the BBC’s activities which will compete direct with our members’ operations in a harmful fashion.

120. This service will ultimately be offered across every BBC platform and will therefore be in direct competition with every facet of any regional newspaper company’s multi-media portfolio, whether mobile, website or broadcast.

121. The BBC can only do this because it enjoys freedom from the media ownership controls and cross-media ownership controls that fetter its commercial competitors. Regional media companies are barred by law from ownership of such a multiplicity of local, regional and national television, radio, newspapers, on plurality and competition grounds. The BBC should not be permitted to exploit the freedom that it enjoys under its Charter which are denied to its commercial competitors, to their detriment. Nor should it be allowed to found any claim to distinctiveness upon this.

122. It is important that Ofcom and the BBC Trust evaluate the BBC’s cross- promotion of the service and the effect that will have upon our industry’s operations. The BBC intends to cross promote the service across every BBC media platform. It will therefore compete directly with our members’ operations, which cannot emulate such powerful cross-promotion. 123. Ofcom and the BBC Trust must evaluate market impact, distinctiveness and public value by reference to the proposals’ overlap with other areas of BBC activity, which are subject to different service licences and different budget elements. Crucial elements of bbc.co.uk which will drive the use of the BBC Local Video will otherwise be excluded from the assessment: cross-promotion across all BBC platforms; functionality-improved navigation including interactive maps - will be a key factor in the service’s threat to local commercial media, yet have been designated as part of the ongoing modernisation of the BBC local provision and will not be affected by the outcome of this assessment.

124. Ofcom and the BBC Trust should also enquire closely into the BBC’s claims of partnership to justify its proposal. To our knowledge, the BBC has not put forward any true joint venture schemes which would prove of long-term mutual benefit sufficient to attract interest from the industry, let alone neutralise the commercial damage which the proposal threatens. We are unaware of any members whose opposition to the BBC’s proposals is tempered by such offers.

125. Government and Ofcom will shortly be making decisions across a range of matters that bear directly upon the provision of local and regional news and information, including media ownership rules. Before doing so, they need to take a considered view of all relevant policy developments and their consequences for the regional media industry.

126. The BBC’s proposal provides a graphic illustration of why these changes are necessary. The BBC is relying upon its public funding and freedom of operation which it enjoys under its Charter, both to propose the service in this extensive form at all and also to try to differentiate it from its commercial rivals, while

undermining the commercial foundation of its competitors, which are enmeshed in a regulatory framework and denied the ability to compete fairly.

Appendix

Appendix 1 – Copy of email from Lynne Anderson: Research & Selected RP Websites Appendix 2 – Background Research Appendix 3 – Excel Spread Sheet listing Key Regional Press Websites Appendix 4 – Selected Regional Press Websites Appendix 5 – Email from David Newell to Ofcom and the BBC Trust 21st July 2008

12th August 2008

Appendix 1 From: Lynne Anderson Sent: 06 August 2008 18:03 To: Daniel Gordon Cc: '[email protected]'; '[email protected]'; 'Tim Suter'; 'Michael Begg'; David Newell; Santha Rasaiah Subject: Research & Selected RP Websites

Dear Daniel,

We thought you might find the background information we recently sent through to the BBC Trust of some interest. We feel this does address issues of distinctiveness/substitutability which are of relevance not only to the public interest assessment but to the potential market impact of the BBC Local Video proposals.

We hope you have received a number of submissions from NS members this week. Our own submission will follow shortly.

Kind regards,

Lynne

Dear Bronwen,

Following our last meeting, we said we’d send you some links to background research on trust, value, and effectiveness of local commercial media, as well as some examples of regional press website features. I’ve attached:

Background research – relevant findings/links from recent research studies.

Key RP websites by BBC area – spreadsheet showing the main flagship regional press websites (largely daily newspaper sites or big county sites covering 2-3 titles) which appear to closely match the footprint of BBC Local areas.

Of these 100+ sites, I’ve provided short summaries of a selection of 12 from across the UK (geographic/publisher mix) with traffic figures, screengrabs etc to give you a flavour of their main features:

BBC Local Area RP Website Publisher

Black Country www.expressandstar.comH H Midland News Association

Bristol www.thisisbristol.co.ukH H Northcliffe Media

Cambridgeshire www.cambridge-news.co.ukH H Iliffe News & Media

Cumbria www.news-and-star.co.ukH H CN Group

Kent www.kentonline.co.ukH H KM Group

Leeds www.yorkshireeveningpost.co.ukH H Johnston Press

Manchester www.manchestereveningnews.co.ukH H Guardian Media Group

Norfolk http://new.edp24.co.uk/H H Archant

Tyne (Newcastle) www.journallive.co.ukH H Trinity Mirror

Glasgow/West Scotland www.theherald.co.ukH H Newsquest Media Group

NW Wales www.eveningleader.co.ukH H NWN Media

NI: Belfast & East www.belfasttelegraph.co.ukH H Independent News & Media

I hope this is useful. Do let me know if you’d like to go through any of it or have any queries.

Regards,

Lynne Lynne Anderson, Communications Director

The Newspaper Society, St Andrew’s House, 18-20 St Andrew Street, London EC4A 3AY Email: [email protected]

Appendix 2

Local Matters Newspaper Society/Millward Brown June 2008

Government and public services

Local media - local newspapers and their websites - are seen as the best means for getting information about the performance of local authorities (75 per cent), far higher than the next highest medium, internet (42 per cent).

Local media (30 per cent) was also seen as the best medium for helping people feel safe in their area, compared to the next highest medium, local radio (19 per cent).

Local media (32 per cent) is the prime source for information about local institutions, services and facilities in a person’s area, ahead of local radio (23 per cent) and the internet (18 per cent).

It is the best media source for:

• Feeling part of the local community • Having sense of pride in the local area • Knowing whether the local area is improving • Feeling safe when out and about • Knowing how strong the local economy is.

Leisure + entertainment

Local media (15 per cent) is the best source of information for people who want to get involved in groups, clubs or societies, ahead of the internet (12 per cent) and local radio stations (8 per cent).

It is also the best media source for:

• Getting to know people in the local area • Taking part in or attending cultural activities regularly

Family – social interaction

Local media is the best media source for information on:

• Supporting charities and other good causes • Spending time helping out or supporting other people • Supporting or helping out with local community activities

Sport

Local media (8 per cent) is the main media source for getting people to take part in sports regularly, (internet 7 per cent, local radio stations 5 per cent). It also prompts more people to attend sports events regularly than any other media.

Recycling

Local media (38 per cent) is the best source of information for people who want to recycle and minimising their household waste, twice as useful as the internet (10 per cent).

All the information relates to both advertising and editorial content. It can be sourced at: http://www.newspapersoc.org.uk/localmattersresearch/media-H implications.aspx H

Press Gazette/YouGov May 2007

Regional newspapers are by far the most popular source of information for people about the area in which they live. Out of a weighted sample of 2,396 adults from across the UK, regional and local newspapers were rated top by 52 per cent of respondents, ore than three times as many as the next most popular choice, BBC TV news (13 per cent).

The information can be sourced at: http://www.pressgazette.co.uk/story.asp?sectioncode=1&storycode=37543H H

the wanted ads Stage I Newspaper Society/ GfK NOP April 2006

• Sixty-five per cent of UK inhabitants say that local newspapers best represent their local area, making the local press four times more relevant than the nearest medium, radio (13 per cent)

• Only 17 per cent of people will skip over ads in the local newspaper compared to the medium with the highest avoidance rate, television (47 per cent)

• Eighty-two per cent of UK residents spend half or more of their time within five miles of their home

• Four out of five local press readers will act on the advertising

the wanted ads stage III Newspaper Society/ TNS Media September 2007

• Local newspapers and their associated websites are 49 per cent more trusted and relied-upon than the nearest medium, commercial TV.

• Advertising in local media (print and online) is nearly 50 per cent more trusted and reliable than the nearest everyday medium, commercial television (39 per cent)

Wanted ads: http://www.newspapersoc.org.uk/Default.aspx?page=1879H H TGI/BMRB 2007

• 23.8 million more UK adults read a regional newspaper (40.5 million) than listen to local commercial radio (16.7 million)

• 10.9 million more UK adults read a regional newspaper (40.5 million) than go to the cinema (29.6 million)

• 9.2 million more UK adults read a regional newspaper (40.5 million) than a national title (31.3 million)

• The number of UK adults who read a regional newspaper is 41.6 per cent higher than the number who read at least one general magazines each month (28.6 million)

• 17 per cent more UK adults read a regional newspaper compared to those who use the internet (34.6 million)

Consumers’ Choice V Newspaper Society/TNS Media 2004

• Local newspapers are the most trusted form of media in the UK, above both national newspapers and BBC TV

• Twenty per cent of the UK population voted any regional newspaper as their most trusted media, 19 per cent BBC TV, 11 per cent national daily newspaper

• Eleven per cent of people said that local newspapers understand their concerns and lifestyle, making them nearly twice as relevant compared to BBC TV (6 per cent)

myuk Newspaper Society/Future Foundation 2003

Sixty-five per cent of people see the regional press as making an important contribution to local identity, a conviction that is spread across the age groups and is most prevalent in areas with the strongest sense of identity.

87 Appendix 3

BBC LOCAL AREA Main websites

Beds & Herts www.bedfordtoday.co.ukH H www.hertsandessexobserver.co.ukH H www.hemeltoday.co.ukH H www.lutontoday.co.ukH H

Berkshire icberkshire.icnetwork.co.uk www.readingchronicle.co.ukH H Hwww.getreading.co.ukH

Birmingham icbirmingham.icnetwork.co.uk www.birminghammail.netH H www.birminghampost.netH H Black Country expressandstar.com

Bradford www.thetelegraphandargus.co.uk www.examiner.co.ukH H ichuddersfield.icnetwork.co.uk

Bristol www.thisisbristol.co.ukH H www.westerndailypress.co.ukH H

Buckinghamshire miltonkeynes.co.ukH H Hwww.bucksherald.co.ukH Hwww.mk-news.co.ukH Hwww.bucksfreepress.co.ukH Cambridgeshire www.cambridge-news.co.uk Cheshire icheshire.icnetwork.co.uk www.thisischeshire.co.uk Cornwall www.thisiscornwall.co.uk

Coventry & Warks iccoventry.icnetwork.co.uk www.coventrytelegraph.netH H

Cumbria www.news-and-star.co.ukH H www.cumberland-news.co.ukH H

Derby www.thisisderbyshire.co.ukH H

Devon www.thisisdevon.co.ukH H Hwww.thisisexeter.co.ukH

Dorset www.thisisdorset.net www.thisisbournemouth.co.ukH H

Essex icessex.icnetwork.co.uk www.thisistotalessexH H Hwww.echo-news.co.ukH

Gloucestershire www.thisisgloucestershire.co.ukH H

Guernsey www.thisisguernsey.co.ukH H

Hampshire www.hampshirechronicle.co.ukH H www.thisishampshire.netH H Hereford &

Worcester www.herefordtimes.comH H www.worcesternews.co.uk www.herefordjournal.comH H

Humber www.thisishullandeastriding.co.ukH H Hwww.thisisgrimsby.co.ukH www.thisisscunthorpe.co.ukH H

Isle of Man www.iomtoday.co.ukH H

Jersey www.thisisjersey.co.ukH H

Kent www.kentonline.co.ukH H www.thisiskent.co.ukH H ickent.icnetwork.co.uk www.kentnews.co.uk

Lancashire www.thiswislancashire.co.ukH H www.lancashiretelegraph.co.ukH H Hwww.lep.co.ukH

Leeds www.yorkshireeveningpost.co.ukH H Hwww.yorkshirepost.co.ukH Leicester www.thisisleicestershire.co.uk

Lincolnshire www.thisislincolnshireH H London www.thisislondon.co.uk thisislocallondon.co.uk icsouthlondon.icnetwork.co.uk

Manchester www.manchestereveningnews.co.ukH H Hwww.manchesteronline.co.ukH

Merseyside www.liverpoolecho.co.ukH H icliverpool.icnetwork.co.uk www.liverpooldailypost.co.ukH H Newcastle www.icnewcastle.co.uk

Norfolk new.edp24.co.uk www.eveningnews24.co.ukH H

North Yorkshire www.harrogateadvertiser.netH H www.yorkshirepost.co.ukH H Hwww.thisisyork.co.ukH Northamptonshire www.NorthantsET.co.uk Nottingham www.thisisnottingham.co.uk

Oxford www.thisisoxfordshire.co.ukH H www..oxfordmail.net www.theoxfordtimes.netH H South Yorkshire

(Sheffield) www.thestar.co.ukH H www.doncasterfreepress.co.ukH H

Shropshire www.shropshirestar.comH H

Somerset www.thisissomerset.co.ukH H Hwww.thisisthewestcountry.co.ukH Stoke &

Staffordshire www.thisisTheSentinel.co.ukH H icstafford.icnetwork.co.uk Suffolk www.eveningstar.co.uk www.eadt.co.uk

Surrey www.getsurrey.co.ukH H icsurreyonline.co.uk www.thisissurreytodayH H Sussex www.theargus.co.uk

Tees www.gazette.live.co.ukH H icteesside-icnetwork.co.uk

Tyne (Newcastle) www.journallive.co.ukH H Hwww.chroniclelive.co.ukH Hicnewcastle.icnetwork.co.ukH

Wear www.sunderlandecho.comH H Wiltshire thisiswiltshire.co.uk

ScotlandU U icScotland

Highlands & Islands thisisnorthscotland.co.uk www.shetlandtoday.co.ukH H Hwww.orcadian.co.ukH www.northern-times.co.ukH H NE Scotland/Northern

Isles thisisaberdeen.co.uk www.eveningexpress.co.ukH H Hwww.pressandjournal.co.ukH Tayside & Central

Scotland www.theeveningtelegraph.co.ukH H icPerthshire icStirlingshire www.thecourier.co.ukH H Edinburgh, Fife & East scotsman.com www.edinburghnews.com

South Scotland icDumfries www.dailyrecord.co.ukH H Glasgow & West

Scotland www.theherald.co.ukH H Hwww.sundayherald.comH Hwww.dailyrecord.co.ukH Hwww.eveningtimes.co.ukH

WalesU U Hwww.walesonline.co.ukH

SE Wales www.walesonline.co.ukH H

SW Wales thisissouthwales.co.uk ThisisSwansea

NE Wales www.eveningleader.co.uk www.dailypost.co.ukH H

NW Wales www.eveningleader.co.ukH H Hwww.dailypost.co.ukH

Mid Wales www.walesonline.co.ukH H

NorthernU IrelandU www.belfasttelegraph.co.ukH H Hwww.newsletter.co.ukH www.irishnews.co.uk

Foyle & West www.derryjournal.comH H

Belfast & East www.belfasttelegraph.co.ukH H Hwww.newsletter.co.ukH www.irishnews.co.uk

90 Appendix 4

SELECTEDU REGIONAL PRESS WEBSITES

CambridgeshireU U www.cambridge-news.co.ukH H Iliffe News & Media

160,722 unique users (June, Nedstat)

The Cambridge Evening News website is a well-presented site which is easy to use. One of the features on the home page is the scroll bar headlines at the top of the page. The local weather can also be found on the home page.

Well-presented video with great production

The website has a number of blogs http://www.cambridge-news.co.uk/cn_news_blogs/H

Other features include messaging boards and forums for reader interaction http://www.cambridge-H news.co.uk/cn_messageboards_home/

Ian Sale, digital editor, Cambridge Newspapers: "We have been developing our online coverage with a number of different features, including increasing the variety of blogs and introducing a special section dedicated to the campaign for improvements to the A14 route in our region following further deaths on the road.

"But we have also introduced video to the site and we can now boast more than 100 clips covering all sorts of events from exclusive live music performances, sport interviews and charity efforts to harder news stories.

"Staff have been given training in the web management system and in shooting and editing video as part of the process of ensuring the workforce has the right skills for the modern media industry.

"The digital service we provide and its success is absolutely vital to the longer term future of the business - but also to the community which we serve."

Norfolk http://new.edp24.co.uk/H H Archant

250,000 unique users (Omniture)

The Eastern Daily Press website has sections tailored to suit the needs of readers. Features included are:

Video used as a supplement to news content

Farming News – All the latest information on the local farming industry http://new.edp24.co.uk/content/farm/H H

Frontline – exclusive news on local army regiment

My Norfolk – community focused section

Blogs - http://new.edp24.co.H uk/content/blogs/ H

Forums - http://new.edp24.co.uk/cs/forums/H

Also included, sport content that includes all the big teams in the area and all the local sport. ‘Fan’s eye’ is an interactive section in which Norwich City fans can voice their opinions and have their comments published.

http://new.edp24.co.uk/contenH t/commentary/FansEye.aspx

Ian Davies, director of business development, Archant: “The Archant web sites are about to undergo a major redevelopment which will make it easier for them to offer many of the things the company has been planning and introducing for the past 18 months.

“The purpose of the sites is to deliver our traditional brands through a growing and interactive medium. The sites will retain the trust, quality, and integrity of our newspapers and turn our news offering into a live content environment offering text, pictures, graphics, audio, moving pictures, and mapping.

“The future of our news brands is a combination of print and multimedia web with each doing what is capable of doing best. Breaking stories, interviews, action, are all best handled with the web as the primary focus. Background, depth, and stories of a reflective nature will sit better in print.

“Although the balance between print and web is changing, and will continue to change, our news brands, and our advertisers need both. Damage one and you damage the core of what a 'newspaper' now is. Audiences to our brands are growing but it is the combination which delivers this growth. Ten per cent of our audience is now digital.

“If regional newspapers fail in fully integrating web into a genuine multi-channel/multimedia environment their future will be severely limited. Our brands generate advertising revenue because they deliver a broad local audience. If this proposition is damaged and the audience is no longer 'mass' the rationale for local advertisers is eroded.

“Archant operates fully integrated web sites with editorial teams working across print and web. This allows the web to be better resourced than would be the case with a small number of dedicated individuals. Investment in the redeveloped web sites is significant with systems, people and training.

“The total investment in the development is likely to be multiple millions. Within this overall expenditure the amount spent on video alone is likely to be modest compared to the £23m the BBC is investing each year for a team of six for each local service. The revenue potential simply doesn't justify this level of expenditure on video for a newspaper covering the same areas as one of the BBC local sites.”

North East/North West Wales www.eveningleader.co.ukH H NWN Media

92,460 unique users (June, WebTrends)

The Evening Leader website provides extensive coverage of news and sport content from North Wales. Features include:

Weblogs for reader interaction

A community sub-site highlighting websites of interest run by members of the local community.

Email bulletins that keep readers up to date.

Exclusive video content including interviews with reader questions.

Your news section – A selection of news stories sent in by readers and displayed on the website

Christian Dunn, digital editor, Leader and Cheshire Publications:

Any new features recently put on/to be put on sites? “The Evening Leader is constantly adding and news sections and initiatives to its site. Some of the latest ones have included, a readers’ picture section, readers’ YouTube section and a page with a Twitter feed embedded into it, allowing senior reporters to update the section from live events via their mobile phone.”

How are your site/s fitting in with print product?

100

“The Evening Leader is trying to move away from thinking of the website and newspaper as separate entities. In an editorial aspect both are just a way for our journalists to report the news to our audience. “Because of this both the website and the newspaper constantly link back to each other. The website provide the platform for the Evening Leader to present multimedia content while the newspaper gives us the opportunity to condense long-running stories and print the wide selection of user-provided content we receive. “In fact user-produced content often creates exclusive stories which we would almost certainly never have got by relying on traditional news gathering skills.”

How important is the website in terms of your whole operation? “Our websites are becoming increasingly important to our operation as for the first time in many years our news is reaching an increasing audience. Despite a decline in newspaper sales - which has reduced since the launch of our new websites – more people than perhaps ever before are reading the content of the Evening Leader when sales and website visitors are combined. “The websites are also providing us with increasingly important revenue opportunities. The websites also provide us with content for the newspapers, through user generated content.”

What investments have you made in the website – training, recruitment, cash? “The Evening Leader has recruited a digital editor and invested in a website template and hosting. Some technology, such as digital cameras, have also been purchased. However, compared with the launch of a print product overall investment has been modest.”

Do journalists work for both print and online –integration? “All journalists and photographers now produce content for the website as well as the newspaper. If any type of breaking news story occurs, such as car crash, the reporter will write it up and it will be posted online within minutes. “By encouraging user commenting on certain breaking news stories we are often able to run a similar story in the next day’s paper with more detail, or with a different angle to it. Reporters will often provide additional copy to go with a story that appeared in print – as there is limited space available to them. “Whenever this happens the web site is flagged up at the end of the print article. We have found that photographers are keen to produce videos alongside their stills to illustrate a story, and take more pictures than they normally would for an online slideshow. This integration did not take place overnight, and still needs development.”

101

Black Country www.expressandstar.comH H Midland News Association

315,368 unique users (April, ABCe)

The Express and Star website is an easy-to-navigate, clear and well-presented website. On the home page you can find current affairs polls and a ‘most commented’ box linking to stories most commented on by users.

The site has well-produced and relevant video with links to attach video to blogs and share with friends

http://www.expressandstar.com/video/H

102

A Community Section includes several blogs http://www.expressandstar.com/archive/community/H ,H and picture

galleries http://www.expressandstar.com/arH chive/news/prom-pictures/

There is extensive sports coverage with the ‘Sporting Star Live’ which is a live match day service with video, text,

and blog bulletins http://www.expressandstar.com/2008/04/24/H behind-the-scenes-at-the-sporting-star/.H

103

There is also a blog for each local football team http://www.expressandstar.com/archive/sport/blogs/H ,H

Fantasy Football http://expressandstar.fantasyleague.com/H ,H and local Sunday and youth football

scores http://www.expressandstar.com/aH rchive/sport/local-results/.H

104

The site contains a petrol prices section http://www.expressandstar.com/H petrol-prices-for-our-region/,H

And a weather section http://www.expressandstar.com/weather/H

David Ratcliffe, new media manager, Midlands News Association:

Any new features recently put on/to be put on sites? “An enhanced video player was recently added to the sites. We will shortly be launching an Entertainment channel that will be rich with local events from pub gigs through to theatre and major act concerts.”

How are the sites fitting in with print product?

105

“Our websites are a natural extension of our print product and deliver the ideal platform for communication with our readers, whilst having an appeal to a non-print audience too.”

How important is the website in terms of your whole operation? “The websites are critical to our business as we evolve into a multimedia business with a dominant reach in the Black Country & Shropshire.”

What investments have you made in the website – training, recruitment, cash? “Investment in our web operation has been made at every level. We've invested in commercial partnerships, employed best of breed technologies, and recruited a dedicated team of Internet professionals ensuring that we stay ahead of the game and can bring users a rich and interactive online experience.”

Do journalists work for both print and online –integration? “Most of the newsroom’s efforts are concentrated on the print product but a large number of staff also work with the online journalists to produce cross platform material, such as video and audio content. In addition to the trained video journalists, the newspaper photographers shoot news video clips for the web.”

106

Kent www.kentonline.co.ukH H KM Group

148,456 unique users (January, ABCe) 222,331 unique users (June)

The Kent Messenger website which covers all Kent Messenger Group titles has very well-presented stories. Video news is on the home page and provides a great quality video news service, well presented and produced.

As well as covering the whole of Kent, the site also provides news by district.

107

Sports coverage gives comprehensive coverage of Kent.

The website is also linked to the Kent Messenger Groups radio station http://www.kmfm.co.uk/H

108

The site also has a ‘speak out’ section for reader interaction: http://www.kentonline.co.uk/speakout/H

Traffic and travel section: http://www.kentonline.co.uk/travel/H

Simon Irwin, editorial director, KM Group:

Any new features recently put on/to be put on sites? “During the past three months we have launched eight new sites:

www.kentmessenger.co.ukH H

www.medwaymessenger.co.ukH H

www.kentishgazette.co.ukH H

www.kentishexpress.co.ukH H

www.gravesendmessenger.co.ukH H

www.dartfordmessenger.co.ukH H

109

www.timesguardian.co.ukH H

www.thanetextra.co.ukH H “These are local sites to reflect our local titles with the same names (with the exception of timesguardian which is a shortened version of the newspaper title, the Sheerness Times Guardian). This is a considerable expansion of our offering online and is our contribution to ‘ultra local’ news coverage in addition to our regional site Kent Online which covers exactly the same area as the proposed BBC offering and has done since 1998. “We have considerably uprated our video offering and introduced more audio and interactive features on to all our sites. We have further developments planned which will allow for much more user interaction and ‘personalisation’ of the service we offer as well as better functionality.”

How are your site/s fitting in with print product? “As stated above, our new sites fit in with our print titles exactly. They cover the same area as their sister newspapers. The exception is Kent Online which has no matching print product although that is something we consider on a regular basis. We aim to build on the considerable brand strengths of our core titles and use this to get very much closer interaction with the individual communities in our region. “Our commercial offerings for jobs, motors, property and free ads are accessible through the new local sites, Kent

Online and through their own URLs www.kentjobs.co.ukH H www.kenthomes.co.ukH H www.kentmotors.co.ukH H

www.kentfreeads.co.ukH

“We also have websites that reflect our local radio stations. These are accessible through www.kmfm.co.ukH H Again, these are also accessible through our regional portal Kent Online.”

How important is the website in terms of your whole operation? “The websites are very important to our whole operation in that we see digital as being an integral part of the future of our company. Clearly, the internet is a growing medium both in terms of commercial activity and audience and, as media providers in Kent, we need to have a strong web presence. “We do not see our internet activity as a stand-alone activity, sitting alongside press and radio. In future, we see ourselves as offering a seamless multimedia service to consumers and customers ie what they want, when they want, where they want. We will offer our advertisers a solution to their marketing needs and we will give our consumers the information they want in any way they want. “We have also commissioned detailed market research (by Ipsos MORI) for the region which will give us detailed local audience penetration stats for all our local media and will give us a common currency to use. “This will show us the complete range of press, radio and web audiences broken down by individual community. We aim eventually to offer seamless, integrated, multi-media services across all local media channels. We believe we have to do this in order for our business to survive the transition into a multimedia world.”

What investments have you made in the website - training, recruitment, cash? “We have made considerable investment in the website already in terms of investment in hardware, technical staff and journalists and we plan ongoing training for our journalists and an intensive training course for our commercial staff in selling our multimedia operation over the next six months. Over the course of the past 12 months alone, we will have invested at least £800,000 in our websites. “We have also restructured our organisation to apply greater resource in technical, editorial, and commercial skills, refocused more intensely on local communities, and are investing in the process of cultural change within the company; we need to stop being a ‘newspaper-plus’ culture and move to being truly integrated. “This involves considerable management development work as well as investment in multi-media training in all functions. We are also investing in new systems structures which will allow seamless integration of our content management processes, both editorially and commercially.”

Do journalists work for both print and online -integration?

110

“Most of our journalists work for both print and online and increasingly for radio too. This is much more than using the same stories from print on our web sites or reading them out on air. We tailor news stories for the appropriate media. It means that in many cases we do multiple versions of the same story. Our editors are responsible for their newspaper titles, their websites and for providing news for the radio staff to choose from. “We have certain individuals, for example, the internet editor who is in charge of Kent Online, who have no official direct input into other media but these individuals still share stories with other media in the company. The internet editor, for example, sends stories to our radio stations and newspapers on a regular basis. “Ultimately we aim for all our journalists to be ‘media-neutral’ so they can focus instead on content distributed via a range of media to our audiences.”

111

Cumbria www.news-and-star.co.ukH H CN Group

106,696 unique users (Nedstat)

The News & Star website has well-presented menus and stories. A ‘most read’ box can be found on the home page.

The site has a comprehensive local weather section http://www.newsandstar.co.uk/local_info/weatherH

112

Video http://www.news-and-star.co.uk/news/1.128860?resourceView=video&index=1#videoH

Extensive coverage of local sport and the local professional football team http://www.newsandstar.co.uk/sportH

113

Local rugby match highlights

http://www.newsandstar.co.uk/sport/town/match_reporH ts/1.128254?resourceView=video&index=1#video

Opinion section to giving readers the opportunity to comment on stories

http://www.newsandstar.co.uk/opinionH

Nick Turner, head of digital content development, CN Group:

“All our newspaper websites have recently been upgraded following a significant investment in a new content management system. Popular new features include picture galleries, comments on stories and improved video content. “The new content management system allows our journalists to have direct control over the design and content of the website rather than relying on technical back up team. This allows them to continue with our tradition of online excellence and innovation.

114

“The News & Star has been twice shortlisted in the best newspaper website category in the UK Regional Press Awards and won an award for the best use of citizen journalism when it was the first regional newspaper to allow readers to blog on the site.”

“We are now launching a new range of hyperlocal websites for communities around Cumbria, the first of which can be seen at Maryportlocal.co.uk. We aim to have around 40 of these sites for small towns and rural communities and allow community members to add their own content (a community policewoman in Maryport is using it to tell residents about her work each week, for example). “Public information supplied by regeneration partnerships, councils and Cumbria Tourism is being added to the sites free of charge. Free training for residents with an interest in promoting local groups or contributing to the sites is being provided in conjunction with the University of Cumbria.”

“Increasingly our websites are becoming an extension of our newspaper brands rather than just an online version of a printed product. By this I mean that readers will use the website to interact with the paper, submitting pictures, adding their comments to stories or taking part in online surveys or votes. “The website is an update of the paper and feeds content back into the printed product. 300 people commented on airport plans in one weekend, for example and their views were then printed in the paper. In commercial terms our websites are becoming an increasingly key part of our business and we have seen significant growth in online revenues.”

“Significant investment has been made in our new content management system and other software needed to ensure our online services remain up to date eg new classifieds delivery. “A lot has also been spent on training of staff. This has taken the form of an in-house training programme for all journalists of around half a day in basic web editing and residential courses for six staff at an approximate cost of £3,000 each. “Video content has required investment in camera equipment and editing software for all our publishing centres. All our journalists have had to acquire new skills as we’ve integrated our print and online operations.”

115

Glasgow & West Scotland www.theherald.co.ukH H Newsquest

600,000 unique users (internal measurement)

The Herald website, which covers Glasgow and the West of Scotland, includes:

A ‘live updates’ section keeps up-to-the-minute news, sport, and entertainment stories

116

Video content adds to stories

Blogs to cover several areas of reader interest

Tom Thomson, group managing editor, Herald & Times Group:

“The Herald & Times Group, which owns The Herald, Evening Times and Sunday Herald newspapers among other publications, believes a proposed BBC local video service would threaten its digital future by undermining

117 unique features of these Scottish titles. Our brands stand for expertise in local Scottish news and, for the Evening Times, specifically in West of Scotland news. “BBC Local Video will be an immediate threat to the group’s audience and hence to the digital revenue on which the future of this company and diversity of media coverage and opinion in Scotland is based. “Clearly, large volumes of local or regional video allied to the enormous resources and brand strength of the BBC will be damaging. The ability of the BBC to cross promote this coverage from the main BBC site, radio and television will provide competition with which we cannot compete without investment far beyond the scope of the private sector. “The site will shortly be relaunched as a combined Herald/Sunday Herald site with breaking news and many advanced features. The site complements the Herald newspaper with cross promotion from web to newspaper and vice versa. The site is critical to the future of the business. “We have invested substantial amounts in new production technology, search engine optimisation, software and equipment such as video cameras and audio recorders. We have also undertaken substantial amounts of training in everything from web writing to presenting, shooting and editing video. “Herald text journalists work for both print and online and non-text staff (pictures, video etc) are in a common pool which services all the group’s titles.”

118

Leeds www.yorkshireeveningpost.co.ukH H Johnston Press

260,708 unique users (WebTrends)

The Yorkshire Evening Post website covers all news and sport in and around Leeds.

The website has video to accompany news and sports stories and has regularly updated football, rugby league, and cricket programmes on video.

119

There are community sub sites which go to ultra-local level of news and sport coverage

http://www.yorkshireeveningpost.co.uk/custompages/CustomPage.aspx?pageID=71724H

The site also provides up-to-date traffic news

Other features include a ‘your say’ section http://www.yorkshireeveningpost.co.uk/yoursay.aspxH H and up-to-date local petrol prices.

Paul Napier, editor, Yorkshire Evening Post:

Any new features recently put on/to be put on sites? “The Yorkshire Evening Post website and our associated websites are constantly changing, offering an ever greater service to users. For example, we have just launched our 14th community website

(www.RothwellToday.co.ukH ).H

120

“Features added recently to www.yorkshireeveningpost.co.ukH H include an interactive map of fuel prices at garages in and around Leeds, a section devoted to Post Office closures and a section carrying information on our just launched "Let Us Play" campaign which encourages children to play outside. “The Evening Post site already includes a short weekly video on Leeds United (The Boot Room) and a short weekly video on rugby league (The Sin Bin). We have recently introduced a short weekly video on Yorkshire Cricket (The Pavilion).”

How are your site/s fitting in with print product? “Our sites both complement our print products and deliver material which only has a slight link with what's going into our print products. Readers of our print products will see words in black and white and still images, and are often then referred to our websites for video or video of the same story or feature. Our websites allow us to carry a greater volume of material on a single story/ issue than do printed products. “For example, a big city centre charity run would receive a coverage through several still pictures and a story or two in print, but online there is no real limit to the number of images that can be put up, as well as video and all the results. “Our digital publications also allow for a greater interaction with readers/ users. If a dozen people wish to comment on a story, there are no space restrictions to prevent them doing so (as there would be in print).”

How important is the website in terms of your whole operation? “The websites are an ever-growing part of our operation. Culturally, staff are encouraged to see a story through digital eyes as well as print. What can they now do with stories given that they are freed of some of the limitations that come with print.”

What investments have you made in the website – training, recruitment, cash? “Dozens of the editorial team of the Yorkshire Evening Post - indeed, the great majority - have received some form of digital training. More than a dozen, for example, have attended external video training courses.”

Do journalists work for both print and online – integration? “Yes, they do. The Yorkshire Evening Post has a digital editor and a digital community editor. They are wholly dedicated to non-print activity. However, there are few other staff who do not have direct involvement with digital as well as print. As I write, for example, a member of the reporting team is out doing a story on people trafficking to brothels. He will write that story for our print publication, as he always would have, but he is also carrying a video camera and will provide moving images for our websites. This approach to stories is becoming commonplace.”

121

Northern Ireland Hwww.belfasttelegraph.co.uk H Independent News & Media

625,768 Unique Users (Web Trends)

The Belfast Telegraph provides coverage for the whole of Northern Ireland at a local, national and world level. Features include:

A ‘Breaking News’ section for up-to-date news throughout the day

122

Belfast Telegraph TV – extremely professional, well presented, with high quality content. Headlines four times a

day. http://www.belfasttelegraph.co.uk/tv/H

Local weather Hhttp://www.belfasttelegraph.co.uk/weather/

123

An opinion section with columnists and reader interaction

Community Telegraph provides news by community and extensive sports coverage for Northern Ireland.

124

Bristol www.thisisbristol.comH H Northcliffe Media

Unique Visitors: 218,211 (Intellitracker July 2008)

The Bristol Evening Post’s website is a smooth easily navigated site.

The website has daily video news bulletins and the videos can be viewed full screen

http://www.thisisbristol.co.uk/displaH yNode.jsp?nodeId=227346&command=newPage

125

Sport section

A weather section covering all the local weather

http://www.thisisbristol.co.uk/displaH yNode.jsp?nodeId=145360&command=newPage

126

A petrol station price map to help readers find the cheapest petrol in their area.

http://www.thisisbristol.co.uk/displaH yNode.jsp?nodeId=257293&command=newPage

Promoting user interaction

127

Manchester www.manchestereveningnews.co.ukH H Guardian Media Group

963,585 unique users (June, Google Analytics)

High-quality, well-produced and presented video content integrated into news stories

Video content

128

Link to Channel M News http://www.channelm.co.uk/prograH mmes/index/0/3/channel_m_news.html

Extensive coverage of all local sports teams

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Blog with reader comments http://blogs.manchesteH reveningnews.co.uk/

A ‘your comments’ section http://www.manchestereveningnews.co.uk/comments/H

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Tyne www.journallive.co.ukH H Trinity Mirror

125,780 unique users (Omniture), Dec '07 - May '08 6 monthly average.

The Journal’s website has in depth local news stories and comprehensive coverage of Newcastle United and other local teams and sports.

Video reports and interviews are a key part of the website and they have also utilised YouTube video content

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Blogs and forums promote reader interaction

132 Appendix 5

Edited E-mail from NS to Ofcom and the BBC Trust 21 July plus its two accompanying attachments: NS comments 18th July and BBC Evidence issue- 21st July.

From: Lucy Curle On Behalf Of David Newell Sent: 21 July 2008 11:58 To: '[email protected]'; '[email protected]' Cc: '[email protected]'; [email protected]; [email protected]; 'Michael Begg'; Lynne Anderson; Santha Rasaiah; David Newell Subject: BBC/Newspaper Society

BBC/NewspaperU Society

1. I am grateful to OFCOM and the BBC Trust for the meetings you have arranged with us, and the continued dialogue which we are having. I hope that our comments and views will be taken into account in the Public Value and Market Impact processes, alongside those of our members companies. I am sure that it would be helpful to have a further combined meeting with our member group and yourselves in September.

2. You will be aware of the recent and rapid decline in regional and local media’s revenues which has come at a time when the industry is evolving into a multi-media local news and information business. We would point out that the BBC’s evidence and assumptions are now dated in many respects. We do hope that the BBC Trust and OFCOM will recognise the public value and importance in ensuring that independent, non-government subsidised local news and information networks are maintained. Our member companies employ the journalists which are the foundation of the news gathering process in all nations and regions of the UK. The BBC, along with other media organisations, are reliant on that process, and much of their local and regional news output is derivative of it and is “lifted” from it free of any charge from our members.

3. My email last Friday indicated the information which we believe it is important that is provided either directly from the BBC or from the BBC Trust or OFCOM. This information will, when supplied, help shape our forthcoming submissions to the BBC Trust and OFCOM, as will the outcome of the dialogue we are promised with the BBC, BBC Trust, and OFCOM as part of the bbc.co.uk and OFCOM PSB reviews. We see these as central to the BBC local review process.

4. We have informed you of the discussions which have taken place between the BBC and the Newspaper Society over the last couple of years concerning the BBC’s local plans. These have involved the Director General and his senior team and Newspaper Society representatives and publishers. The BBC gave to us a number of undertakings during these discussions. The BBC has indicated that Mark Thompson would be happy to have a further meeting with us. This would provide an opportunity for the BBC to explain how those undertakings are reflected in the BBC’s submissions to the Trust and would be implemented in the future. It would also enable discussions to take place concerning the issues raised in paragraphs 2 and 3 above. It would be helpful to have confirmation from OFCOM and the BBC Trust that they would be happy for these discussions to take place.

5. I attach for your convenience the information requests you have received from ……. and the Newspaper Society (18th July), together with a list of questions (21st July) which I believe are central to the current process.

With best wishes,

David Newell

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Director

The Newspaper Society | St. Andrews House | 18-20 St Andrew Street | London | EC4A 3AY. t 020 7 632 7411

From: Lucy Curle On Behalf Of David Newell Sent: 18 July 2008 12:09 To: '[email protected]' Cc: Lynne Anderson; Santha Rasaiah; '[email protected]'; '[email protected]'; 'Michael Begg'; David Newell Subject: Newspaper Society comments

Newspaper Society Comments

Thank you for the meeting on Wednesday which was helpful.

We asked for clarification about the bbc.co.uk review process as it relates directly to the BBC Local PVA, and the extent to which the BBC Trust will take into account the OFCOM PSB review process which, in particular, will cover the future funding of local news and information provision.

Some of the issues which we raised concerning the lack of factual information and clarity currently available to us from the BBC are echoed in…recent email exchanges with you.

We are waiting for the BBC to contact us for a discussion on “distinctiveness” following the bbc.co.uk review, details of changes to the BBC financial and management structure as a result of the enormous overspend discovered by the BBC Trust (and how much of this relates to local services) and clarity over how the bbc.co.uk services (especially local services) will be specifically defined as part of the service agreements, and allocated within the BBC structure, and monitored and evaluated going forward by the BBC and BBC Trust.

We asked for details as to what are the existing BBC local services across the 65 service areas, what is the level of individual staffing, investment, and output within these service areas and take up and reach; and where there are variations in content, investment, staffing and performance between the service areas what are the explanations for them. We need to understand what the current baseline is. We then need to have some idea if the additional local services will vary from service area to area. Has the BBC analysed potential variations, taken together with the uneven nature of the existing BBC local services, and will this mean that public value and market impact issues will vary from local service area to area?

The research and submissions provided by the BBC to the BBC Trust do not address these issues. They do not contain within them evidence which demonstrates genuine regional and local distinctiveness, but do point to potential impacts on regional and local media’s ability to deliver local news and information – particularly given the BBC’s unique ability to cross-promote its services and the current evolution in regional and local media businesses. My colleague Lynne Anderson, will send through to you research information relating to local news media and trust and confidence.

David Newell 18th July 2008

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BBCU Evidence Issues

“We are seeing a shift from extensive owned and operated and branded newsgathering organisations to news operations that are based on Public money…”

Mark Thompson, Director General, BBC, 27th June 2008, Financial Times

• What are the public interest consequences of this trend, and will the BBC local proposals contribute to it?

• What evidence is there in all the BBC submissions and consultants’ reports which shows that the BBC new output will be distinctive?

• What evidence is there that it will not attract audiences away from existing and future commercial platforms – in numbers and time spent on them in a way which impacts on their viability?

• What evidence is there that the BBC has imposed effective limitations on its new services which will ensure distinctiveness, erode market impact, prevent unfair cross-promotion and subsidy, and establish to the consumer that the service is not ultra local?

• What areas of news and information (e.g. ugc, sport etc.) are not subject to any restrictions in localness or volume of stories?

• What limitations are the BBC placing on the use of technology (e.g. geo-tagging)?

• What impact will the BBC’s offers of funding, support and content have on the viability of commercial services, and how market distorting will they be?

• Has the BBC lived up to its promises to the industry in our discussions over the last few years and if not in what areas?

• How clear are the activity and funding lines between BBB.co.uk and BBC local? What are the figures in 2004, 2008, 2010 projected to be in funding and is the funding and resulting activity in the 60 plus local areas producing uniform levels of service or will there be variations, and if so on what basis?

(21st July)

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Northcliffe Media

1.U Executive Summary

This document sets out Northcliffe Media Ltd’s submission to the BBC Trust as part of the review process for the BBC’s Local Video licence application. We urge the Trust to take the fullest account of our views and supporting evidence in the Public Value Assessment and in the interim and final conclusions it draws from the Public Value Test.

The Local Video proposal describes a service of substantial scope and power in content, functionality and availability. It would be a massive further encroachment by the BBC into the market for local and regional news and content provision.

It must be seen in the context of the BBC’s significant existing presence in the local and regional media marketplace. The BBC proposal is to “complement its current provision of regional video, local audio and local text news content” (to quote a document assessing the market impact of Local Video, by Human Capital on behalf of BBC Management).

The proposed new service, costing £23m annually at maturity in 2012/13, would build on and be supported by the BBC’s current £100m spend on regional news provision and benefit massively from cross-promotion from the BBC’s multiple audience touchpoints. Moreover, the new service will focus on the core content of regional publishers – News, Sport and Community content – and therefore provide direct competition to our newspapers, websites and other rapidly-developing digital services.

The BBC’s proposals show insensitivity to – or even disregard for – the challenges faced by commercial media in the regions. Our industry is facing the most challenging conditions for decades as rapid changes in consumer and advertiser habits and a severe economic downturn coincide.

Despite declining print circulations and the explosion in media services, the role of regional publishing companies as the leading source of local news and information for consumers and as a marketing vehicle for local, regional and national businesses and organisations has remained robust. We have maintained relevance to local communities, consumers and advertisers by reinventing as multi-platform, multi-media businesses. The public value offered by the increasing range and diversity of local news and information services provided by commercial media must be recognised fully in this process.

The BBC has huge advantages over all other operators in local and regional media. It has used its massive public funding and resources, brand potency, unrivalled distribution network and cross-promotional opportunities to become the most powerful media brand in the world and the leading UK player in television, radio and on the Internet. Now it is seeking to extend that market leadership into the provision of local news and information and to displace local publishers, some of whom have been at the heart of local communities for as long as 200 years.

It is important that the threat to commercial operators from the BBC is seen in terms of the battle for consumers’ time and media usage. Often this is seen as an editorial issue, but it is

136 essentially commercial as our revenues are entirely dependent upon the readership/usage of our printed and digital platforms.

If permitted to proceed, the Local Video services would:

• Accelerate print circulation decline. • Dilute usage of our websites and other digital services. • Limit our potential to achieve audience growth. • Reduce the desirability of our websites and other digital offerings to potential advertisers. • As a result, damage our revenues, profitability and therefore ability to continue to invest in local media services. • Lead to an overall reduction in plurality in local media in the long term and lessening of consumer choice.

Compelling evidence to support this is given in this document.

Furthermore, we reject entirely the BBC’s justifications for proposing this significant enhancement of its local provision. This document demonstrates that Local Video will not be distinctive – in fact it will duplicate services already being provided at no public cost in most significant communities across the UK.

There is no unfulfilled demand for local news provision that requires what is, in effect, state- funded intervention. In fact, powerful evidence is given in this submission that local and regional newspapers and their websites are widely used across all ages and demographics, reflect their local communities, and are the most trusted form of media. Evidence for this is given on pages 21-26 and 60-64 of this document

There is no support from commercial media groups for the BBC’s proposals and no evidence of the BBC’s much-vaunted “partnerships” with other providers.

Local Video would be an entirely unjustified use of the BBC’s substantial licence fee funding to duplicate and substitute commercial services and encroach still further into the market for local news and information. The impact would be seriously damaging upon commercial media operators and the local communities they serve.

Northcliffe and other regional media groups provide a vast range of electronic news and information services and wish to develop these further, but we will only be able to do so if such services can be commercially viable. By eroding our audiences and revenues, the BBC would inhibit or even close off the possibility of such investments in the provision of local news and content.

There is growing evidence across the media sector of the BBC’s enormous power disrupting and distorting commercial markets. The BBC’s ambitions must be reined back, in the interests of sustaining viable commercial media businesses and of ensuring plurality and diversity from both professional operators and the community sector.

This submission addresses the full range of issues relevant to the Public Value Test. It reflects the BBC Trust’s conducting a Public Value Assessment of the Local Video

137 proposition and also its duty to consider fully the findings of the Market Impact Assessment carried out by Ofcom. We believe the opinions and evidence we offer in this document should be reflected fully in the interim recommendations and final conclusions of the Public Value Test.

We urge the Trust to recognise the seismic effect such further intervention by the BBC would have upon the market for provision of local news and information and, therefore, to recognise that the very limited public value of the proposition does not compensate for the substantially negative impact it will have.

The Trust’s role is to represent and act on behalf of licence fee payers, while demonstrating independence from BBC Management. As payment of the licence fee is universal, in effect this means that the Trust must act on behalf of, and in the interests of, the British public. Therefore, the fundamental consideration in any Public Value Test conducted by the Trust must be whether any new BBC service, or significant change to an existing one, is in the public interest.

We believe strongly that the Local Video proposals are not in the public interest. They will distort the market for local news and information, damage commercial providers, stifle innovation, inhibit plurality and diversity of provision, and diminish the enormously important public value role of regional media at the heart of local communities. The BBC Trust must take full account of these consequences and reject the Local Video proposals.

2.U Process and timescales

Northcliffe has considerable misgivings about the process and timescales for consideration of the Local Video service licence.

We are concerned that the BBC Trust cannot be seen as impartial in this process. At the launch of the Local Video application on June 24th 2008 BBC Trustee Jeremy Peat said the Local Video proposal had come at the invitation of the Trust and was aimed at closing what was perceived to be a gap between the demand for local news provision from the BBC and its availability.

Furthermore, the BBC Local Video proposal was agreed by the BBC Trust, at least in outline, in October 2007 when the BBC Executive put forward its plans for investment priorities following the licence fee settlement for 2007-13. SOURCE: BBC.CO.UK – Plans for BBC’s future approved

http://news.bbc.co.uk/1/hi/entertainment/7047060.stmH

At that time, the Deputy Director General of the BBC, Mark Byford, was quoted as saying that the previous Local TV plans were being replaced by new proposals for local digital content creating “hundreds of jobs”. SOURCE: Press Gazette – BBC scraps ultra-local TV news plan

www.pressgazette.co.uk/story.aspH ?sectioncode=1&storycode=39170&c=1

Subsequently, trade media reports early in 2008 indicated that BBC Management were prejudging the outcome of this process. Separate presentations on the plans were given by Andy Griffee, the BBC’s Controller of English Regions, and Cath Hearn, the BBC’s regional

138 head for East Yorkshire and Lincolnshire. Cath Hearn was quoted as saying that the proposed new local sites were a development of Local TV and that “we are anticipating that by the end of this year the BBC Trust will give us the go-ahead”. SOURCES: Press Gazette – BBC reveals prototype for ultra local news website

www.pressgazette.co.uk/story.aspH ?sectioncode=1&storycode=40012&c=1 Online journalism blog – More geotagging: sneak preview of prototype “BBC Local”

http://onlinejournalismblog.com/2008/01/17/sneak-preview-of-prototype-bbc-local/H

We raised our concerns over the BBC Trust’s independence from BBC Management during Northcliffe’s consultation meeting with the Trust on July 21st 2008. At that meeting, Bronwen Roscoe, Senior Strategy Adviser, and Mark Wakefield, Head of Performance, both gave assurances on this issue. We look forward to these assurances being reflected and reinforced during the process and in its outcomes.

During the meeting we also discussed a series of questions we have posed about the BBC’s current and proposed local services and, in particular, current usage of the BBC’s local sites and staffing and costs, now and in the future. At the time of submitting this document we had received answers to some, but not all, of these questions.

In an e-mail on July 23rd 2008, Bronwen Roscoe said the Trust was “continuing to gather information from stakeholders as well as the Executive which includes addressing your questions”. She said this was “an open and thorough process allowing the Trust and Ofcom to independently assess the proposals”.

During our consultation meeting we stressed our belief that it was important for the Trust's credibility as an independent body for these questions to be answered promptly, thoroughly and openly.

It is also clear from the volume of documentation put forward in support of the BBC’s proposals that months of work and considerable sums of money have been spent building the case for Local Video.

It is almost two years since the end of the West Midlands Local TV trial and eight months since BBC Management presented to the BBC Trust its plans for development of services following the licence fee settlement.

Despite this long lead time, interested parties were initially given just 28 days to give their views on the Public Value Assessment by the BBC Trust and the Market Impact Assessment by Ofcom. This exceptionally tight timescale was extended by a further two weeks, to August 4th, in response to feedback from stakeholders.

Regional media have always felt disadvantaged against the BBC. That disadvantage is reflected in the disparity in time available to the BBC to prepare the case for Local Video and that allowed to interested parties to present their views and collate evidence and data in support of them.

We are aware that provisional conclusions are due to be published by the BBC Trust in November 2008, and will then be subject to a further 28-day consultation period. However, it

139 is clear to us that, if we are to influence the final outcome, it is important to make the fullest representations at the first stage of the process.

Just one example of the limitations of the timescale is that it effectively precludes Northcliffe or other interested parties from conducting or commissioning new research which may produce useful and relevant data to inform the deliberations of Ofcom and the BBC Trust. Regional media groups and interested parties are once more disadvantaged in comparison with the BBC Management, which has been able to conduct research in support of its application.

3.U Northcliffe Media: Background and context

Northcliffe Media is a division of Daily Mail and General Trust, which has UK and international media interests spanning national and regional newspapers, classified websites, television, radio, exhibitions and information publishing.

Northcliffe is one of Britain’s largest regional publishing groups with a weekly combined newspaper circulation of 8 million copies a week.

Across Northcliffe our businesses are transforming rapidly from newspaper publishers to dynamic, multi-media businesses. Soon we expect the number of websites in our portfolio to outnumber our newspapers.

Northcliffe publishes a total of 113 titles, including 17 paid-for dailies in locations such as Bristol, Hull, Leicester, Nottingham, Plymouth, Stoke-on-Trent and Swansea. Our target is that, by September 2008, we will have 128 websites - 27 “Major Urban” and “Regional Aggregator” sites and 101 hyper-local or niche platforms. In June 2008 our websites attracted 3 million unique visitors, viewing 45 million pages.

Media usage is changing fast. Consumers and advertisers are increasingly using the Internet or other digital channels – often in addition to print. We recognised this some years ago and began changing how we do business to respond to these trends.

However, as explained further in this document, the commercial viability of this investment in extending the provision of local news and diverse other content far beyond our core newspapers is dependent upon achieving significant audience growth in current markets and upon reaching new consumers. We believe the BBC’s Local Video plans would constrain substantially our ability to achieve this growth.

4.U Northcliffe as a multi-media publisher

Northcliffe is “at the heart of all things local”. We are proud to support the local community and to be an integral part of local life.

We have always been the first place people turn to for local news and information and advertising services. We used to provide those services on the printed page only. Now we meet the needs of consumers and advertisers through whichever form of media they prefer.

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We know that life is local. Research confirms that people spend the vast majority of their time and money within 10 miles of where they live, as shown below.

Distances traveled to key locations

* Figure relates to KEY: primary school. Computer Secondary school is LEISURE equipment 1.3 miles on average. Average 8.5 miles commute 8.1 miles SHOPPING DIY / Cinema 6.8 miles Furniture Garden items School* 5.2 miles 3.1 miles LIVING /carpets 8.9 miles Car Groceries 3.5 miles repairs HOME Move house 5.3 miles 2 Gym/ 13.5 miles Restaurant health club 4 8 miles 3.1 miles Small 6 Major electrical electrical 5.3 miles 8 7.3 miles 10 Clothes 12 Theatre 8.8 milers 14 12.6 miles Average no. of miles traveled Source: DETR/ ONS/ Newspaper Society / The Future Foundation 2003 Look for new car 13.5 miles

83% of people spend all or most of their time and money within 10 miles of home

Source: TNS Media 2006 Base: Adults 15+ in NNG Daily titles’ 10% Areas (8% area in Bath) (14,369)

Our Purpose is about celebrating and enriching local life - about connecting the local community and giving local people a voice. We make a profound and lasting difference to local life through positive, proactive coverage, campaigns and active involvement in local communities.

Our spirit is “at the heart of all things local”. Our day to day focus is to “make local matter more” and our key challenge is to grow profitable revenues through being a dynamic, local multi-media business.

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Our publishing portfolio used to be primarily in print. Now it is much more extensive, ranging across print and digital products. We reach more people, more frequently and more valuably than ever before, through an extensive multi-media portfolio.

Northcliffe’s thisis websites provide an interactive platform for the projection of editorial and commercial content.

When news breaks, it goes on to our websites first. Out of normal working hours reporters frequently file direct to our websites to ensure we are first with the news. Stories are differentiated from print publication, with a focus on editing content to make it search engine- friendly and on projecting subjects likely to prompt the most views and the greatest interaction.

Video is also a major element with almost 62,000 video views across the thisis network in June 2008. Video is a prominent feature of most of our sites and extends to video features in support of the key commercial categories of Property and Motors.

Mobile is becoming an important channel for us. Text to win is a routine competition mechanic and, increasingly, mobile alerts are being used to inform people of significant breaking news events. In Exeter, we invited people to subscribe to a mobile service of frequent updates from a major trial. In Hull we have launched a Sports Flash mobile service which sends SMS alerts to fans of the city’s three major sports clubs, Hull City, Hull FC and Hull KR. 1,000 people have subscribed to this service.

Interactivity is paramount. Northcliffe was the first regional publisher to allow instant commenting from readers on stories. The volume of contributions has grown rapidly to reach more than 61,000 comments in May 2008 – evidence that, across the thisisnetwork, we are providing a vibrant local platform for the robust exchange of views. For example, a recent story about a teenage father who was killed driving a stolen car generated more than 500 comments on thisisswansea, a selection of which were then published in a special “Divided City” report in the South Wales Evening Post.

Northcliffe’s strong focus on developing digital platforms and content is reflected across the regional media industry. We were surprised by the claim in the Local Video Distinctiveness Analysis, produced by Human Capital on behalf of BBC Management, that, of the 1,303 regional newspapers only 201 have an online presence.

These figures are attributed to the Annual Regional Press Survey 2006 and are clearly hugely out of date, because of the rapid expansion of regional newspaper companies into digital publishing. According to the Newspaper Society, the industry is now compromised of 1,300 “core” newspapers and almost as many – 1,100 – websites, as well as 750 magazines, 36 radio stations and 2 television stations. SOURCE: Newspaper Society

www.newspapersoc.org.ukH

The Distinctiveness Analysis by Human Capital also claims that the vast majority of local and regional newspaper websites do not have video content. We challenge the accuracy of this claim, made as it is on the basis of a random sample of sites. We would also point out the following:

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• Video news is still in its infancy and is developing rapidly. • Many low circulation weekly newspapers serving very small communities are produced by editorial teams of just a handful of journalists. With such slim resources it is difficult, or even impossible, to provide video content. • Inconsistency of video services reflects the diversity of the industry. • There remains no direct commercial model for video news provision. Therefore, commercial pressures will inevitably constrain somewhat the pace of its development.

However, we note that, in the same document, Human Capital say that, although presently not all areas of the UK have video news available online, “… This is likely to change in the future as local newspapers further develop their online presence.”

Finally, as explained further in this document, it is important to stress that robust and credible comparisons can only be made between the BBC Local Video proposals and services being provided, or expected to be provided, on regional websites serving geographical areas similar to the BBC sites.

5.U Northcliffe’s digital development and innovation

In all the communities we serve, Northcliffe is “at the heart of all things local” – in print and digital media. We have developed a vast range of digital services, providing consumers and advertisers with new ways to connect with their community and customers. The following are just some examples of Northcliffe’s digital development and innovation.

In November 2005 the Hull Daily Mail became the first regional newspaper publisher to produce daily video news reports. The Hull editorial team now has 30 journalists producing video reports across news, sport, features and photographic teams. These video journalists (VJs) have been trained to make high-quality video reports for the web. They find the story, film it, add the narration, edit the footage and, finally, upload it to the website. They also write the story or take the photographs for the paper.

Hull is far from unique in its commitment to video journalism. In South Wales we now have 43 journalists who produce video content from our offices in Swansea, Llanelli and Carmarthen. In Gloucestershire we have at least 10 journalists who are trained in video journalism. Even in Torquay, one of our smallest daily centres, we have four video journalists.

Northcliffe has launched several micro-sites serving small rural communities which previously received limited coverage from traditional media. Examples from Lincolnshire

include www.thisislouth.co.ukH H and www.thisisbarton.co.ukH .H

Our site in Croydon, south London, (www.thisiscroydontoday.co.ukH )H has just relaunched on Northcliffe’s next generation website platform with no less than 19 micro-sites. We expect to launch a further 100 hyper-local sites across the Northcliffe footprint in the 2008/09 business year.

These hyper-local sites ensure small communities are better served than ever before and local people have the means to interact with and influence local life as never previously. The

143 sites are rich in user generated content (UGC). Just one example of this is the community

events calendar on our Cleethorpes site – www.thisiscleethorpes.co.ukH H – which in June 2008 carried details of more than 500 events provided by members of the local community, despite only launching on the 5th of that month.

We have several niche sites focused on special interests. For example, we have launched wikikernow.co.uk – an alternative online guide to all things Cornish.

Our long-established Beehive community network provides totally free websites for all not- for-profit organisations in Northcliffe publishing areas.

We have launched business sites in the East Midlands and Westcountry, with the Humber region next. These offer a news and information exchange for businesses, plus help, advice and marketing opportunities for start-ups, and add real value to local and regional economic development initiatives.

In Bristol our Crackerjack website (www.crackerjack.co.ukH )H allows users to review and rate restaurants, bars, entertainment venues and events.

We have launched “Buy Local”, “Shop Local” and “Eat Local” campaigns with online forums for community information sharing in rural communities such as Devon, Cornwall, Gloucestershire and Kent.

Last November we launched an electronic business directory serving Grimsby and Scunthorpe. It offers 15,000 businesses a free route to market. Companies can also opt for enhanced paid-for listings. A similar directory has just launched in Hull.

Our innovative Your Mail website (www.thisisyourmail.co.ukH )H was launched just five months ago as a trial for Northcliffe. It is billed as the place for community conversation in Hull and the East Riding of Yorkshire. We believe it is unique in how it enables members of the local community to communicate with others.

Your Mail allows users freedom to post what they want, when they want. When the earthquake struck in February 2008 users posted comments within minutes and the conversation raged through the night.

The site has exceeded its early targets, attracting more than 1,300 registered users. In May 2008 it had more than 17,000 unique visitors and 145,000 page views. Almost 4,000 posts were uploaded by users in that month alone.

However, as with so many of our new digital platforms and services, Your Mail is not profitable. Indeed, the business plan projects that it will take three years for revenues to exceed costs. Achieving commercial viability depends upon the site attaining a significantly larger engaged audience which would prove attractive to sufficient numbers of advertisers. Although the BBC is not proposing to replicate the service provided by Your Mail, the Local Video platform would threaten its growth.

In May 2008 29.8% of visits to Your Mail came from our core Hull website, thisishull. Usage of thisishull is largely to the home page and news and sport sections. These sections would

144 face significantly greater competition from the proposed enhanced local BBC sites. It is inevitable that this will result in a reduction in the current and potential usage of the sites and a subsequent decline in traffic to our embryonic sub-sites, such as Your Mail.

Without the oxygen of increased traffic from our core sites, the prospects of Your Mail and many of our other newly-launched digital platforms becoming commercially sustainable is bleak.

6.U Industry context

The BBC’s Local Video proposals come at a time of unprecedented uncertainty and turmoil in the regional media industry.

Our business and that of the other regional groups is undergoing change at a faster pace than we have ever experienced.

We are making rapid progress towards our goal of becoming a dynamic, local multi-media business. We have integrated tasks and processes across a range of media much faster than many other publishers. We have done this while reducing our cost base and headcount significantly. This has been difficult, but necessary, to ensure we are in the best possible shape to meet the challenges of publishing in the multi-media age. We believe we are now one of the most efficient and effective media organisations in the UK.

However, our progress has been challenged by the credit crunch and the resultant severe economic downturn, which is likely to be prolonged.

The combination of extreme economic conditions which have prompted very real fears of recession are described in the article below, which was published in the Sunday Times business section on July 6th 2008. SOURCE: Times Online – Falling into the abyss

http://business.timesonline.co.uk/tol/business/economics/article4276592.eceH

The article added a specific assessment of the media sector: SOURCE: Times Online – Most sectors are in trouble

http://business.timesonline.co.uk/tol/business/economics/article4276630.eceH

As a sector largely dependent upon advertising revenues, media has been among the hardest hit. Johnston Press recently completed a heavily discounted rights issue to secure £170m to deal with the downturn, while Trinity Mirror’s share price slumped 28% in a single day, on June 30th 2008, after it issued a profits warning. Newsquest, a subsidiary of American media giant the Gannett Corporation, recently reported a 19% drop in its classified advertising revenues in June.

Revenues are under severe pressure across the media sector. This is reflected in historical lows for media stocks. The reports below illustrate the position starkly. SOURCES: Guardian.co.uk – Press the panic button

www.guardian.co.uk/media/2008/jul/07/pressandpublishing.advertisingH Guardian.co.uk – ITV shares dip below 40p

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www.guardian.co.uk/media/2008/jul/02/itv.mediabusiness/printH Guardian.co.uk – Trinity Mirror shares fall 28% in a day after it warns City of advertising slump

www.guardian.co.uk/media/2008/jul/01/trinitymirror.pressandpublishingH Guardian.co.uk – Newsquest classified ad revenue falls

www.guardian.co.uk/media/2008/jul/17/newsquest.pressandpublishingH

Our parent company DMGT is much better placed to withstand these conditions than any of the other groups with regional publishing interests, because of the diverse range of media and information businesses it owns, including “pure play” classified websites, and its focus on long-term investment and growth.

This view was supported by Citigroup in a report on July 2nd 2008 which downgraded profit forecasts for newspaper publishers. It said: “We remain positive on DMGT where the only part of the business we see as ‘impaired’ is the regional newspapers. We still expect national newspapers to outperform a weak market. We continue to see value in DMGT, which continues to invest appropriately in what we consider to be a diverse mix of good long-term growth assets.” SOURCE: Guardian.co.uk – ITV shares dip below 40p

www.guardian.co.uk/media/2008/jul/02/itv.mediabusiness/printH

We also believe that the share prices of groups with regional media interests are an over- reaction to cyclical conditions and fail to value properly their strengths, including their growing multi-media portfolios and audiences. Some commentators are also noting that regional media companies are growing digital audiences and revenues rapidly and that community connection and identity will become ever more important in influencing consumers, as highlighted by the following recent article: SOURCE: Brand republic – Web advertising at regional newspapers helps offset drop in print editions

www.brandrepublic.com/Marketing/Analysis/FeH atures/822291/Web-advertising-regional- newspapers-helps-offset-drop-print-editions/

However, it could not be more evident that regional media companies are assailed by a multitude of pressures, including increased competition from digital-only competitors. Adding to the fierce competition for audience – and hence revenues – by allowing the BBC to increase enormously its presence in local marketplaces would only intensify these pressures and risk further damaging consequences for commercial operators at the worst possible time.

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7.U The BBC’s local impact

Evidence from Hull demonstrates powerfully the significant impact investment by the BBC in local content and services has on the market for local news and information.

The BBC has built an exceptionally strong position in Hull as a result of its investment of more than £25 million in news and information services in that area since 2002. The BBC’s investment in Hull was the precursor to the BBC’s Local TV trial in the West Midlands in 2006, which, in turn, led to the Local Video proposal.

Of course the BBC is not a direct competitor for revenues. But it is a formidable competitor for audience. We believe the BBC’s investment in developing local news services has damaged the circulation of the Hull Daily Mail, which has seen accelerated decline since 2002, as shown by the graph below. It also threatens to limit the scope of our Hull business to develop new revenues from expansion of multi-media services.

Full Year ABC Performance 1998 - 2007

90000

-1.91%

85000 -3.57%

-3.1% 80000 -2.82%

-3.07% 75000

-7.5% 70000

-7.51%

65000 -4.96%

60000 -6.01%

55000 12345678910 Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Sales 86683 85024 81986 79392 77076 74709 69094 65666 61660 57949

We fear that, if the Local Video proposals roll out nationwide, we will see a negative impact on circulations of our paid-for newspapers, in particular our daily titles, as well as the adverse effects we describe in this document on online audiences and revenues.

The impact on circulation would be directly very significant financially, as well as resulting in a reduced print audience and response for advertisers. To set this in context, an impact from the BBC’s enhanced services of just 1% further reduction on our daily circulations would result in a loss of £700,000pa in circulation revenue.

In Hull our biggest competitor for local news, and for consumers of local news, is the world’s most powerful media brand. As if doing business wasn’t difficult enough because of changes in lifestyles, technology, media usage – and, now, adverse economic conditions – in Hull we

147 have to compete against the public-funded BBC with its enormous resources, cross- promotional power and enviable technical expertise. The impact of the BBC in the Hull area is illustrated further by the graph below. 1 frequency of use of local media in Hull

100% 5% 8%

80% 14%

27% 11% 15% 60% 18% 9% 29%

40% 8% 28% 12% 56%

20% 8% 33% 9% 24% 8% 6% 21% 5% 5% 0% 1% 2% HDM/ERM thisishullandeastriding BBC Radio BBC Look North Calendar bbc.co.uk/humber Humberside

Once or more a day Once or more a week Once or more a month Less frequently

Base: Adults 15+ in Hull Daily Mail 10%+ Area (177 recontacts)

It gives the results of independent research conducted in September 2006 which showed that the BBC’s Look North regional TV bulletin had usurped the Hull Daily Mail’s position as the most used local news source. The Hull Daily Mail includes the East Riding Mail edition and is shown on the graph as HDM/ERM.

Jicreg research in 2006 highlighted a 62% increase in “turn to first” for local news for television between 2003 and 2006, while all other media, including the Hull Daily Mail declined. Follow up research, in September 2006, showed that the BBC’s Look North regional TV bulletin had become, by some distance, the most used news source in the Hull area.

The research showed that 56% of local people used BBC Look North daily, compared to 33% for the Hull Daily Mail. Over a week, Look North was seen by 83% of people, compared to the Hull Daily Mail’s 62%.

Clearly the BBC has used its publicly-funded resources and cross-promotional brand power to significantly enhance its position in the Hull marketplace at expense of the Hull Daily Mail and its associated platforms.

The combination of local television, radio and Internet services makes the BBC by far the leading local news and information provider in the Hull marketplace. The proposed substantial development of the BBC’s local websites and provision of audio-visual content via

148 a variety of channels would see the BBC extend even further its leadership of the media market in the Hull area.

Furthermore, we believe the Local Video proposals could establish the BBC as the leading provider of local digital news and information across the UK.

8.U Audience development

In common with other regional groups, the circulations of Northcliffe’s paid-for titles have been in decline for many years, albeit from a very high base. This trend reflects societal and lifestyle changes, advances in technology and the increasing choice of sources of local news, information and advertising.

The graph below shows the total paid-for circulation of our daily titles since 1994, as verified by ABC.

1,200,000

1,000,000

800,000

Jan-Jun 600,000 Jul-Dec Circulation

400,000

200,000

- 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

However, this decline is compensated for by significant growth in our online audience. Across Northcliffe’s thisis websites we had a total of 3m unique users and 45m page views in June 2008, increases of 48% and 9.5% respectively year on year. The lower figure for growth in page views reflects improved functionality and navigation on our sites which enables users to access content with fewer clicks.

A significant proportion – 20% of local people – use both our newspapers and our websites. But Northcliffe is also developing standalone digital audiences – i.e. we are attracting new users that are not newspaper readers and developing new markets for local news, information and niche content, as noted in the article and graph below. SOURCE: Brand Republic – Northcliffe shows advertisers print and online crossover

www.brandrepublic.com/News/803795/Northcliffe-shows-advertisers-print-online-crossover/H

149

5,000,000

c27% uplift from online

991,395 4,000,000

910,865 3,000,000

2,000,000

2,782,037

1,000,000

0 Northcliffe (based on AIR)

Paper Solus Paper & Online Online Solus

A key business objective for Northcliffe is to increase the frequency of visits by users to our websites. Increases in repeat visits will indicate that our sites are increasingly popular with users and even more relevant to their lives, wants and needs.

As of June 2008 the average number of visits per unique visitor to Northcliffe sites was 2.5 visits per month. There are large variations in usage. In June 2008 87% of visitors came to our thisisbristol site 1-2 times a month while almost 10% visited 3-9 times (Source: Intellitracker Web Analytics June 2008, thisisbristol.co.uk). Obviously, these figures can never be 100% precise because of users deleting cookies and different IP addresses.

Nevertheless, a major priority is to drive up the frequency of visits in order that we can deliver a more engaged audience to our online advertisers and so that their advertising is more likely to be seen and responded to.

We also believe there is potential to increase the duration of visits, which currently average 6 minutes 55 seconds across the thisis network, by increasing the quality, volume, relevance and range of our online content. Increasing average visit duration will also enhance our online sales proposition and produce improved response for advertisers.

At the launch of the Local Video proposal on June, 24th 2008, David Holdsworth of the BBC said research conducted in support of the initiative indicated people typically used three or four different sources for local news and information and that this was unlikely to change as a result of the new BBC service. Details of this research are given in the BBC’s documentation supporting the Local Video proposals and are referred to later in this submission. It was noteworthy that, at the launch, David Holdsworth said nothing about the impact upon frequency or duration of visits to commercial sites.

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We believe the proposal to enhance substantially the BBC’s local websites will inevitably limit our potential to increase user visit frequency and our scope to increase visit durations. People’s lives are increasingly busy and all media operators are engaged in a constant battle for the limited time and attention of consumers. Greater choice invariably leads to fragmentation of media usage.

We have no issue with commercial operators competing aggressively with us for audience time and attention and we are content to meet the challenges posed by the growing numbers of non-traditional publishers – search engines, content aggregators, community groups, citizen journalists, Internet start-ups etc – who seek to erode our digital audiences and revenues.

The Newspaper Society, Northcliffe and the other regional groups have voiced concern for some time about the growing trend for public bodies such as local councils to enter the publishing arena, in print and/or online, producing so-called “news” and extracting advertising revenues from local marketplaces.

However, our concerns about the BBC are far greater. The BBC already has a powerful presence in local and regional news through its TV, radio and Internet platforms, all funded generously from the licence fee and benefiting hugely from cross-promotion and cross- fertilisation across the BBC’s multiple channels to market.

Now the BBC is proposing to spend up to £23 million annually on extending massively its content, services and presence in localities across the UK to compete directly with local and regional media publishers in the crucial arena of online news.

The playing field is already outrageously uneven, favouring a publicly-funded media monolith against the major regional companies and the relatively few remaining independent publishers.

It is enormously to the credit of regional publishers that they have continued to develop their businesses, cross-media audiences and relationships with local communities despite the BBC’s powerful presence and multiple unfair advantages.

However, the proposed massive additional publicly-funded intervention into local media markets would exaggerate further the iniquitous disparity between a commercial sector facing perhaps the most challenging conditions it has ever encountered and the BBC which would be able to extend its reach and impact locally, free from any commercial constraints.

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9.U Audience demographics

We note that the BBC is seeking to reach a younger demographic through Local Video, claiming younger local consumers are under-served.

The BBC’s regional television programmes may well be becoming less relevant to young audiences. However, we challenge strongly any assertion that young people are underserved by local and regional media.

Contrary to popular perception, our newspapers’ readership profile mirrors almost exactly the population profile, as illustrated by the graph below. It shows the average issue readership of Northcliffe titles and relates this to the population in the communities we serve.

Northcliffe Average Issue Readership profile matches population

17% Hard Pressed 18% 20% Moderate Means 20% 33% Comfortably Off 33% 5% Urban Prosperity 4% 25% Wealthy Achievers 24% 48% C2DE 49% Any NML area 52% ABC1 51% AIR any NML publication 37% 55+ 39% 34% 35-54 35% 29% 15-34 27% 52% Female 52% 48% Male 48%

0% 10% 20% 30% 40% 50% 60%

Source: TNS Media 2006. Base: Adults in NML 10% areas (24,545)

Fewer people are buying local and regional newspapers because of a variety of factors, including societal and lifestyle changes and media fragmentation, but young people are certainly not disenfranchised or disengaged from local and regional news and information.

Furthermore, our audience profile for the thisis sites shows equal proportions of under 34s and over 55s and is largely reflective of UK internet users. Details of the thisis audience profile are given on the following pages.

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Summary: ‘this is’ audience profile Methodology

• 55% of the audience are female - online survey of website users - across c30 Northcliffe websites - these findings focus just on the ‘thisis’ • Equal proportions <34 and 55+ network - conducted by Survey Interactive • Experienced and active online: - fieldwork conducted October 2007

• 87% are online every day

• 80% have purchased online in the last 3 months • Online banking is the most popular online activity • Around a third take part in social networking • 69% consider local news content to be extremely important • ‘What’s On’ is considered as important as jobs and more so than property • Opportunity to make a compelling case for registration

• 4 in 10 are strong brand advocates

• Most people (65%) would recommend ‘this is’ sites to others NM Audience Portfolio Study Oct 07

‘this is’ network audience profile: key demographics

equal proportions 55% <34 and 55+

45% 50% <44 50% 44+

33% 31% 25% 23% 22% 19% 18% 14% 8% 7%

Male Female 15-24 25-34 35-44 45-54 55-64 65+ AB C1 C2 DE

NM Audience Portfolio Study Oct 07

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‘thisis’ profile: key demographics v UK Internet Users reflects geographic variations

female skew equal proportions 63 64 <34 and 55+ 53 55 49 45 47 40 40 37 36

26 25 20

Male Female 15-34 35-54 55+ ABC1 C2DE

this is UK internet users

UK internet users source: BMRB internet monitor August 2007 Base: thisis monthly users in NML newspaper areas corresponding to sites surveyed

It is noteworthy that more than 1 in 3 take part in social networking and instant messaging – activities associated with the younger end of the age spectrum.

over 1 in 3 ‘this is’ users take part in social networking and instant messaging - activities associated with younger end of age spectrum

Online banking 60% Download/send photos 45% Online polls 43% Price comparison site 43% Listen to radio 39% Search for jobs 39% Social networking 35% Searching for property 34% Instant messaging 34% Read forums or bulletin boards 33% Playing games 28% Download music 27% Read product reviews 25% Post comments 23% Read blogs 21%

NM Audience Portfolio Study Oct 07

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Our online audience is economically active. The graph below shows that a significant proportion intend to make major purchases within the next 12 months. There is a strong correlation with three of our major digital revenue drivers – Jobs, Property and Motors. Our growing digital audience is therefore attractive to advertisers and offers promising potential for revenue growth.

Life events expected amongst ‘this is’ users (next 12 months)

Get (another) job 28%

Buy a car 21%

Take a long break / holiday 16%

Move to another area 14%

Buy a property 13% a significant proportion intend to make Get married / civil ceremony 4% major purchases Become a parent (again) 3%

Retire 2%

Key correlation with 3 of our main digital revenue drivers – jobs, property, motors

NM Audience Portfolio Study Oct 07

The vast majority of users of our local websites live locally, as illustrated below by the concentration of thisisleicestershire users in the core Leicester Mercury footprint. Only 18% of monthly unique users are outside the Mercury circulation area. Our life is local proposition is profoundly relevant both in print and online.

Local ‘thisisleicestershire’ users focused in core Leicester urban area

82% of the thisis audience is from inside the Leicester Mercury footprint area (153,812)

thisisleicestershire monthly users locations

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10.U The youth market

Furthermore, a number of our digital innovations are aimed specifically at young people.

For example our Hull Vibe website (www.hullvibe.co.ukH )H targets 18-30s and has become established as the place to go online to find out about nightlife and live music in the Hull area. In May 2008, Hull Vibe attracted more than 9,000 unique visitors and over 500 UGC contributions. Usage is boosted by a Hull Vibe column in the Hull Daily Mail, demonstrating that young people continue to read and respond to the newspaper.

This year Hull Vibe is budgeted to deliver £72,000 in advertising revenues, largely from clients who previously did not use our mainstream publications. We believe there is potential for this platform to be extended to some of our other markets, but the difficult trading environment and the need for investment upfront, prior to revenue development, has restrained plans for more Vibe sties, at least for the time being. This is yet another example of commercial considerations, which do not impact upon the BBC, hampering our development aspirations.

There are many other examples of initiatives targeting the youth market.

A Face of Gloucestershire competition, promoted in print and online, rewarded two young people with promising modelling careers. The initiative prompted 9,000 votes by text.

In print, our Courier Media Group based in Tunbridge Wells, Kent, relaunched Focus, its free newspaper series, in January 2008 to target the 18-30 market. It now has its own 20- something editor and is packed with soundbite news with a major emphasis on leisure, bands, affordable fashion etc, plus encouragement to interaction through links to online polls and text messaging.

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Some of our activities targeting the youth market are long-standing. Twenty seven years ago our colleagues in Cornwall launched Wavelength, which is now the fastest-growing surfing magazine in the UK, according to WH Smith. There are 9 issues each year with a readership of over 42,000 for each issue, 70% of whom are aged 15-34. The online equivalent,

www.wavelengthmag.co.ukH ,H has more than 1.5 million page views a year.

11.U Revenue development

In common with most regional publishers, Northcliffe UK’s revenue comes predominantly from advertising. In 2007-8 business year this will make up 79% of overall income.

[]

We do not accept that there is no growth to be achieved from newspaper publishing. Indeed, we believe that, through innovation, we can drive new revenues from print.

For example, in the Midlands over the past year we have launched a series of 12 new free newspapers under the Messenger brand. These have small distributions – typically 5-8,000 copies – focus on user-friendly, 60-second news, and target affluent consumers in villages and rural towns who are attractive to major advertisers in cities such as Derby, Leicester and Nottingham.

We intend to launch a further 8 Messengers in the Midlands region to deliver a total of £3m in advertising revenues from the 20 titles. We are now exploring the potential for extending this publishing model to our other regions.

However, we accept that our core print business is mature and by far the greatest scope for growth is in the digital space. This is why so much of our focus is on developing new electronic platforms and services. Because of the continuing trend of reduction in print income it is essential that we drive hard for growth in digital revenues.

We believe our future digital revenues will be almost entirely from advertising – and that these revenues will be dependent upon the development of a larger local audience which engages more frequently with our digital platforms.

The rapid growth in Internet usage and advertising spends on the web means there is huge scope for regional commercial media to develop new audiences and revenues in the digital space – if publicly-funded services are not allowed to close off this potential.

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Huge opportunity around digital display & classified growth… ‘Looking ahead to 2010 UK Internet spend will hit £4.46bn according to media agency Zenith Optimedia. Within that online classified spend will reach £876m and spend on display advertising will crack £1bn Mark Sweney, Guardian, May, 2008 ‘The internet is not one medium, its growth rate is a blend of three distinct businesses growing at different speeds: search, display and classified’ Adam Smith, Futures Director, WPP owned media agency Group M

‘There is a groundswell of opinion and enthusiasm for using online for branding activity’ Rhys McLachlan, Head of Broadcast implementation at MediaCom

…but to succeed & secure our share in these markets we need to operate in an environment where we can protect and grow our digital audiences

We believe significant additional competition for local “eyeballs” from the BBC will have a substantially negative impact on our ability to increase our digital audience and to extend significantly the frequency and duration of visits to our websites.

The graph below plots the growth in usage of Northcliffe’s thisis network of websites. As mentioned previously, unique visitors grew by 48% year on year in June 2008.

Unique visitors - This is websites (thousands)

3,250 3,000 2,750 2,500 2,250 2,000 1,750 1,500 FY 2006 FY 2007 FY2008 1,250 1,000 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

Over this same period, average frequency of visits among these visitors has also increased, so that the average daily audience is significantly greater. It is this combination of total audience and frequency that is so important for advertisers. As we have grown our Internet audience we have also increased digital revenues, as shown earlier in this document.

We are encouraged by evidence from elsewhere in the world which demonstrates that revenues follow readers. Scandinavia is one of the most advanced media markets in the

158 world and trends there are indicative of how media usage and revenues are likely to develop in other western economies.

Recently senior executives from Northcliffe Media and Associated Newspapers received a

presentation from Torry Pederson, Publisher of VG NETT (Hwww.vg.no),H Norway’s most read and profitable website. VG NETT is the online equivalent of the Norwegian daily national

newspaper, Verdens Gang (VG). VG is owned by Schibsted (www.schibsted.comH )H which has extended from Scandinavia to have publishing interests across Europe

VG NETT launched in 1995. It now has 1.4m readers a day, 200,000 more than the paper. VG’s circulation peak was 390,000 in 2002. By 2007 it had dropped to 309,000.

VG NETT now contributes 30% of the company’s total profits. Online revenues are growing by 40%-plus annually and now amount to 35% of all VG revenues. It is predicted that in 2011 online will deliver more revenue than the paper.

The graph below shows how VG NETT’s digital ad sales growth almost exactly matches that for its online readership growth. It is notable that Norway’s public service broadcaster does not have as powerful a position in the Norwegian media marketplace as the BBC enjoys in the UK.

Example from a Scandinavian publisher (VG Nett)

The success of publishers such as VG is influencing our strategy to build digital audience.

We believe it could be possible for Northcliffe to drive monthly visitors of our thisis websites from 3m now to 5m by 2013, by further improvements to our web platform, focusing on search engine optimisation, building brand awareness, and delivering ever more relevant and frequently updated local content. As Internet usage continues to grow, we will strive to

159 increase our audience penetration, frequency of visits, the number of pages viewed per visit and, consequently, the total number of page impressions on our sites.

Based on revenues per 1,000 page impressions, this could see our digital display only revenues grow to between £18.5m and £39m, depending upon our level of success in increasing audience and their level of engagement with our sites. This is illustrated below in the projections we have developed for future online display revenue potential.

However, these forecasts are based on online competition for our core offering – local news, sport and information – remaining constant. We have not factored in significant additional competition from the BBC. We fear that, if the BBC is permitted to enhance its local digital offering, it will inevitably gain a significantly larger share of the online market for local news and restrict our scope to grow digital advertising revenues.

As we have explained, this is a cause for serious concern in view of the continuing downward trend of print revenues.

It is clear that growing digital advertising spend is based upon delivery of a sizeable local audience to clients. This audience drives the revenue model in three ways – it provides volume of fixed-price display advertising inventory; it responds to performance-related campaigns; and it generates traffic for classified channels.

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In display advertising, the internet is used with increasing success for branded campaigns. Display formats are diversifying away from banner and button activity and towards formats which offer better creative potential such as video and rich media. Online audio visual advertising in the UK, for example, is already worth £142m in 2008 (Source: Borrell Associates July 2008) and other non-banner display advertising was worth more than £125m in 2007 (Source IAB/PWC/WARC 2007).

Digital display as a whole is also growing at a significant rate. Growth of 76% in this market over the last two calendar years has taken its total annual value past £590m (Source: PWC/IAB/WARC 2007). Recently, Unilever and Proctor & Gamble, two of the world’s biggest brand advertisers, announced a major shift of spend away from television to the Internet, one of the clearest indications that online advertising is maturing beyond the direct response market. SOURCE: Financial Times – Unilever and P&G ease marketing fears

www.ft.com/cms/s/0/c518d7f4-40ae-11dd-bd48-0000779fd2ac.htmlH

Display formats are now starting to look beyond “click-through rate” (CTR) as the measure of success, so that content destinations such as newspaper websites and online TV can now make significant revenues from this type of advertising despite having “sticky” content and consequently poor CTRs.

12.U Editorial and commercial content inextricably linked

Digital advertising spends continue to grow rapidly as the audience expands and proves its value, according to the Internet Advertising Bureau. The entire online advertising market is now worth over £2.8bn, more than all local newspaper revenues combined – clear evidence that this medium is the one offering growth to local and regional publishers. SOURCE: Guardian.co.uk – online advertising revenues reach £2.8bn

www.guardian.co.uk/media/2008/apr/08/advertising.digitalmedia?gusrc=rss&feed=technologH y

‘We would not be surprised if we went from £2.8bn to £3.5bn in 2008, growth of 25%. And from there it's only a shortish leap to hit £4bn during 2009, overtaking television as the leading sector’

Guy Phillipson, Chief Executive, IAB commenting on 2007 UK online ad spend

Classified advertising on the Internet saw 54% year-on-year growth in 2007 to reach £585.3 million, as consumers and marketers recognised online’s unrivalled reach, flexibility and immediacy.

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SOURCE: Internet Advertising Bureau website – UK Internet advertising expenditure grows 38% year on year to reach £2.8 billion in 2007

www.iabuk.net/en/1/pwcadspendstudy080408.mxsH

We note that the BBC will focus Local Video on core content such as News and Sport, specifically excluding obviously commercial content such as Jobs and Property. However, it is disingenuous to claim that drawing such a distinction between editorial and commercial content will mitigate the impact on commercial operators.

Audience and traffic to and through editorial sections of Northcliffe’s thisis sites, such as News and Sport, as well as to the Home Page, are considerable. We derive significant display advertising revenues from these sections, which are popular with advertisers because they have the most traffic and the audience spends longer with each page, making them “sticky”.

They are also extremely important in attracting a passive classified audience. In May 2008, 56.6% of visits to the thisis network were to the Home Page, News or Sport while 34% went to classified sections, such as Jobs, Motors, Property or our buying and selling platform, Stuff4Sale.

As shown by the graph below, Local News is by some distance the main stated reason for visiting our thisis sites, but 22% of visitors do so to look for classified advertising.

Main reason for visiting ‘thisis’ today (top 10)

Local news 38%

To browse 15%

Local sport 9%

Place an ad/search classifieds 8%

Find a job 8%

Search for a local event 4% local news the main driver Look for a car 3% then general browsing

Look for property 3% 22% looking at classified ads National & global news 2%

'What's on' listing 1%

NM Audience Portfolio Study Oct 07

It is important to emphasise that we drive a high percentage of users from the home pages of our websites through to our classified sections. The example below from thisishull in March 2008 shows that the home page generates 60% of visits to our lucrative Jobs pages. Recruitment advertising accounted for over £8m of Northcliffe’s online revenues in the 2006/7 financial year.

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Example from ‘thisishull’ – March 2008

Total Visits to site 692,192

Visits to home page 339,487

Visits to Jobs pages 67,773

Visits to Jobs pages from:

- home page 41,695 – (60%)

- paid search 3,196

- other referrers 22,882

Reduced visits to our home pages because of significantly enhanced local provision from the BBC would, therefore, inevitably reduce visits to our commercial content. In turn this would result in diminished response to digital advertising, weakening and threatening our sales proposition and revenues.

A similar picture is shown for Property – another crucial revenue earner. Below is shown visits to our Property pages from the thisisbristol home page in May 2008. 40% of visitors to the Property pages came from the homepage. It should be noted that this is during a significant downturn in the property market and would otherwise be expected to be far higher.

Example from ‘thisisbristol’ – May 2008

Visits to site 484,156 Visits to home page 192,707 Visits to property pages 20,651 Visits to property pages from: - home page 8,200 (c40%) - paid search 0 - other referrers 12,451

Home Page currently generates c40%U U of visits to lucrative property pages

Source : Intellitracker Web

These examples reinforce the importance that we place on driving visitors from our home pages and editorial content to sections carrying our major revenue earning content – Jobs, Property and Motors – and hence our desire to protect our core audience and retain the scope to increase it.

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We note that the document “BBC Local Video Distinctiveness Analysis”, produced by Human Capital for BBC Management, says: “The Internet represents an opportunity (for regional newspaper groups) in both classified and display advertising but significant consumption is essential”. This is our point exactly.

If local people go elsewhere (e.g. to BBC local sites) for local news and sports content not only will our display revenues suffer but also our classified revenues.

The Distinctiveness Analysis claims that other video broadband services are likely to launch to try to exploit online revenue opportunities. It refers to Google Local, UpMyStreet and local commercial radio stations. However, we must point out that none of these have the newsgathering resources, volume and quality of content, trust or community links to offer a sufficiently credible service in the local marketplace.

It also mentions competition from councils experimenting with video information services. Such initiatives are certain to face scrutiny to establish whether local authorities are straying beyond their remit as providers of local services into the field of media and, indeed, potentially using public monies for propaganda.

Such concerns are expressed in the article below by The Independent’s media commentator Stephen Glover. It is interesting to note that Glover also refers to the BBC’s Local Video proposals in his piece about state-funded intervention in local media. SOURCE: Independent.co.uk – State newspapers are rivalling the free press – right under your nose

www.independent.co.uk/news/media/comment/stephen-glover/stephen-glover-on-the-press-H 866794.html

Furthermore, councils are hardly noted for producing interesting or engaging content and their ability to achieve sizeable audiences for such initiatives will be inhibited by this factor and their lack of credibility as independent providers of local news and information.

ITV has ambitions to extract significant revenues from local and regional services, as demonstrated by the launch and rapid development of ITV Local. ITV Local will continue to target local advertising revenues but, in our view, in order to do so with any significant success it will have to build, almost from scratch, credible local content. ITV is unlikely to achieve this while – under pressure from the BBC and falling revenues in its core business – it is reducing its professional news-gathering resources.

Unlike ITV, the BBC already has significant resources locally gathering content for its regional television, radio and online platforms. It has a powerful brand, unrivalled cross- promotional opportunities and expertise, and high credibility as a news provider.

Increasingly, our advertisers are buying packages which combine on and offline activity. For example, in Hull a recent initiative has seen 40% of Hull Daily Mail print display advertisers buying a package including inventory on thisishull. Similar initiatives exist across all Northcliffe territories, for display advertisers and all categories of classified. In Bristol, the Best of Both Worlds initiative offers advertisers the combined and extended reach of our

164 newspapers and websites. Across Northcliffe 77% of print recruitment advertisements appear online as well.

The importance of a packaged print and digital ad sell is shown by the combined reach of the Leicester Mercury and thisisleicestershire. In Leicester we can deliver a 37% increase in audience by adding online to advertising in our daily title. Although this offers a considerably extended reach, it is notable how many people – 21% of the total audience – use both the Leicester Mercury and thisisleicestershire.

Reach of Leicester Mercury and ‘thisisleicestershire’ : Mercury area

• Net adult reach of 41% (318,520) • 37% audience increase by adding online

52% 21% 27%

Mercury thisis Duplication Solus Solus 67,442 164,708 86,370

44% of the online audience is duplicated in print 29% of the print audience is duplicated online

Based on JICREG Jul-Dec 07 Base: thisisleicestershire monthly users in Leicester Mercury area

Such initiatives are crucial to the development of our revenues, but their success depends on our sites being able to increase their audiences and, in particular, the frequency of visits by users. We are seriously concerned that the provision of enhanced local digital content from the BBC will erode our online audiences and, consequently, the revenues we can achieve.

13.U Delivering response to advertisers

It is also relevant to mention that many advertisers rely, to a greater or lesser degree, on Northcliffe’s regional newspapers and their digital platforms to generate and deliver local customer interest in their products and services. This is because no other commercial organisation can match our reach into local communities and the strength of our connection with them.

Companies need to market their goods and services to develop their businesses and they want to advertise in printed publications and/or digital platforms which can deliver widespread reach and response.

Expanded local BBC services which are prohibited from carrying advertising could reduce greatly the usefulness and relevance of commercial operators by taking a significantly larger

165 share of the available audience and time for media usage, without offering an alternative to advertisers.

This scenario poses the important question: Where do advertisers go to market their services locally if audiences for local commercial media migrate to the BBC?

14.U BBC Local Video: Non-distinctive, substitution services

We reject the BBC’s claims that Local Video offers a distinctive service. We believe the BBC’s proposed new local services would merely replicate or substitute those provided by the commercial sector.

Any distinctiveness the BBC can claim to offer is derived from its funding, resources and brand power, not from any unique offering or differential to services offered by others.

The BBC’s Royal Charter review document, Building Public Value, highlighted as one of the Corporation’s objectives meeting the needs of the UK audience not already met by other organisations. Yet the BBC’s local strategy is to deliver services which are already provided by regional media and many other organisations in print and online.

BBC Management claims that the enhanced websites will serve areas significantly larger than local and regional newspaper circulation boundaries.

However, this statement does not stand up to scrutiny. It is significant that the proposed number of Local Video services (60, or 65 if the Welsh language services are counted) is close to the total number of UK “evening” newspapers (71). This indicates that the BBC’s enhanced sites will focus on major cities, towns and communities already served by regional daily newspapers and their sister websites, including those owned by Northcliffe.

The following are some of the proposed BBC sites whose catchment areas will replicate directly, or largely overlay, those of Northcliffe daily titles and their websites:

Bristol (Bristol Evening Post & www.thisisbristol.co.ukH )H

Derby (Derby Telegraph & www.thisisderbyshire.co.ukH )H

Leicester (Leicester Mercury & www.thisisleicester.co.ukH )H

Lincolnshire (Lincolnshire Echo & www.thisislincolnshire.co.ukH )H

Nottingham (Nottingham Evening Post & www.thisisnottingham.co.ukH )H

Staffordshire (The Sentinel & www.thisisthesentinel.co.ukH )H

The BBC claims also fail to take into account that, in many areas, regional newspapers have websites that cover the circulation areas of several newspapers. We describe these as Rural Aggregator sites. Once again there are examples of BBC Local Video services competing directly against Northcliffe websites which aggregate content from editorial teams attached to several of our newspapers. Below are some examples:

Cornwall (www.thisiscornwall.co.ukH )H

Devon (www.thisisdevon.co.ukH )H

Gloucestershire (www.thisisgloucestershire.co.ukH )H

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The map on the following page illustrates how the proposed Local Video services will duplicate Northcliffe websites offering local video news.

The same applies to other regional publishers. Almost all of the proposed BBC Local Video services compete directly against websites owned by regional newspaper publishers. The BBC claims to be introducing a new geographic level of video-based news content. This is simply not true.

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We noted during our consultation meeting with the BBC Trust that Mark Wakefield said the geographical crossover of the Local Video services with commercial provision was relevant and that it would be helpful to see this mapped out.

It is also relevant to point out that the BBC cannot claim distinctiveness in its current local and regional news output. Rarely does it have exclusive content. Northcliffe’s editorial teams are often frustrated that their stories, including exclusives, are picked up by the BBC and carried prominently on regional TV and radio bulletins and on the Corporation’s local websites.

Content on BBC regional TV, radio and web platforms are often remarkably similar to that in local and regional newspapers. We do not expect this to change. There is nothing in the Local Video proposal that indicates the BBC will be aiming to produce unique content, other than, perhaps, producer-assisted community video content, although ITV Local have collaborated with some community groups on content of this kind.

It is also our experience that, beyond news content, BBC local and regional services already offer direct competition to our own. Specifically, regional publishers have been concerned for some time about the extensive leisure and entertainment content, including listings, on the BBC’s local sites.

For example, the BBC Staffordshire and Stoke website’s Subculture section

(www.bbc.co.uk/stoke/subculture/index.shtmlH )H competes directly with local music coverage in The Sentinel and thisisthesentinel. The same BBC site’s comprehensive what’s on service

(www.bbc.co.uk/stoke/entertainment/whats_on/H )H is in direct competition with listings in the Sentinel and thisisthesentinel

(www.thisisthesentinel.co.uk/displayNode.jsp?nodeId=253872&command=newPageH ).H

The BBC Humber website entertainment section (www.bbc.co.uk/humber/entertainment/H )H focuses heavily on local music features, previews and reviews. This service largely duplicates the offering from the Hull Daily Mail which has a daily entertainment section featuring previews, reviews and listings plus a weekly leisure and entertainment magazine, the Guide, with more in-depth content, including event listings. The Raw Talent section of the

same BBC site (www.bbc.co.uk/humber/entertainment/music/raw_talent/index.shtmlH )H duplicates the service provided by the Hull Daily Mail’s Hull Vibe website

(www.hullvibe.co.ukH )H which includes videos from local bands, plus details of concerts, band profiles and photographs.

The BBC's website for the Bristol area (www.bbc.co.uk/bristol/entertainment/H )H competes directly with the Bristol Evening Post’s coverage. Much of the content on the site is in the form of listings with supporting editorial – similar to that which is offered by the Evening Post and Western Daily Press and their websites. An example of this is at

www.bbc.co.uk/bristol/entertainment/community_events/H .H

As mentioned previously, the Bristol Evening Post has launched an entertainment website

called Crackerjack (www.crackerjack.co.uk/H )H which is billed as the definitive guide to what's on in the region and could, in time, be rolled out across other Northcliffe centres.

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We note that leisure and entertainment content, including listings, is not specified in the Service Description for the Local Video proposition. The only possible category it could fall under would be that of “knowledge-building genre”, which includes culture and arts. However, coverage and listings of local amateur bands, family events, and attractions – many of which are commercial and involve an entrance fee – cannot conceivably be covered by the heading of “knowledge building” content.

Furthermore, such leisure and entertainment content is not included in the breakdown of existing BBC Local online provision given in Annex 1 of the Local Video Service Description. We presume, therefore, that the BBC’s extensive current local online leisure, entertainment and listings content goes beyond the remit for its local websites and should be discontinued.

There are other areas of duplication.

In Derby we have a site called You & Yesterday (www.youandyesterday.co.ukH ),H which uses wiki technology to allow users to help us build an interactive social history of Derbyshire.

Subsequently, the BBC launched Memory Share (www.bbc.co.uk/derby/memoryshareH )H which effectively replicates our site. You & Yesterday is not just a user service. We have a sponsor and we are hopeful of developing the site and its revenues further, but the BBC’s service hampers these ambitions.

For years our newspapers have repurposed our archives to make money. For example, the Western Daily Press often publishes one-off editions focused on nostalgia. We benefit commercially from newspaper sales and picture sales, while schools often use these publications as an educational resource. The BBC local websites are now replicating these platforms online, as shown by the examples below.

www.bbc.co.uk/somerset/content/articles/2008/07/04/train_fire_anniversary_feature.shtmlH H

www.bbc.co.uk/somerset/history/features/H H

15.U The BBC’s claims of distinctiveness

The BBC claims that the Local Video service will be distinctive in several ways. We disagree entirely.

The Concise Oxford English Dictionary defines distinctive as “individually characteristic; distinct from others of its kind”. We do not accept that the Local Video service will be clearly distinct from other services already available, or being developed, by commercial media.

Some of the claims of distinctiveness – such as the BBC’s regulatory regime and that the service will not carry advertising – can be dismissed without further consideration, as they simply could not apply to commercial media operators. However, on the former point, we should point out that Northcliffe’s support for the Press Complaints Commission and our strict adherence to the PCC’s Code of Conduct ensures the highest standards of accuracy, responsibility and accountability in our reporting.

In the document “BBC Local Video Distinctiveness Analysis” by Human Capital, produced on behalf of BBC Management, it is claimed that Local Video would be most distinctive on five

170 criteria. We reject these claims. In particular, we believe it is content, not universality of service or perceived quality that must define distinctiveness.

The BBC’s key claims of distinctiveness are as follows, with our responses below:

The service will be UK-wide

Only the BBC has the funding and resources to provide a credible UK-wide service from a single provider. This does not, however, make the service distinctive. Indeed, collectively, regional publishers provide what amounts to a comprehensive nationwide service of highly- credible, community-based, multi-media news provision.

Furthermore, the beauty of local life is that localities are different and have their own individuality. It is perverse for the BBC to propose a “one size fits all” solution across the whole of the country. This undermines the diversity that is reflected and celebrated fully in our local and regional newspapers and their digital platforms.

The geographical areas targeted are different from those of commercial media.

As we have demonstrated in this submission, this claim does not stand up to scrutiny. As made clear earlier in this submission, many of the areas covered by the proposed Local Video sites mirror those of regional newspapers and/or their websites. ITV Local is also endeavouring to offer coverage of a similar geographic scope through its “Go Local” services. The BBC’s service will not introduce a new level of local video news-gathering.

The BBC plans to partner with other local media providers.

By definition, partnership involves collaboration to mutual benefit, based on openness, transparency and active co-operation. There is no evidence that such “partnership” will exist in relation to Local Video. As explained later in this document, the BBC has no evidence of firm plans for partnership with local media providers in relation to these proposals, nor can it demonstrate any desire for commercial operators to enter into meaningful collaboration.

The BBC plans to provide assistance with the production of UGC.

We believe that this would be the only distinctive feature of the Local Video proposition. Regional commercial publishers frequently promote the activities of community organisations as part of our role encouraging vibrant community spirit. We are also increasingly acting as a platform for user generated video content. However, we cannot justify commercially the provision of active assistance in community video production.

We believe this activity would be consistent with the BBC’s public service remit and we have no objection to the BBC performing this role, in the limited way it is described in the licence application.

However, we must stress that distinctiveness applies strictly only to producer-assisted community videos, not to any other part of the Local Video proposition and certainly not to professional video journalism.

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We are also alarmed by suggestions in supporting documentation for the service licence application that users will be “encouraged” to add their own content to BBC local sites. The BBC should be precluded from encouraging and empowering the publication of non- producer-assisted UGC video, so as not to inhibit the development of UGC content and platforms by commercial media and community publishers.

The dangers of the BBC becoming a magnet for UGC (other than assisted production) concern both commercial operators and community-based sites. This is acknowledged in the Human Capital document, produced for BBC Management, which assesses the market impact of Local Video. It notes that “if the BBC at an early stage becomes the market focus for local community networking, it will be very difficult for alternative competing services to emerge”.

Assistance in the production of high-quality video content by means of a Community Producer could be bolted on easily to existing BBC’s regional provision, without the substantial extension of news, sport and weather content described in the licence application. This would also result in a very significant reduction in the cost to taxpayers.

The proposition involves production of bespoke content with high production quality, high visual appeal and exhibits in-depth journalism.

Once again, we reject this claim of distinctiveness.

Production of bespoke video content for the internet is now common across local and regional media and is increasing all the time.

Claims of “high production quality” and “high visual appeal” are entirely subjective. Indeed we contend that a significant proportion of video content produced by our journalists and those employed by other regional publishers is of high quality.

Human Capital acknowledges this in its Distinctiveness Analysis, produced for BBC Management, appear to agree with this point, stating that: “Ambitious plans for local video, and the falling costs of editing and production facilities suggest local newspapers will produce videos with increasingly high production values. This may cease to be a source of distinctiveness in the future”.

Human Capital also conclude that visual appeal “is not an important source of distinctiveness between the BBC video offering and alternatives”.

We believe the BBC is seeking to apply traditional broadcast quality measures to the very different medium of online video. Of course, such an approach increases significantly the resources, cost and time devoted to video production – hence the millions of pounds of taxpayers’ money the BBC proposes to pump into the Local Video services.

In the rapidly-evolving medium of online video, relevance and type of content are much more important than sophistication of production, the number of “cuts” per minute, or whether there is a studio backdrop. It is worth noting that the phenomenal growth in contributions to, and usage of, YouTube indicates that there is a significant public demand for self-produced video

172 content, the vast majority of which exhibits none of the quality criteria put forward in support of the BBC’s proposition.

We also challenge vigorously the claim of “in-depth journalism”. Video is not a medium that lends itself to in-depth story-telling or analysis. However, video can be very powerful to give the essence of a story in moving pictures and audio. The BBC simply cannot claim distinctiveness in “in-depth journalism” when regional media companies employ thousands of journalists on the ground in towns and cities the length and breadth of Britain producing probing, questioning, agenda-setting journalism for local and regional newspapers and their associated websites.

The combination of coverage Northcliffe and the other regional publishers can provide on a given subject or issue – news reporting, in-depth features, comment and opinion, still pictures, video, and interaction with local people and communities – across a range of printed and digital platforms is unrivalled and certainly distinctive in the field of local and regional media.

It is wrong to examine video coverage by regional media companies in isolation, especially when videos are accompanied on our websites by in-depth text coverage of the subject matter. Indeed, increasingly, video reports are embedded within text reports so that our website users can read the story in full and watch an audio-visual version which adds value to the story and enhances the user experience.

In Northcliffe Media’s consultation meeting with the BBC Trust, Mark Wakefield of the Trust referred to the distinctiveness criteria set down in the Trust’s review of bbc.co.uk. He said it was intended that these criteria would apply to all BBC online services going forward. These criteria are listed in the bbc.co.uk Service Review document. SOURCE: BBC Trust service review of bbc.co.uk

www.bbc.co.uk/bbctrust/assets/files/pdf/regulatorH y_framework/service_licences/service_revie ws/report_bbc.co.uk_review.pdf

Of the seven criteria, the ones that appear most relevant to Local Video are:

• Level of creative and editorial ambition (seriousness of intent, breadth or depth of subject matter). • Fresh and original approach. • Uniqueness (no one else provides this content).

We also challenge these measures of distinctiveness as they apply to Local Video.

As we make clear in this submission, the Local Video proposals certainly demonstrate how serious the BBC is about enhancing its provision of local news and information. However, we reject any claims that the BBC’s proposals will be especially creative. Indeed, there are many more creative examples from commercial media of delivery of local content, including in video format. Some examples are given in this document.

There is no evidence of a fresh or original approach in the Local Video proposals and the proposition is certainly not unique. This document sets out how provision of local news via video is now commonplace from commercial providers.

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In his discussions with us, Mark Wakefield clarified the issue of distinctiveness further by saying there was “no point in the BBC doing exactly what others are already doing” and that assessment of provision from the commercial sector was not just about the current situation but also the “likely direction of travel” as it was acknowledged that local news in video format was an “emerging market”. He said the Public Value Test would consider whether Local Video was “breaking the mould” or “merely replicating that which already exists”.

These are important points that the BBC Trust should consider fully. We believe the Local Video proposals will replicate existing provision. Local news in video format is already widely available and its provision from commercial media is certain to grow. The BBC’s Local Video proposition is certainly not a mould-breaking initiative.

Finally, on the issue of distinctiveness, we felt it was relevant that Mark Wakefield told us during the meeting that “high production quality is a given – a basic hurdle”. This undermines the claims related to production quality in Human Capital’s distinctiveness analysis document.

16.U Regional media video provision

The core delivery medium of the proposed BBC service – video – is in no way distinctive in the provision of local or regional news, or content generally. Indeed, over the past two and half years it has become commonplace.

Local and regional publishers seized the opportunity to deliver news that local people could watch as well as read as soon as broadband penetration, media usage habits and affordability of video equipment made this practical and viable.

Northcliffe has more than 100 websites and at least 50 of them will carry truly local video content by September 2008 when a rollout of our next generation thisis platform will be complete. Every site will be video-enabled. Local video content ranges from bulletins to news and sport reports, leisure and entertainment, community events and commercial content.

User generated video content is becoming increasingly significant. Our websites enable members of the public to upload their own videos - by computer and mobile - and reach a significant local audience with them. The example below from thisisgrimsby shows how several readers submitted their own video footage of a major blaze at the former Birds Eye factory in Grimsby. We provided the means for them to participate and report upon a major local news event.

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We continue to exercise editorial control over UGC video, but, unlike the BBC, we do not seek to edit it unnecessarily. We see our role as facilitators and enablers, empowering the public and local community to participate in the news process and providing a platform for them to reach a significant and engaged audience.

As mentioned previously, our editorial team in Hull pioneered local video news. Hull’s video content extends well beyond news and sport. Last year a Hull journalist transmitted video footage from the high seas while on board the Hull and Humber vessel during the Clipper Round the World Yacht Race. The Hull team also produced video footage of every contestant and round of Talent Trail, a local search for a star competition. Footage from these initiatives can be seen at dedicated sites created by Mail News & Media in Hull at

www.raceforglory.co.ukH H and www.talenttrail.co.ukH .H

In Exeter our journalists produce a daily video headlines package of news, sport and weather reports, as well as video news stories.

In Gloucestershire we have video platforms for the county as a whole (via

www.thisisgloucestershire.co.ukH )H and for the Forest of Dean (FTV, provided by the editorial

team at The Forester weekly newspaper, also available via www.thisisgloucestershire.co.ukH ).H

In Bristol our journalists produce video reports daily. There we have also teamed up with Bristol City Council to stream full council and cabinet meetings live to the public. These webcasts are promoted heavily in stories in print and online in advance of the meetings, thereby stimulating interest and engagement in local democracy and decision-making. Hundreds of people log on to watch debates on some of the more controversial issues. This

service can be viewed at http://content.thisis.co.uk/bristol107/multimedia/webcast.htmlH

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We intend to extend this “e-democracy” service across the thisis network. Our new Croydon

site (www.thisiscroydontoday.co.ukH )H will have a strong focus on e-democracy content, including video streaming from Croydon Council meetings, and video reports.

Of course, the principle of “e-democracy” also covers the many campaigns we conduct in print and online and the petitions that we carry on our websites. For example, on our thisisgloucestershire site we have run several e-petitions including those opposing post office closures; calling on Severn Trent to pay flood compensation; supporting free parking free in the Forest of Dean; and urging retention of the former Gloucestershire Regiment’s Back Badge.

On the more general subject of coverage of local democracy, current affairs and politics, it must be acknowledged that local and regional publishers have an outstanding commitment to these areas. Coverage of this content used to be primarily in print; now it features prominently across our multi-media platforms.

Typically, local and regional publishers are the only media represented at and reporting meetings of local councils and other bodies. Northcliffe and the other regional publishers perform a vital public service in reporting local issues of public concern, engaging citizens in these issues, and holding public bodies up to public scrutiny. No other media perform these functions with commitment or consistency. There is no evidence that the BBC will do so, even if it is permitted to increase significantly its local resources and content.

17.U Video content comparisons

We must point out major flaws and serious inaccuracies in the analysis of video services presented in the document “BBC Local Video Distinctiveness Analysis”, produced by Human Capital on behalf of BBC Management, in support of the Local Video licence application.

Human Capital assessed the distinctiveness of the BBC proposition – based on the West Midlands Local TV trial – compared to other local video news services available online. Those assessed included video reports from the Hull Daily Mail carried on the thisishull website.

This research is fundamentally flawed in that it compares BBC video content produced during a trial which cost £3m against video services from local and regional newspaper publishers who, because of commercial pressures, have introduced these services at low cost. The only exception to this is the Manchester Evening News, whose Channel M service has substantial costs, is run at a loss and is subsidised by Guardian Media Group.

The research compares BBC video produced during the Local TV trial on a selection of dates spread over three months with videos produced by the Hull Daily Mail between Friday, February 15, 2008 and Tuesday, February 26, 2008.

We challenge the validity of the research findings shown in “Figure 25 Table comparing the Hull Daily Mail with an average of the output from the six BBC trial offerings” (page 56 of the document).

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The “# new stories per day” figure in the report for the Hull Daily Mail is roughly accurate at 2. However, the accompanying statistic “Ranging from 0 – 11” videos uploaded per day is wrong. We have never uploaded 11 videos on a single day. Actually we uploaded between zero and 4 videos daily during this period.

The “average length of stories” is wrong. We checked the times for all the videos we still have data on (14 out of 21 during this period) and found that the average video duration for the 14 videos is 3 minutes and 3 seconds, not 0.23 as stated. It is obviously ludicrous to state that the videos ran for an average of just over 20 seconds – no story can be told adequately in so short a time.

The finding regarding “# people interviews” is inaccurate. The findings claim 0.1 interviews per video is the average. This would mean that, based on the report’s calculation of a total of 24 videos during the period (i.e. on average 2 a day during the 12-day period), less than three interviews were conducted by the Hull Daily Mail’s video journalists during this time. We have checked this against the 14 videos we can retrieve and there were 15 people interviewed in these packages, which gives an overall average of 1.1, not 0.1 as claimed.

The finding that the Hull Daily Mail’s video material was all produced in “the studio” is also grossly inaccurate. The videos we uploaded during this time included eight sent back from the Hull & Humber yacht during the round-the-world Clipper race, shot onboard and in port in China. Videos produced during the assessment period also included three reports from the Talent Trail search for a star competition, all shot in various clubs in Hull, three sport packages and three news packages, all shot on location. In fact, only the four news bulletins produced during this period were filmed in the office (the Hull Daily Mail prefers not to use a dedicated studio).

Furthermore, we dispute the assertion that the Hull Daily Mail videos displayed “100% low visual appeal” and also that the “depth of coverage” is “100% low”. These findings are based totally on arbitrary performance measures which we believe are not relevant to the Hull team’s successful approach to multi-media coverage.

It is relevant to mention that the Hull Daily Mail won the Publishing Innovation of the Year Award in the 2006 Regional Press Awards and was named Innovative Newspaper of the Year in the 2007 Newspaper Society Awards. Both accolades recognised the Hull team’s achievements in video journalism.

We fail to understand how and why so many of the findings are so seriously inaccurate. The accurate data for Hull Daily Mail video uploads during the assessment period is detailed below. We can prove that this information is robust and reliable.

177 # of Title Name Title ID Plays Publish Date Interview with Rachel Axcell completing repairs in Quingdao 1431497312 78 02/25/2008 Jayne Gill from Hull joins the Hull & Humber in Quingdao 1431499821 22 02/25/2008 Skipper interview before departing on Leg 5 1431454737 15 02/25/2008 Joe Dinsdale silence 1431454704 406 02/24/2008 Heat 8: February 21, Willows Club 1417339437 340 02/22/2008 Video bulletin - Thursday, February 21 1417340893 1,237 02/21/2008 Meet the Newton's 1417342381 857 02/21/2008 Heat 7: February 19, West Hull Liberal 1417342380 225 02/21/2008 Jake's art of goal-kicking 1417342321 291 02/20/2008 Danny Watson appears on Chinese TV 1417338313 122 02/20/2008 Bulletin Wednesday 2002 1417340820 69 02/20/2008 Bulletin Tuesday February 19th 1417342267 561 02/19/2008 Deano backs Premier dream 1417342270 220 02/19/2008 Interview with Rachel Axcell in Quingdao 1417338198 157 02/18/2008 The Hull & Humber arrives in Quingdao - part 2 1417340727 60 02/18/2008 The Hull & Humber arrives in Quingdao - part 1 1417338196 57 02/18/2008 Skipper Danny Watson describes the conditions on Leg 4 1417338197 47 02/18/2008 Bulletin Friday February 15th 1417340577 796 02/15/2008 Tribute to Joe Dinsdale 1417342078 709 02/15/2008 Heat 6: February 14, Chambers Club 1417338071 575 02/15/2008 Sniffing out drugs 1417339067 102 02/15/2008

There is a further error which undermines the credibility of the analysis. In the table on page 56 the Hull Daily Mail’s “potential population covered” is given as 60,000, which is clearly wrong, as the daily circulation of the Hull Daily Mail is 56,208 (ABC, July-December 2007).

Because of the many serious inaccuracies we have highlighted, the comparative analyses of video providers must be considered unreliable and inadmissible as part of the review of the BBC Local Video licence application. Indeed, the credibility of the entire Human Capital distinctiveness analysis document must be seriously questioned.

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18. The BBC’s public service role

There are, of course, aspects of the BBC’s present local activities that we applaud and that are certainly distinctive. These include the BBC’s open centres in major locations which allow citizens to use the Internet and encourage active citizenship and learning.

Northcliffe has worked in partnership with the BBC on a limited number of activities, for example Children In Need, for which the Hull Daily Mail has operated the Humberside regional call centre for many years. We have also collaborated with the BBC and other parties on business and education initiatives in some locations.

We applaud some of the BBC’s activities which are non-commercial, beyond the scope of private operators and entirely consistent with its public service role. An example is BBC Blast, which is currently touring UK locations. It gives young people the opportunity to engage in creative arts and unlock their talents, supported by industry professionals and using a mobile e-learning studio and performance marquee. SOURCE: BBC Blast on tour

www.bbc.co.uk/blast/ontourH

We acknowledge that there are services that wouldn’t exist without the BBC and there is undoubtedly a limited role for the BBC in provision of local news and information. However, we feel we must now challenge the proposed massive further advance of the BBC into areas already covered by commercial organisations, including regional media.

We accept the increasingly competitive media marketplace. We acknowledge the need for investment of hard-won revenues into the development of existing and new products and services. But, in this age of digital revolution in media, we have come to regard the publicly- funded BBC as the single biggest competitive threat to our audiences, targeting directly our consumers.

We believe that the BBC has moved far outside its public service remit and we object strongly to its use of public funds to attempt to supplant our position as the leading providers of local news and information.

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19. An uneven playing field

While the BBC proposes to spend millions of pounds of taxpayers’ money employing hundreds more local content-gathers, we have largely integrated digital tasks with our print operations. That integration has been essential in order that we could afford to develop our digital products and services in a fiercely competitive commercial environment.

Across Northcliffe our journalists file breaking news online through the day, produce video and audio reports, differentiate content for the web, stimulate interaction and add value with photo slideshows and other multi-media elements. All this in addition to producing content and pages for our newspapers and other printed publications.

We are now doing much more with fewer people than we used to have. We have no choice in this – the challenges of our business make it essential.

The BBC is proposing to replicate – or indeed substitute – our journalism through employing hundreds of dedicated video journalists, in addition to existing resources focused on regional TV, radio and Internet services, which are currently provided at a cost to licence fee payers of £100m.

It is clear that the BBC plans to use public funds to effectively buy a much greater share of the market for local news and information online. Commercial operators simply cannot compete with the BBC’s financial muscle. Nor can we afford to employ an army of additional, dedicated video journalists to populate our sites.

The BBC is already a significant player in the local news and information market and is disseminating its content through multiple streams – broadcast television and radio, digital TV and radio, online and broadband interactive services.

The BBC is

• Leveraging the world’s most powerful media brand to develop its local and regional activities. • Using its unrivalled funding and opportunities to cross-promote its services. • Exploiting its unrivalled distribution network. • And capitalising on its ability to operate outside the limitations of global, national or local economic markets i.e. the BBC is not affected by adverse global or UK economic conditions or by trading challenges in the local communities it is increasingly focusing upon.

Our major concern is that the basis for competition between the BBC and regional publishers is grossly unfair.

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Although we are a major regional publishing company, how can we compete with the BBC’s funding, resources and brand? The BBC’s licence fee income is now in excess of £3bn p.a. Its funding and market influence is colossal. It has the muscle to undermine even the most powerful commercial providers. SOURCES: Guardian.co.uk – BBC licence fee income tops £3bn

www.guardian.co.uk/media/2006/jul/07/bbc.broadcasting1H BBC annual report and accounts 2007/2008

www.bbc.co.uk/annualreportH

The BBC’s online audience is enormous, both in the UK and abroad. Pete Clifton, the BBC’s head of editorial development for multi-media journalism, disclosed recently that the BBC News website had 17 million unique users per week, with more than half of them in the UK. This prompted The Guardian’s director of digital publishing, Emily Bell, to describe the BBC News website as “now the biggest online newspaper, not just in the UK but in the world”. This huge audience for national and international news gives the BBC a massive advantage in its ambitions to boost its position as a provider of local and regional news and information. SOURCE – Guardian digital director: BBC site is “state-funded intervention” in US ad market

www.pressgazette.co.uk/story.aH sp?sectioncode=1&storycode=41185

Other publishers have voiced serious concern about how the BBC and its massive funding and reach are undermining commercial websites. Notably, Ed Roussel, the Telegraph Media Group’s digital editor, said the BBC should be conscious of its impact on the private sector, especially when the industry was in a “precarious moment”. SOURCE: “BBC colossus threatens to undermine other websites”

www.pressgazette.co.uk/story.aH sp?sectioncode=1&storycode=41350

More recently, the Radiocentre – the trade body that lobbies on behalf of almost 300 UK radio stations – said the BBC was jeopardising the future of commercial media operators. It said the Local Video proposals would have a “devastating impact” on local radio stations. SOURCES: Press Gazette – Commercial radio body opposes BBC local video plan

www.pressgazette.co.uk/story.aspH ?sectioncode=1&storycode=41686&c=1 Guardian.co.uk – Commercial radio attacks BBC local online video plans

www.guardian.co.uk/media/2008/jul/16/commercialradio.bbcH

For decades commercial media operators have been content to co-exist with the BBC, but they have become increasingly alarmed by the BBC’s ambitions and its ability to distort commercial markets. The BBC has become over-mighty and now has a significant impact on every commercial media company in the UK.

A further example of the unfair advantage the BBC enjoys in funding and resources is the £3m it invested in the Local TV trial in the West Midlands, which led to the Local Video proposal. This is a sum that simply could not be contemplated by regional media companies for what was essentially a research and development project.

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Using tax funds to compete head on with regional publishers distorts the competitive environment. The BBC is using its many advantages, not least generous public funding, to establish significant positions of market strength in the provision of local news and information.

As explained earlier, Northcliffe is developing a wide range of digital services to complement our printed portfolios. However, we can only commit to these investments if we have the prospect of achieving sufficient market share to make them commercially viable. The BBC’s plans threaten to close off this prospect, paving the way for the Corporation to become the market leader in local and regional digital media.

The Government makes great play of encouraging entrepreneurship and private sector development, yet the publicly-funded BBC is threatening the successful development of regional publishers and other commercial operators.

We welcome private competition. We are happy to compete fairly for audiences and revenues with all commercial operators. However, we believe competing against the vast, publicly-funded resources of the BBC is in no way, shape or form competition on a level playing field.

20. Promotion and marketing

The BBC’s unrivalled power against other media brands is also demonstrated by the Corporation’s spending in the areas of marketing and promotion. According to a Times Online article of September 2006, the BBC spent £76.1m in 2005 on marketing, on-screen promotions, consumer research and publicity. SOURCE: Times Online – Does the BBC spend too much on self-promotion?

www.timesonline.co.uk/tol/comment/article651331.eceH

The BBC can also leverage enormous cross-promotional power, at zero cost, using regional TV and radio to promote their current local websites and proposed enhanced local services.

In contrast, there are limited budgets and opportunities for regional media to build their digital brands – predominantly these are through their local newspapers.

Therefore, Northcliffe is investing significant sums in building its digital platforms and services, many of which are new and have, as yet, limited market awareness. Northcliffe and DMGT-owned classified partners have invested £4m in 2007/08 in marketing and promoting their digital brands. This investment has been in TV, outdoor, trade marketing, public relations, paid search and merchandising.

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Extensive marketing to establish and build awareness of ‘this is’ brand & our core classified brands

21. Site structure and functionality

We note that, in the detail of the Local Video Service Description, it is stated that issues around the structure and functionality of the local sites are not reliant on approval of the Local Video proposals. These are described as part of the ongoing modernisation of bbc.co.uk.

We object strongly to this distinction and challenge its validity. We believe that site structure and functionality are as relevant as content to the potential market impact of the BBC Local Video proposals. The BBC’s separation of these issues is false, unjustified and should be subject to independent review.

The threat to our audiences and revenues is not just in terms of content on the BBC’s proposed sites, but how that content is accessed and how these sites can be localised and personalised.

The Service Description says that improved navigation on the BBC local sites would include an interactive map of each of the local areas, allowing users to locate text, audio and video content easily. No specific references are made in the Service Description or supporting documentation to geo-tagging of content and functions to allow users to localise content. However, briefings by BBC Management in advance of the launch of the licence application indicated these would be key features.

Furthermore, it is relevant that the main BBC site, bbc.co.uk, already has the facility for users to localise the site by setting their location by postcode or place name, as shown below. The image shows how the bbc.co.uk homepage can be customised to make local news headlines and local weather prominent.

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Note how localisation functionality is used to funnel users from the BBC’s main website, bbc.co.uk – which has 17.2m weekly unique users - to the BBC’s local sites. This illustrates the BBC’s unrivalled ability to drive and direct traffic within its online environment. SOURCE: Guardian.co.uk – BBC annual report: BBC website reaches 33.2m worldwide users

www.guardian.co.uk/media/2008/jul/08/bbc.digitalmediaH

It is clear that the BBC is targeting local consumers both through local content and by means of functionality that enables and facilitates access to this content.

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22. Distribution channels

We are deeply concerned not just by the scope of the Local Video proposals via broadband, but also by the portability of this platform and content to other distribution channels.

As we have demonstrated, all media are now locked in a battle for time and attention. This battle crosses traditional media boundaries. The proposed massive extension of BBC local content and the ability to use this across platforms would significantly enhance the BBC’s position as a provider of local and regional news and information, at the expense of Northcliffe and all other commercial media operators.

The Service Description says that the Local Video content would be offered in a form “optimised for mobile usage”. Furthermore, it says the BBC will use location-based technology, such as GPS, to deliver local video content to mobile devices, based on a user’s location or preferences.

This means that Local Video would be available to consumers wherever they are, delivering an unrivalled on-the-go service subsidised by the taxpayer, presumably available either free or at non-profit making rates.

This would be a service that no commercial regional operator could rival in the crucial but, as yet, embryonic medium of mobile. Indeed, it would give the BBC first mover advantage which would be likely to result in market domination in an important digital medium where no such service of local news and information has yet to be proven to be commercially viable. If the BBC is permitted to extend the Local Video service to mobile, it is extremely unlikely that any commercial operator would have the scope to develop commercially viable local news services delivered to mobile phones and other devices.

As previously mentioned, Northcliffe uses mobile text as a routine competition mechanic and has had some success with news alerts by mobile.

We have further ambitions to develop new audiences and revenues from mobile but we are concerned that our potential to do so may be constrained by the BBC establishing an unassailable position for local news and other content in this medium.

We are examining the potential for the development of mobile internet sites for our regional titles. Initially, revenues would be limited by relatively low usage of these new mobile sites, but there may be sponsorship revenues from channels such as Sport. Longer term, we believe that, if we can build significant number of users, it will be possible to unlock new advertising revenues, perhaps packaged with our websites and possibly other platforms.

Commentators certainly believe the potential for mobile as an advertising medium is considerable, as highlighted by the following articles: SOURCES: The Economist.com - Mobile advertising – the next big thing

www.economist.com/business/displaystory.cfm?story_id=9912455H Wireless Week – Mobile advertising reaches for the sky

http://www.wirelessweek.com/Mobile-Advertising.aspxH

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Turning to other platforms, we oppose strongly the repurposing of Local Video material for regional TV broadcast. This would reinforce further the BBC’s leading position in regional television news, at the expense of ITV, which is already at a massive disadvantage in terms of funding, resources and content and whose commitment to regional journalism appears to be waning. As has been proven in Hull, stronger BBC regional TV programmes would also damage regional newspaper publishers.

We see no case for making Local Video content available via the BBC iPlayer. It is well documented how enormously successful the iPlayer has been and we suggest usage of this medium would distort further the provision of local content and place the BBC in a position of unfair advantage.

We are also concerned by the statement that it is likely that, at some point, Local Video content would be made available on TV via internet protocol, subject to obtaining any necessary consent from the BBC Trust. Once more, this would put the BBC at a significant and important advantage to regional commercial publishers as convergence continues to transform consumers’ media usage and habits.

23. Impact on plurality and diversity of local coverage and voice

Local and regional publishing is a media sector characterised by diversity, innovation, passion, trust and unrivalled connection with communities.

Northcliffe’s newspapers and websites act as the champion for, and on behalf of, local communities, campaigning on issues of interest and concern to local people. This is a role that the BBC is precluded by its Royal Charter from undertaking. Any diminution in the audience and role of regional media companies would affect adversely their ability to reflect the concerns of communities and campaign on issues of local importance.

For example, in 2003 the Hull Daily Mail successfully mounted a campaign to win a Ministry of Defence order that secured the future of East Yorkshire’s biggest private employer, BAE Systems in Brough, near Hull, and its workforce of 2,000.

Similarly, last year the Derby Telegraph harnessed support from thousands of readers and from the civic and business communities to save 200 Inland Revenue jobs that were due to be relocated from Derby.

In 2002 the Western Daily Press raised £115,000 for a hovercraft, shortly after five-year-old Lelaina Hall drowned after becoming stuck in the treacherous mud at Berrow, near Burnham- on-Sea, Somerset. Her story inspired families and businesses across the West to collect funds for the Spirit of Lelaina, a mini-hovercraft able to cross the dangerous shore at speed and rescue trapped people. Last year the smaller Light of Elizabeth was added to the fleet – named after Lelaina’s sister. It costs about £25,000 annually to run the two hovercraft and the Western Daily Press continues to raise a considerable proportion of these funds, either through fund-raising events or by raising awareness.

Last year the Grimsby Telegraph raised £250,000 in just six months to equip a new Breast Cancer Clinic at Grimsby’s hospital. The campaign pulled the community together as never

186 before. In February 2008, the new Pink Rose Suite (incorporating a room named after the Grimsby Telegraph) was named the best in the country for speed of referral and treatment. The campaign contributed to the Grimsby Telegraph being named as the Newspaper Society’s Community Newspaper of the Year.

Also in 2007 the Leicester Mercury raised £65,000 to save the Leicester Bone Bank from closure. This is a vital service for patients throughout the country. It stores bones which are used in life-changing surgery for people who have conditions such as bone cancer and chronic arthritis.

Local people and communities support such activities because of the relationship they have with their local and regional newspapers and their associated websites. It is a unique relationship founded on trust and community connection.

Despite the growing influence of the Internet, local and regional newspapers remain by far the most popular source of information for people about the area in which they live.

A UK poll by YouGov in 2007 found that local or regional newspapers were rated top by 52% of respondents – more than three times as many as the next most popular choice, BBC TV news. Only 7% rated their local BBC website as best. Even in the 18-24 age group, 41% rated local newspapers as best for information about where they live – three times as many as favoured their local BBC website. SOURCE: Press Gazette – Survey finds regional press is most popular source for local news

www.pressgazette.co.uk/story.aH sp?sectioncode=1&storycode=37543

Recent research commissioned by the Newspaper Society has shown how local newspapers and their websites influence local life positively. They are rated top of a range of media for “feeling part of your local community”, “having pride in the local area” and “knowing about local institutions, services and facilities”. SOURCE: Newspaper Society – Local Matters research: How media influences different aspects of people’s lives.

www.newspapersoc.org.uk/localmattersresearch/media-implications.aspxH

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Both the Prime Minister and the Leader of the Opposition have praised the role of local and regional media and their positive contribution to society in articles in support of the Newspaper Society’s Local Newspaper Week.

“Local newspapers are right at the heart of Britain’s local communities, examining the issues that matter, seeking out local people’s views, and representing their interests. That is why the readers of local newspapers see them as such honest, responsible and accurate sources of news.” Prime Minister Gordon Brown, May 2008

“The regional press is the most trusted and believed of all media – in some cases they are trusted more than what people watch on television. I think this is because local papers write about the issues that affect people on a daily basis and, generally, adopt a constructive approach to reporting events. Local papers often form part of the community, share its values and so cannot afford to be intrusive or sensational.” Leader of the Opposition, David Cameron, May 2006 SOURCES: Newspaper Society – PM article for Local Newspaper Week

www.newspapersoc.org.uk/Docs/LNW-2008_Gordon-Brown.docH Newspaper Society – Message for Local Newspaper Week by David Cameron

www.newspapersoc.org.uk/Default.aspx?page=1674H

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Speaking at the Newspaper Society’s annual lunch in May 2006 Mr Cameron endorsed the Society’s concerns over the BBC encroaching further into local news. He said: “I am a fan of the BBC … but having said that, I do think there is a problem with the BBC over-extending itself. We’ve all seen, in our own constituencies, small internet businesses, often involved in education or other information provision, working away to create a market, to make some money, and then the BBC comes along and squish, like a big foot on an ant, and that business goes out. And I think that we need to look at ways of actually making sure that the BBC doesn’t over-extend itself.” SOURCE: Newspaper Society – David Cameron endorses NS campaign against BBC “over- expansion”

www.newspapersoc.org.uk/Default.aspx?page=1682H

We share Mr Cameron’s concerns and those of many others. We believe the proposed significant development of BBC local services would diminish significantly the audience and, therefore, influence of local and regional publishers, to the detriment of local communities and the plurality and diversity of local media provision.

We believe this would be a further step to the BBC becoming the foremost player in local and regional news and information, completing its domination of the UK media in all sectors other than print publishing.

Diverse, decentralised, community-focused commercial providers, rich in both heritage and innovation, would be displaced by a centralised, homogenised, disengaged and dispassionate, publicly-funded monopoly provider.

Although Northcliffe owns dozens of newspapers, we believe passionately in a decentralised policy. Our titles are all unique and individual in their approach, content and design. All have editors who live in and are deeply committed to their localities.

Necessarily, our websites have more uniformity but they also reflect the issues and interests of the communities they serve and the passion our teams across England and Wales have for their local community.

The BBC has no such local identity or affinity. The BBC’s immense power can have a significant impact upon local markets, but it lacks the individuality, character and local connection of the publishing businesses it threatens.

24. A case study: The floods

The unique role of regional newspapers and their digital platforms was demonstrated powerfully during the 2007 floods.

On June 25th last year a month’s rain fell in just a few hours in the Hull area. More than 14,000 homes in Hull and the East Riding of Yorkshire were flooded – the most of any area in the country. More than a year later, over 1,800 families are still in temporary accommodation.

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The Hull Daily Mail and its associated digital platforms covered the story from a multi-media perspective. The results demonstrated that local people continue to turn to local and regional media for news, information, analysis and support.

The Hull Daily Mail sold 45,000 additional copies in the first five weeks after the floods and traffic on the thisishull.co.uk website rocketed. The public also participated in the story as never before – contributing almost 500 readers’ photos, all of which were published in print or online.

But, just as important, our staff in Hull were there to help by:

• Collecting and distributing 6,000 household items to flood victims. • Supporting and contributing to flood funds. • Campaigning for action to prevent a repeat of the devastation. • And getting action for scores of residents faced with huge increases in insurance premiums or withdrawal of flood cover.

On the first anniversary of the floods the Hull Daily Mail launched yet another campaign – “Back Home” – which highlighted the plight of those households still displaced and pressed for everything possible to be done to return them to their properties without further delay.

In Gloucestershire, the flooding knocked out a water treatment plant and left thousands of people without running drinking water. As the crisis unfolded, up to 33,000 people in a 24- hour period logged on to Northcliffe’s thisisgloucestershire for vital updates on flooding, road closures, weather forecasts and water supply points.

Northcliffe’s Gloucestershire Media used its print and online portfolio to launch a fund for flood victims which has so far raised more than £1.7 million.

Our newspapers and websites did what no other media – or any other organisation – could do. We brought the community together and used our considerable influence to represent local people at a time when they needed support desperately.

Of course, the BBC played a positive role in flooded areas, but largely as an impartial observer and provider of information. The BBC’s coverage lacked the passion, the community connection and the perseverance which characterised our role at the heart of the communities we serve. Indeed the BBC’s charter, which enshrines impartiality, precludes the BBC from engaging so proactively and campaigning so fervently in the interests of local people and their communities.

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25. Implications for employment of journalists

Based on information provided by the BBC, it appears that there will be, on average, 6 video journalists for each of the 60 Local Video services at the end of the proposed 5-year rollout in 2013. This will be in addition to around four staff per service for existing BBC local websites.

The BBC will therefore be putting into the field a total of approximately 360 new audio-visual content-gatherers.

The BBC claims the net spend is zero, as the services will be funded fully from savings in the Nations and Regions budget. However, we do not believe this has been explained adequately. There is no clear indication of any existing local and regional content-gathering resource being withdrawn. Therefore we are dubious about the claims of no additional spend on local and regional services.

We have posed several questions to BBC Management in relation to this and requested specific details on the costs of the proposed new service. These questions have been re- routed via the BBC Trust and we await answers to them.

Our scepticism about the claim that Local Video will be delivered at no additional cost to BBC Nations and Regions is certainly understandable given the recent revelation that bbc.co.uk exceeded its budget by £36m (48%) in 2007-8. The BBC Trust said this was a “serious breach” of the bbc.co.uk service licence. Despite this, the BBC plans to almost double the cost of bbc.co.uk to £150m within two years. SOURCE: Guardian.co.uk – Watchdog accuses BBC chiefs of breaching licence as website overspend hits £36m

www.guardian.co.uk/media/2008/may/30/bbc.mediabusinessH

Clearly the BBC is proposing a significant increase in journalistic resource in the regions. However, we assert that the proposed additional employment of journalists by the BBC, paid for by the taxpayer, could well be at the expense of journalists’ jobs in commercially funded media companies.

Over recent years we have seen a significant reduction in total employment in Northcliffe, including of editorial staff. In June 2004 Northcliffe employed a total of 1,667 full and part- time editorial staff. In June 2008 this had reduced to 1,413 full timers and part-timers. These figures eliminate the effect of acquisitions and disposals.

The changing nature of our business and increased competitive pressures have forced us to focus on costs and become ever more efficient in every area, including editorial. However, we must stress that there has no reduction in editorial coverage of communities or quality of journalism. In fact, we are producing more journalism, more efficiently, by refining and reinventing processes, adopting multi-skilling, sensibly multi-purposing content, gaining benefits from new technology and embracing UGC.

We believe that significant additional competition from the BBC will only exacerbate pressures on commercial media and damage their revenues, as explained in this document.

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This could result in a net loss of local and regional journalism jobs, as well as a damaging reduction in plurality of coverage and voice in local communities.

We also challenge how cost-effective the BBC’s proposed investment will be. The proposal is for the BBC to spend £23 million annually on the Local Video services at maturity in 2013. This is in addition to the £100 million already spent annually by the BBC on regional services.

Given that much of the infrastructure, such as buildings, is already in place, we presume that a significant proportion of the annual cost of the Local Video services will be salaries related to the approximately 360 additional content gatherers.

To put this into perspective, Northcliffe’s total annualised salary bill for our 1,440 full-time equivalent editorial content and production staff, including all Editors and editorial managers, as at March 2008 was £37.3m - just 62% more than the BBC intends to spend on the Local Video services, which will employ a quarter of our number of content staff.

We believe this is a much more valid comparison than those made by the BBC between the Local Video budget and total costs of regional media groups.

It is therefore clear that Northcliffe is able to provide local news and information services to local readers/users and communities across multiple print and digital channels much more efficiently than the BBC and at zero cost to the taxpayer.

Furthermore, we suspect strongly that, if the BBC is permitted to expand its services and employment to roll out Local Video, it will inevitably target our staff, in whom we have invested significant time and money training in multi-media skills. This will have a further damaging impact on Northcliffe and other regional publishers.

Moreover, competition from the BBC will exacerbate significant recruitment problems we and other regional publishers face in some locations. For example, in our Kent business we have had a news editor vacancy open for months and experienced difficulties recruiting an acting editor to cover maternity leave. This is largely because of the level of existing competition for editorial staff in the Kent area and its close proximity to London.

Employment by the BBC of a further six journalists for the Kent Local Video service will add to our recruitment issues, especially as, because of its public funding, the BBC is able to pay salaries much higher than commercial media in the regions can afford.

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26. The BBC’s “partnerships” and self-imposed limitations

The BBC has set out what it describes as partnership arrangements with commercial media and self-imposed limitations on the Local Video service. Northcliffe sees no value in these “olive branches”.

During the Local TV trial in the West Midlands there was scarce evidence of partnership or co-operation between the BBC and local and regional newspaper publishers. The BBC’s Local Video Service Description and supporting documentation refer only to:

• The BBC carrying a run-down of local newspaper headlines during the trial. • A photographic competition run with the Shropshire Star and some collaboration on a “letter of the week” initiative. • And the signing of a Letter of Intent with Trinity Mirror. However, there is no evidence of concrete collaboration resulting from this understanding. Indeed, in his assessment of the Local TV trial, Professor Roger Laughton said that Trinity Mirror’s conclusion after the pilot was that “nothing substantial” had been achieved.

Prof Laughton further noted in his report that “uneasy relationships with local press” was a “weakness (which) will need to be addressed if services are rolled out nationwide”.

However, the Service Description for Local Video adds only that the BBC “would seek to develop appropriate editorial initiatives with local news providers”. There is therefore no significant evidence of partnership from the Local TV trial, or substantive, mutually beneficial proposals going forward for partnership with commercial providers. Neither is there evidence that the BBC has addressed the concerns of regional publishers in any meaningful way.

The weakness that Prof Laughton said would need to be addressed for a nationwide rollout to proceed has not been addressed. Nevertheless, a nationwide rollout is being proposed.

The BBC did not consult Northcliffe in any way on what partnership arrangements and service limitations would be acceptable to us, prior to the announcement of the Local Video plans, despite claims in the BBC’s supporting documentation that BBC Management has “spoken to various stakeholders in order to help maximise the public value of the offer”. We understand that consultation did not take place with the other major regional groups or with the Newspaper Society.

True partnership can only exist in an atmosphere of openness and transparency and when organisations co-operate to mutual benefit. None of these conditions exist in the relationship between the BBC and the regional media industry.

The BBC’s lack of openness is demonstrated by its failure to consult with other media groups and by the leaking of the Local Video plans to the trade media in advance of their public disclosure.

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The following links are to detailed reports of the BBC’s plans before the launch of the Local Video licence application on June 24th 2008. They could only have resulted from briefings by BBC Management. SOURCES: Press Gazette – BBC reveals prototype for ultra local news website

www.pressgazette.co.uk/story.aspH ?sectioncode=1&storycode=40012&c=1 Online Journalism Blog – More geotagging: sneak preview of prototype “BBC Local”

http://onlinejournalismblog.com/2008/01/17/sneak-preview-of-prototype-bbc-local/H Press Gazette – BBC plan to put 150 camera teams on local news

www.pressgazette.co.uk/story.aH sp?sectioncode=1&storycode=41207 Press Gazette – BBC “local” plans to make 300 jobs

www.pressgazette.co.uk/story.aH sp?sectioncode=7&storycode=41221

We discussed the BBC’s proposed “partnership” arrangements during our consultation meeting with the BBC Trust. During that meeting Mark Wakefield said it was important to assess whether the BBC’s proposals had been “considered in isolation”, rather than developed through consultation with commercial providers. He also said the BBC should show a “real ambition for partnership and the strategy to pursue it” and that “partnerships are partnerships. They can’t just be something that the BBC proposes for others to join in with, whether they like it or not”.

As explained above, the BBC’s “partnership” proposals have indeed been “considered in isolation” without consultation with, or agreement from, commercial providers. We believe BBC Management has no genuine desire for partnership with the commercial sector, does not have a coherent strategy to pursue partnership, and has no evidence that it has gained support from commercial providers for working in partnership.

Northcliffe cannot see any business benefit from entering into partnership with the BBC in relation to the Local Video proposals. The benefit of any partnership is vastly weighted towards the BBC, largely through the credibility co-operation would give to the BBC’s false claims that their local plans will complement services provided by regional media. As we have made clear, we believe the BBC’s proposed services would replicate, or substitute, our own.

The BBC’s “partnership” and service limitation proposals are described in the Local Video documentation as follows. Northcliffe’s views on them are below.

The BBC has specified a list of directly commercial “no go” areas for the enhanced sites, to include content such as business listings, holidays, jobs and property.

The BBC has no place providing such content. BBC Management knows that any suggestion of extending services to such obviously commercial areas would have no chance of surviving scrutiny. Indeed, it would undermine the credibility of the Local Video licence application to include such content.

Video stories would be limited to up to 10 each day, running for up to 20 minutes per day in total. There would be up to 3 daily video bulletins for News, Sport and Weather

194 each day. The sum total of video stories and bulletins would not exceed 26 minutes of content per day.

For the BBC to present this as a limitation or concession is ludicrous and indicates how far divorced BBC Management are from commercial reality.

No other media organisation could afford to have sufficient numbers of dedicated video journalists to produce so much audio-visual content on a daily basis. Northcliffe’s most advanced centre for video journalism is Hull, which has 30 trained video journalists. Even when there have been major local stories, such as the floods or Hull City’s promotion to football’s top flight for the first time, the Hull editorial team did not manage to produce 10 videos a day. Typically, they will produce 2 or 3 a day.

The reason is simple – the Hull video journalists and others across Northcliffe also have to write stories and features and supply still photographs for our newspapers, other printed publications and our ever-growing range of digital platforms.

Northcliffe’s video journalists are multi-media journalists because commercial reality demands that they have to be. Only the BBC with its privileged position of generous public funding could propose employing hundreds of additional dedicated video journalists to produce content which would replicate provision by regional media.

Live streaming would be limited to 10 key local events in each area per year.

We are concerned by this proposal, particularly if it were to involve exclusivity of live streaming video from any event. We would require a commitment that other media organisations would be offered comparable access and facilities to the BBC.

The BBC would make the majority of its branded local video content available to other local news sites, allowing “the embedding of content into other websites on fair, reasonable and non-discriminating terms subject to BBC syndication guidelines and terms and conditions”.

Previously, we had understood that this content would be hosted on a BBC server and traffic to it would therefore be retained by the BBC. In response to a question we posed, BBC Management has said that its video would be made available for embedding on local news websites and use of that video would be reflected in the statistics of those sites, while remaining hosted from a BBC server. However, we note that the BBC says “the exact model for syndication of the video content is still under development”.

We are concerned that this would mean that regional media would effectively be promoting BBC content and the BBC as a provider of local news and information. As the BBC is a major competitor for audience, this would clearly be detrimental to regional publishers.

This proposal would also enable some local publishers who, unlike Northcliffe, have not invested significantly in video provision, to carry video content without cost. This would erode the competitive advantage of progressive local and regional publishers who are committed to developing multi-media services for consumers and advertisers.

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Inevitably, it would also lead to a plethora of new publishers seeking to develop the content and credibility of their websites at zero cost by using BBC content. This would result in further damaging distortion of the market for local news and information. This danger is acknowledged in the Human Capital document on the market impact of Local Video which says that “local newspapers and others investing in their own journalism may find this widely erodes their competitive advantage”.

The BBC would establish a fund, rising to £800,000 by 2012/13, to source local video news from external providers on a commercial basis.

We are not attracted by this fund, which we see as a blatant, albeit misguided, bribe to try to win support from commercial publishers for the Local Video proposals.

Northcliffe is not a news agency and has no intention of becoming one. We know that our content is lifted on a daily basis by other news organisations, including the BBC, local and regional news agencies, wire services and national newspapers. We try to protect our content but we see no significant business benefit from trying to sell it. Establishing arrangements to do so would, we believe, only distract us from our core objectives of being “at the heart of all things local”, creating compelling local content, using that content to develop significant and engaged audiences, and delivering response to advertisers who wish to reach these audiences.

The figure quoted for the fund is also negligible in terms of our business. Even if Northcliffe were to receive a quarter of the total sum available for purchasing video content - i.e. £200,000 - that would be just 0.05% of our total revenues in 2006/7. This insignificant revenue stream would in way compensate for the loss in advertising revenues which would result from the BBC’s erosion of our audiences.

The BBC is proposing to link from its sites to the homepages of other local content providers and also directly to individual stories.

At present links from BBC sites have negligible impact in driving traffic to our thisis sites.

We examined referrals to four of the major thisis sites in May 2008. You will see below that, of almost 7.5 million visits to these sites in that month, only 127,000 (1.7%) were from BBC sources (SOURCE: Intellitracker Web Analytics), despite the BBC being the fifth most used UK Internet service in the UK. SOURCE: PR Newsire – comScore release top UK web rankings for January 2008

www.prnewswire.co.uk/cgH i/news/release?id=220840

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Referrers to NM network of websites from BBC sources

BBC Total Visits referrals % Bristol 195747 3511 1.79% Hull 282639 3623 1.28% Leicester 221560 3754 1.69% Gloucestershire 181498 4081 2.25% TOTAL 881444 14969 1.70%

Total ‘thisis’ network visits for May 08 = 7,481,581

Approx. 1.7% of all visits referred to ‘this is ‘ from BBC sources = 127, 187

Source : Intellitracker Web Analytics, ‘this is’ May 2008

This demonstrates that linkage from BBC sites is not effective in driving traffic to regional commercial media sites. Therefore, there is no basis to suggest that the enhanced BBC local sites would stimulate use of local commercial media. In fact, they would simply displace usage of commercial sites, thereby distorting the market for local news, information and advertising services.

We note that, in the BBC Management’s document assessing the public value of the Local Video proposals, there is a Key Performance Indicator that the service should “help double the number of click-throughs to third party sites by 2012/13”. If this target is achieved five years from now it would still, proportionally, only deliver 3.5% of visits to our thisis sites. This would not compensate in any meaningful way for the erosion and dilution of usage of our websites as a result of greater usage by consumers of the BBC’s local sites.

27. Local Video research

We have already referred in this submission to our concern that the consultation timescale has precluded Northcliffe or other interested parties from conducting or commissioning relevant research. This clearly places us at a disadvantage against BBC Management who have produced research in support of the Local Video service application.

We are dubious about the research conducted by BRMB Media, on behalf of BBC Management. Our key point is that it is vital to bear in mind that there is often a significant difference between what people say they will do and their actual behaviour.

This disconnect is demonstrated by Table 1 on page 23 of the BRMB document which shows an increase in use of other local media services, other than ITV regional news, if the Local Video service was launched. Free local newspapers, BBC regional TV news and local websites all show a jump of more than 10% in usage.

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This contradicts all trends for actual usage of media when a significant new or additional service enters the market. It is stretching credibility to claim that there will be such a significant growth in media consumption almost across the board.

It should be said that the findings above are contradicted somewhat by between a tenth and a fifth of adults saying they would use some local media less if the BBC local service was launched.

We are not surprised that a significant number (68%) indicated they would use the new BBC service. It is also notable that almost nine in 10 adults (88%) currently use a local commercial media source to obtain the sort of information that would be given by the proposed BBC service. It is clear that Local Video would be likely to command an audience of significant size from people who are currently using commercial sources of local news.

This supports our conviction that Local Video will increase the BBC’s local audience significantly, at the expense of commercial operators such as Northcliffe.

28. Market impact of Local Video

We have made our view abundantly clear that the Local Video would have a substantially negative impact on commercial operators, including publishers of local and regional newspapers and their websites.

We believe the claims made in the supporting documentation for Local Video of a positive impact on the overall market for local news provision are spurious and strain credibility to breaking point.

Specifically, we reject the statement that Local Video could have a beneficial effect by “familiarising users with on-demand local news content and formats and by encouraging demand and usage of such services”. It is clear that awareness and usage is already growing rapidly and certainly does not require stimulation from further publicly-funded intervention. For example, in June 2008 Northcliffe’s this is websites reached 3m unique visitors, an increase of 48% on June 2007 – the market for digital local news is growing rapidly, driven naturally by consumer demand.

Local Video would benefit enormously from the huge audience of 5m weekly unique UK users (according to figures disclosed in the BBC Trust review of bbc.co.uk) already commanded by the BBC Local websites, plus promotion on BBC local radio and regional television. For this reason alone, we believe it is far too conservative to estimate the weekly reach by 2013/14 to be 11% of UK households (3.2 million in total). Even the BBC’s supporting documentation says this is a “reasonably modest target”.

In fact, we believe it is absurd to estimate that, in five years, the Local Video service would reach approximately the same number of people as reached currently by BBC local websites. Local Video is not a discrete proposition. It is effectively a major expansion of content on the BBC’s local websites. We believe it is inevitable that this would drive significant growth in usage of these sites, at the expense of commercial providers.

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We agree with the view taken on the basis for assessing market impact in the document “An Independent Preliminary Assessment of the Market Impact of the BBC’s Local Video Proposals”, produced by Human Capital on behalf of BBC Management. This acknowledges that convergence has eroded former boundaries between different forms of media and, therefore, impact should be considered from a much wider perspective. We agree that “consumers and advertisers are becoming increasingly flexible in their use of different media”.

However, we take issue with several other assertions in this document.

It claims that the BBC’s proposals will have a “relatively small effect (on local newspapers’ online activities) compared with other market forces already in play”, referring to direct competitors for local newspaper revenues.

We acknowledge that our industry faces more competition than ever before and accept that this scenario reflects changes in consumer habits, technology and access to audiences. The market for local news, information and advertising has transformed and it has many new entrants. As always, we are content to meet the many and rapidly-changing challenges of the free market.

However, the challenge from the BBC is very different in that it:

• Is publicly funded and therefore immune from normal commercial requirements and pressures; • Targets our core competency – the provision of credible and relevant local news and information; • Augments substantially an already powerful position in local and regional media. • And benefits enormously from cross-promotion from the world’s most powerful media brand which has established market leadership in the UK across television, radio and the Internet.

Predictably, the Human Capital document on the market impact of Local Video underplays the impact upon regional publishers, who are the most vociferous opponents of the BBC’s proposals.

The document also suggests the video news from the BBC may be a unique offering because the rollout of such services by local newspapers is described as “patchy”. This is a false claim. Northcliffe believes regional publishers are either already providing video news at an equivalent level of granularity to the BBC (i.e. 60 services across the UK, serving major cities or counties) or will do so in the very near future.

Some small weekly newspapers with very small editorial staffs may not be able to provide video in addition to their text and photographic content in print and online, but neither will the BBC in these small communities.

However, it must be stated that Northcliffe intends to make video news provision part of its content offering in all publishing centres by October 2009. This would mean that Northcliffe will have video journalists providing audio-visual content regularly in locations such as

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Barnstaple, Devon; Retford, Nottinghamshire; and Tamworth, Staffordshire – in addition to that provided in our major centres, which range geographically from Hull to Plymouth.

How can the BBC claim distinctiveness against this level of commitment to quality video journalism?

Across the Northcliffe estate every community we serve will receive a truly local and relevant service of video news, in addition to our unrivalled print and online coverage. Any service from the BBC will merely replicate – or, indeed, substitute – these services, at public expense.

The positive impacts of Local Video suggested in the Human Capital document are flimsy and spurious. They are listed as follows, with our responses below:

Encouraging all audience groups to access and value local news.

Local or regional newspapers are read by 83.9% of all British adults, far more than readers of national newspapers (65% of all adults). Since 2000 total readership has increased by 1,541,000 readers. Readership of weekly paid-for titles alone has grown by 14.3% since 1994. SOURCE: GB TGI Q3 (April 2006-March 2007) as quoted by the Newspaper Society

www.newspapersoc.org.uk/Default.aspx?page=897H

This impressive reach is enhanced further by the hundreds of websites which extend the audience for local news and information. As explained earlier in this submission, local and regional newspapers and their websites have an audience profile reflecting the UK population and UK internet users respectively. Furthermore, local and regional newspapers are the most trusted media. There is therefore no need for public money to be used to increase access to, or the value placed upon, local news.

In certain regions with limited providers of local news, providing an important extra element of choice for consumers and plurality of views for consumers.

There is already substantial choice and plurality in local news provision. As demonstrated in this document, regional media is more diverse in its content and means of delivery of that content than ever before. Furthermore, the BBC already has a significant local presence; ITV Local are striving to focus more on local content and audiences; and commercial radio companies continue to supplement their core entertainment offering with local news and information.

Moreover, a growing number of community organisations, commercial start-ups and citizen journalists are exploiting the power of the Internet and the low (or even zero) cost of entry into online publishing to provide community content, including news, and to establish forums for debate and information sharing. Regional commercial media companies such as Northcliffe welcome this entrepreneurial activity which reinforces vibrant community spirit and promotes diversity.

There is no need or justification for public funds to be spent adding further to this choice or diversity, nor any substantial evidence of demand for additional local services from the BBC.

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Encouraging adoption of broadband (though this impact will be small).

The BBC admits the stimulus for adoption of broadband from Local Video will be small. We suggest it will be non-existent. According to Ofcom 57% of UK homes had access to broadband in the final quarter of 2007, up from 35% in 2005 and only 7% in 2002. It is clear that activities such as online shopping, internet banking and entertainment services have stimulated this growth, which is likely to continue. The BBC’s plans will not play a part in this. SOURCE: Fears of digital divide groundless as online access soars in rural areas.

http://www.guardian.co.uk/technology/2008/may/22/internet.digitalmediaH

Supporting skills development for local video services.

This benefit will be minimal, limited to the proposed role of a Community Producer in each locality facilitating the production of a limited number of video packages by community organisations.

Nurturing local production talent.

As above.

In some regions acting as a spur to the rest of the market to innovate and invest (though note that currently a number of newspapers lead the BBC in provision of online local video news).

Regional media publishers are indeed leading the BBC in the provision of online local video news. The commercial sector has not needed to be spurred by the BBC to invest in video and other multi-media services. Innovation is thriving across the regional media sector. There is no evidence that publicly-funded intervention is required to stimulate innovation in local news provision.

Training in skills, in particular video journalism, which could be of wider industry benefit.

There are several credible providers of high-quality video journalism training that have been used by Northcliffe editorial teams. Prominent among these is Press Association Training, which runs a respected video journalism diploma. Other providers used by Northcliffe centres include ITN Consulting. SOURCES: Press Association Training – First video challenge for journalism trainees

www.pa-training.co.uk/video_trainees.htmlH ITN Consulting

http://itn.co.uk/news/a1cc085f865ba744f813a7ab7e68402f.htmlH

Furthermore, several colleges and universities which are affiliated to the National Council for the Training of Journalists (NCTJ) now include video training among their multi-media modules, ensuring that many new entrants into the industry come ready equipped with video journalism skills. SOURCE: NCTJ – online module to be integrated in exams

www.nctj.com/latestnews.php?news_id=news_id&newsid=141H

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There is therefore no shortage of video training providers or any video journalism skills gap for the BBC to address.

Turning back to the wider issues of market impact, we have demonstrated the inextricable link between editorial content and commercial content/revenues. It is therefore disappointing that, in its assessment of market impact, Human Capital has followed the BBC line in drawing a false distinction between them.

We believe some of the data presented in the market assessment document is irrelevant. For instance, given the short duration of the Local TV trial in the West Midlands (just nine months) it is not surprising that there was no immediate and obvious impact on local newspaper circulations in the trial region.

Human Capital suggest that, despite the proposed BBC service, the market might grow to exceed the current regional newspaper advertising market, as business transfers from print to online. This fails to factor in that online advertising is generally at a much lower yield than in print and demonstrates a fundamental lack of understanding of these issues.

Confusingly, the document also suggests that local media groups may have to focus on local news as their key unique selling point when facing greater competition. However, in the event of approval for the BBC’s plans, competition would intensify for that USP. Indeed it would no longer be a USP if the BBC were permitted to develop such extensive local services.

However, while the Human Capital document plays down the market impact of Local Video it does acknowledge that the services “could have an impact on the revenues and profitability of some of those organisations who might seek to provide local video news as part of a wider local proposition”. It further notes that the BBC’s proposals “could affect usage and hence revenues of newspapers’ new online sites”. These statements echo the views expressed in this document.

Human Capital further acknowledge concerns over the Local Video services being part of an extended “multi-faceted BBC local online proposition, adding local news and news-related video to the BBC Local content mix”. This is exactly what is in prospect. The new services will not be discrete – they will augment and add value to already extensive BBC local provision. Indeed, the £23m annual cost of Local Video relates only to the new services, but these will benefit hugely from cross-subsidisation from the BBC’s massive spend on its multiple platforms, primarily £100m on Nations and Regions services and £110m on bbc.co.uk.

It is relevant to note that, during our consultation meeting, Bronwen Roscoe of the BBC Trust acknowledged Local Video was “not a discrete offering”.

This point is further emphasised by the fact that local video news would be embedded in BBC Local sites, which already enjoy 5m weekly unique users (as quoted in the BBC Trust review of bbc.co.uk). Human Capital note that “embedding will give the video content immediate, substantial exposure, building BBC awareness and habits of usage amongst an audience that are self-selected to be particularly interested in local news. This may make it

202 harder for later entrants to establish a market position”. We argue that existing providers of local news, such as Northcliffe, would be similarly disadvantaged.

We disagree with much of Human Capital’s “counter-factual” analysis of what could happen to the market in the absence of the BBC’s proposed services. In particular, we do not accept that there is any evidence to support suggestions of a reduced demand for relevant and credible news, such as we provide. Life is local content is more relevant than ever before, as the evidence given in this submission proves.

However, we support Human Capital’s summary on the prospects for local newspaper groups, which states:

“Developing new broadband services is seen as a key strategic priority and it is almost certain that local newspaper groups will continue to enhance their online propositions, using more audiovisual content to complement the wide range of local information services that they are already providing. Even without the BBC, therefore, we are likely to see a rapidly growing provision of local news broadband sites, linked to local newspaper brands”.

It also notes that:

“There is an opportunity for ‘many flowers to bloom’, with the provision of local news as part of a broader multi-media proposition, delivered by the large local newspaper groups, new commercial entrants, or not-for-profit entities.”

The picture that is painted is one of flourishing and diverse local media provision, free of the artificial brake on commercial growth that would be applied by the enhancement of local BBC services.

It is a picture that is attractive to commercial media operators and, we believe, to the communities we serve.

Finally, it is bizarre for Human Capital to note that the 20 largest groups now account for 88.3% of local and regional newspapers and then make the case for the further intervention into the local market by the BBC, a monolithic organisation which is rapidly establishing itself as the dominant source of news across the media landscape – effectively a monopoly provider across multiple media.

29. The BBC’s Public Purposes

In producing this document we believe we have answered the specific questions listed in the BBC’s online consultation questionnaire, as well as providing a substantial amount of other relevant information.

We would also like to touch upon the BBC’s Public Purposes and how they relate to the Local Video proposals. The Public Purposes are:

• Sustaining citizenship and civil society. • Promoting education and learning. • Stimulating creativity and cultural excellence.

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• Representing the UK, its nations, regions and communities. • Bringing the UK to the world and the world to the UK. • In promoting its other purposes, helping to deliver to the public the benefit of emerging communications technologies and services and, in addition, taking a leading role in the switchover to digital television.

We do not believe the Local Video proposition will contribute in any meaningful way to these purposes, largely because it will merely replicate – or indeed substitute – services already being providing at no public cost by the commercial sector.

There is no evidence that Local Video will sustain citizenship and civil society, promote education and learning or stimulate creativity and cultural excellence in any significant way and no substantiation that these purposes will be promoted in any materially different way from existing provision. It should be noted once again that digital provision of local news and information, particularly in video format, is expanding rapidly.

The BBC already represents the UK, its nations, regions and communities and can continue to develop its relevance through existing services. It should not be permitted to extend its local reach and impact at the expense of commercial providers.

Video news services have developed strongly, driven by commercial media and by the growth of video sharing websites such as Youtube. Local and regional news in video format is now provided routinely by regional media companies such as Northcliffe. There is no need or justification for the BBC using public funds to stimulate the development of such services.

As we have demonstrated in this document, the Local Video proposals would distort significantly the market for provision of local news and information. This would have a detrimental effect on local communities and stifle the development of local news and other content by commercial and community-based providers. The BBC’s proposed massive intervention into the market would inhibit rather than encourage plurality and diversity in local media.

Local Video proposals will not promote the BBC’s Public Purposes. Indeed, we believe that, by proposing to spend millions of pounds of public funds destabilising the role and viability of regional commercial media providers, the BBC is abusing its power and undermining its public service credentials.

30. Conclusions

This document provides compelling evidence that regional media is vibrant and more innovative and diverse than ever before in the services it offers to consumers and advertisers. It refers specifically to Northcliffe, but all the regional publishers have embraced the opportunities of multi-media with enthusiasm and an entrepreneurial spirit, despite challenging conditions in our industry and the debilitating effects of the economic downturn.

We are making rapid progress to become truly integrated multi-media publishers. We are forming a new relationship with local people and communities, founded upon a two-way dialogue, collaboration and participation. Of course we still gather and edit content, but we

204 also empower the public to publish, and to connect with and contribute to their community directly.

Our heritage is in newspapers. They remain at the heart of our businesses – and we believe they will continue to do so – but print is now only a part of our ever-expanding multi-platform portfolios.

We are serving the community as we always have, but in new exciting and innovative ways – via computer screens and mobile phones as well as ink on paper.

The BBC Local Video plans would be a massive enhancement of the BBC’s local content and capability. If they are allowed to become reality, we believe the BBC would seize a significant proportion of online audience and traffic from commercial operators and constrain the aspirations of Northcliffe and other publishers to develop new digital platforms and revenues, to the detriment of these businesses and the local communities they serve.

The BBC has immense power to undermine commercial media ventures. It has become clear over time that, when the BBC colonises a media sector – as it intends to do through the Local Video plans – this results in a serious weakening of commercial operators. ITV and the commercial radio groups have suffered in this way as the BBC has commanded a larger market share at their expense.

Through Local Video the BBC would be using its enormous public funding, unrivalled resources, powerful brand, cross-promotional capability and technical expertise to make a “land grab” of local content and audience. As a result, it would deny regional commercial media groups the opportunity to continue the process of reinvention in order to establish a prosperous and sustainable future as multi-media publishers.

Regional media is already providing comprehensive news and information services online, including video content. Northcliffe and other regional publishers are introducing new digital services all the time. Why, therefore, should the BBC be permitted use millions of pounds of taxpayers’ money to replicate services already provided or being developed by commercial operators at no cost to the public purse?

This submission demonstrates conclusively that the BBC’s proposed expanded local sites and content will not be distinctive. The public’s appetite for local news and information through digital channels is being met by regional publishers such as Northcliffe. There is no demand that is not being fulfilled.

If permitted to proceed, the BBC’s proposals would amount to unfair competition, funded by the taxpayer, which will distort seriously the provision of local news and information.

The BBC is already the leading – arguably the dominant – UK national media player on television, radio and on the Internet. SOURCE: Brand Republic – BBC dominates TV, radio and web in new Touchpoints report

www.brandrepublic.com/Discipline/Advertising/News/829109/BBC-dominates-TV-radio-web-H new-Touchpoints-report/

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The Local Video proposal is likely to extend that market leadership into the provision of local news and information, to the detriment of long established publishers at the heart of local communities who are meeting the challenges of the multi-media age despite struggling to carve out commercial models for new communication channels.

Our business depends on achieving sizeable and engaged audiences for commercial viability. An enhanced position for the BBC would restrict our growth potential, in terms of audiences and revenues. It would inhibit the development of new, potentially commercially viable services and also close off channels to market for local businesses.

Northcliffe Media and the regional media industry as a whole are deeply concerned by these proposals. We urge the BBC Trust to give the fullest consideration to the market impact upon commercial media providers and the communities we serve of allowing the BBC to extend massively its services, content and audience in local and regional marketplaces.

The impact over a five-year timescale is impossible to quantify with certainty, but, given the enormous power and resources of the BBC, it is certain that the impact will be significantly negative on commercial news and information providers.

This document provides substantial and robust evidence of how Northcliffe has a compelling business need to develop services and audiences in the digital space in order to remain prosperous and sustainable in a rapidly-changing media landscape. To do this we must be allowed the freedom to trial and invest in digital content and platforms on an even playing field against a plethora of commercial and not-for-profit providers in this era of media fragmentation, convergence and user generated content, free from publicly-funded intervention and disruption.

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Further encroachment into our local marketplaces by the BBC – the world’s most powerful and generously funded media player – would inevitably erode our current audiences, constrain significantly our ability to reach new consumers, undermine our development aspirations, and harm our revenues. All this at a time when regional publishers are weathering the storms caused by significant changes in media usage and a profound economic downturn.

The BBC has acknowledged that no new BBC service, or significant change to an existing service, should be allowed unless the public value outweighs any negative impact on the marketplace. SOURCE: BBC response to A strong BBC, independent of Government, Royal Charter Review

www.bbc.co.uk/info/policies/pdf/green_paper_response.pdfH

This document demonstrates that there is no significant public value in the Local Video service – it is not distinctive, it does not meet an unfilled market need and it will not produce greater plurality and diversity of provision of news and other content. It will, however, have a substantially negative impact on commercial operators, local communities and the diversity and independence of media which is a cornerstone of our freedoms and way of life in the UK.

The BBC Trust must recognise the overwhelming evidence that the BBC’s Local Video plans would seriously distort the market for local news and information provision and damage commercial operators significantly. By doing so, the Trust will demonstrate its independent from BBC Management and its commitment to ensuring the BBC’s services and development are consistent with the public interest.

There is no compelling case for the BBC to spend millions of pounds of public funds replicating or substituting commercial services. All the evidence points to Ofcom finding that the market impact of these proposals would be so negative that they must be recommended for rejection and to the BBC Trust supporting this conclusion.

We respectfully urge the Trust to conclude that the BBC Management’s proposals are not in the public interest, nor in the interests of a diverse, pluralistic, commercially viable and sustainable local and regional media sector.

Michael Pelosi, Managing Director, Northcliffe Media Ltd

July 29th 2008

207 MOLD BUSINESS PARK. WREXHAM ROAD. . MOLD.FLiNTSHIRE, CH7 IXY Tel:0 1352 707707 nwnmedia Fax: 0 1352707790 Web: www.nwnmedia.co.uk

NWNjRWjAMR

13 August 2008

Ms B. Roscoe BBC Trust Unit Room 211 35 Marylebone High Street London W1U4M

Dear Ms Roscoe,

I am writing to you as Chairman of NWN Media Ltd (formerly North Wales Newspapers Ltd) with daily and weekly titles covering north and mid Wales, Chester and the borders. This year as a company we celebrate 160 years in business serving our local communities. We own and publish the oldest newspaper in Wales - the North Wales Chronicle - 200 years old this year, as well as the Evening Leader covering Wrexham, Chester and Deeside.

In April this year HRH the Prince of Wales opened our new fl5m press centre on Deeside representing one of the largest single investments in Wales, and now one of only two remaining newspaper presses in the Principality.

We continue to invest heavily in print, and in print journalism and we have recently established a partnership with our local university to enhance the ongoing training of our journalists in both print and online.

Each of our titles has its own local website. Each is capable of video and we provide each community with access to local news, information and advertising through each of our newspapers and online web sites. The combination of the two is crucial to ensure the ongoing commercial success of the business, our ability to hold onto our audience in print and online - (upon which our ability to sell advertising depends) - and continue our investment in local journalism, local jobs and maintenance of impartial and balanced local news.

I am particularly concerned about the commercial implications of proposals by the BBC to launch local websites and local video. We have written to local MPs and Assembly Members as follows:

Lembit Opik MP (Montgomeryshire) Andrew Miller MP (Ellesmere Port and Neston) Christine Russell MP (Chester) Owen Paterson MP (North Shropshire) Betty Williams MP and Chris Ruane MP (N Wales coastal) David Jones AM Ian Lucas MP (Wrexham) Martyn Jones MP (South C1wyd) Eleanor Burnham AM N Wales

EVENING LEADER . WREXHAMLEADER . FLiNTSHIRE STANDARD . CHESTER& DISTRICT STANDARD ELLESMERE PORT STANDARD . COUNTYTIMES EXPRESS & GAZETIE • OSWESTRY & BORDER COUNTIESADVERTIZER DENBIGHSHIRE FREE PRESS . RHYL JOURNAL . NORTH WALES PIONEER . NORTH WALES CHRONICLE . TRIBUNE NORTH WALES LIVING . MID WALES LIVING

Head Office: NWN MEDIA LTD . MOLD BUSINESS PARK. WREXHAM ROAD . MOLD . FLiNTSHIRE . CH7 I XY (Registration No. 167825 England) (MPs and Assembly Members, continued...)

Karen Sinclair AM Clwyd South Janet Ryder Plaid N Wales Carl Sargeant Labour Alyn and Deeside Sandy Mewies Labour Delyn Lesley Griffiths Labour Wrexham

Each has sympathised with our concerns. Some have written to ministers concerned.

Primarily we believe state funding of direct competition from the SSC for local newspapers and their websites is unnecessary and unfair and will pose a direct threat to the ongoing viability of local newspapers and their ability to attract new local audiences.

Many of the smaller independent existing local providers of news in particular will find their online development subsumed beneath the weight of the SSC brand, SSC funding and the ability of the SSC to cross promote through its vast range of 1V, Radio and other offerings.

Guaranteed licence fee funding removes much or all of the risk for the SSC of venturing into new local services and technology. On this basis we are unable to compete on any fair or proper level as an existing provider.

I note that in the SSC Management's assessment of the Public Value of its local video proposal (at P61 under the SSe's role in Local Markets "Relationships with third parties'') as an example "SSC Wales placed a producer in the County Times local newspaper office in Newtown for a month and advertised a weekly open day where local people were encouraged to bring in their stories; the resulting stories were shared between SSC Wales's services and the newspaper". This in fact relates to a four page advertisement supplement the SSC paid for and ran with one of our newspapers - The County Times - in summer 2007 as part of a road show and fell a fair way short of the description "partnership" in the context of the SSe's plans now unveiled.

Local Newspapers survive in a highly competitive marketplace with very few of our own areas having less than two or possibly three local print alternatives, together with competitive local websites. In addition local radio, posters and cinema will all compete for local advertising while larger generic websites such as Monster, Auto Trader and Prime location and others will be competing for online revenues and attacking our marketplace. Clearly we face heavy local commercial competition but as an industry but we have had the resilience, drive and flexibility to survive, grow and flourish in this competitive environment because our local audiences have confidence and trust in our products online and in print.

Where there is a level playing field of commercial competition we can respond. The SSC proposal represents a threat beyond any level playing field.

As a business we have had associated websites for all of our newspapers and these have evolved and grown over many years in a competitive environment. This year our web site unique users have grown across the Group by approaching 20% and we have seen a consistent growth in online revenue since that time while print revenue has been under pressure as a reflection of wider industry performance. We face one of the severest downturns in the local newspaper industry that I have experienced in my 30 years involvement - particularly from traditional local and national retail advertisers, recruitment, motors and property. Online is one of the few areas offering potential for commercial growth. The introduction by the SSC and anti competitive state funding of local websites will threaten to choke off any growth potential we may have commercially in this key local area.

We would therefore urge you not to support proposals of the SSC to launch local web sites.

Yours sincerely,

Russell Whitehair Chairman NWN Media Ltd. Response to PVA for BBC proposal for local video

August 2008 BBC Local Video 2

Introduction

1) Pact is the trade association that represents the commercial interests of the independent production sector. We have more than 600 member companies across the UK, working in television, film and interactive content.

2) Independent production companies account for around 50% of all new UK programmes on television screens each year. Overall turnover is more than £2 billion,1 while the independent sector employs 20,950 people – more than the terrestrial broadcasting and cable and satellite sectors respectively.2

3) Independent production companies are responsible for some of the most popular and commercially-successful shows on television today, as well as being amongst the market leaders in so-called public service genres, such as current affairs, drama, and factual. Pact members are also involved in interactive and online content that is related to television programming, and new media content that is wholly independent of broadcasting. Some work primarily in television but also create content that is wholly for online, while others specialise in stand-alone new media content creation.

4) The creative competition provided by the independent sector helps drive quality, diversity and innovation in UK content, and helps ensure that UK audiences benefit from some of the best content in the world. The hundreds of companies in the independent sector compete with each other, broadcasters’ in-house production departments, and overseas companies to win commissions. In so doing, they stimulate competition across the content creation sector, as well as act a valuable benchmark for costs.

1Independent Production Census 2007/08, Digital-I for Pact. 2 Employment Census 2006, Skillset.

Pact BBC Local Video 3

Response to Public Value Assessment of local video services

1) Pact sees potential for a local video service to help fulfil the BBC Charter, particularly in terms of fostering citizen and community engagement, representing the nations and regions, and stimulating the creative economy outside London.

2) However, we are unable to support the current proposal due to several concerns. These include:

• The potential impact on the BBC’s representation of the nations and regions on its broadcast services; and

• The proposal’s overwhelming bias towards in-house production departments, which contradicts its ambitions to be inclusive and stimulate the wider economy; and

• The potential impact on other businesses in the commercial sector. Our members are already creating content for local services in the nations and regions and we are concerned that there may be a risk of this source of investment for the content supply sector being undermined.

Impact on out of London commissioning

3) We understand from the BBC management’s assessment of the proposals that the annual cost of the service would come from “reinvesting

Pact BBC Local Video 4

efficiencies and savings” from the BBC’s nations and regions budgets.3 Of course the BBC should be subject to appropriate efficiencies, but the proposed service should not be to the detriment of the BBC’s representation of the devolved nations and regions on television, particularly at network level. As the Trust is aware, this is a core area of public service broadcasting (PSB), and one that is already under threat across the PSB broadcasters in general.

4) Our recent submission to the Trust for its Network Supply Review detailed how the BBC is failing in this regard.4 As we outlined, Pact’s Production Trend Report for Out of London, conducted by Attentional, indicated that BBC1 and BBC2 commission around three quarters of UK first-run network programming from London (hours and spend). This means that BBC1 and BBC2 are sourcing a lower proportion of programmes from outside London than the commercially-funded public service channels.5

5) Local video has the potential to augment the BBC’s overall nations and regions service, but it is a very different offering to network-level provision. Firstly, local video’s reach is relatively limited compared to nations and regions provision on television.6 Secondly, local video does not represent the UK’s nations and regions to the rest of the country. BBC management’s assessment of the service focuses on a narrow definition of the BBC’s public purpose of representing the UK, i.e. “to provide news and information that meets the needs of local communities across the UK.”7 The Government’s White Paper on the BBC during the Charter

3 BBC Management’s assessment of the public value of its local video proposals, BBC, page 9, 1.6. 4 Response to BBC Network Supply Review, Pact, February 2008 5 The full report, including methodology, is available from Pact, and we note that the figures are based on best available data and should be taken as guideline only. 6 The BBC estimates a weekly reach of 11% of UK households by 2013/14: see BBC Management’s assessment of the public value of its local video proposals, page 6, 1.3. 7 BBC Management’s assessment of the public value of its local video proposals, BBC, page 5, 1.2.

Pact BBC Local Video 5

review process defined this purpose far more broadly, encompassing local, regional and national-level services. The BBC, it confirmed, should: “Provide network programming that reflects, in a balanced and accurate way, the activities and cultures of the diverse range of communities within the UK.”8

6) Moreover, in terms of the BBC’s public purpose of fostering creativity, network commissions are larger scale, and therefore better suited to enabling external suppliers in the nations and regions to develop their businesses in a strategic way. This is a valuable part of the BBC’s public purpose, as defined by the Government’s White Paper, of “stimulating creativity and cultural excellence by using the licence fee as venture capital for creativity.”9

7) We would therefore be very concerned if this proposal were to boost local provision only at the expense of nations and regions representation at other levels. We would welcome clarification of which part of the BBC’s nations and regions budget would be affected by the proposal.

Bias towards in-house production

8) Our second key concern is that BBC management’s proposals have an overwhelming bias towards in-house production departments. Under the current proposals for local video, the BBC envisages spending just 5% of total annual local content creation costs for video news on external sources – and even this level will only be reached over time.10 This is well below the 25% minimum quota applied to external and/or independent content for other BBC services, for both online and television. At a time when the BBC is successfully putting increased emphasis on external

8 A Public Service for All: the BBC in the digital age, page 18. 9 Ibid, page 3. 10 BBC Management’s assessment of the public value of its local video proposals, page 10.

Pact BBC Local Video 6

suppliers under the Window of Creative Competition (WOCC) in order to deliver a range of benefits, the proposed 5% target for local video services represents a backward step.

9) Such a step would undermine the potential of the BBC’s local video service to help the corporation fulfil its public purposes of fostering community, representing the nations and regions and building the wider creative industries. To best achieve these purposes, the BBC must allow a wide range of voices to be represented in its content, drawing on ideas from external sources as well as BBC in-house. In so doing, the BBC will:

• Open up new ways of engaging local communities, providing members of the public with multiple access routes to the service – with some communities, for example, independent companies have better links, and even higher profiles, than broadcasters. • Enhance representation of the diversity of the nations and regions by offering a genuine range of viewpoints, not just those from in- house. • Stimulate creative competition and innovation by having a rich mix of would-be suppliers. • Stimulate the external supply sector outside London by providing a source of investment, particularly for small companies and start- ups. • Manage costs by opening the BBC’s doors to cost-efficient external programming that can also provide a benchmark for in-house production.

10) These are well-established and widely-made arguments, laid out in independent reports ranging from the Graf review of BBC online services, to the more recent PKF report on the BBC for the last Charter review

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process. The creative benefits of competition were at the heart of the Graf report, which stated that:

"A higher level of contribution from external suppliers will promote the diversity, plurality and quality of content offered by BBC Online, and will help drive innovation and creativity, much as it has done in the TV sector."11

11) PKF’s report for the Department for Culture, Media and Sport as part of the BBC Charter review process focused on the potential cost benefits of commissioning from independents under the Window of Creative Competition (WOCC). PKF stated that prices at other broadcasters indicated that independents could produce programming at relatively low costs:

"What is clear is that the BBC does not have consistently higher or lower costs than all other broadcasters. It also cannot be said that independent producers are consistently more/less expensive than in-house production. However, what the data for broadcasters B and C suggest is that it may be possible to commission relatively low cost independently produced programmes for most genres."12

12) PKF also noted the potential for increased competition to drive down costs at in-house production departments. The report stated that there was a possibility that: "the real competition created by the WOCC will bear down on in-house costs."13

11 Report of the independent review of BBC Online, Philip Graf for DCMS, page 77. 12 Review of the BBC Value for Money and Efficiency Programmes, PKF for DCMS, April 2006, page 76 13 Ibid, page 20.

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13) Additionally, investment by the BBC in external content creation companies can act as a powerful catalyst for growth in creative economies outside London. It is also worth noting the exponential effect of using the licence fee as creative capital in this way. The BBC’s investment in programming gives external suppliers the opportunity to further develop skills and experience that helps them win commissions from other broadcasters.

14) The fact that the proposal for local video contains a high level of news, a genre which has historically been exempted from the definition of qualifying independent programming, does not alter our view that the service should offer a substantially increased level of opportunities for external suppliers. Independents have shown they can produce acclaimed current affairs programming, such as Question Time and Dispatches, when given the opportunity. The case for excluding news from qualifying independent hours has centred on issues of trust and compliance, and whether independents have sufficient scale to deliver. In the wake of recent failures across the entire industry, compliance systems have rightly been overhauled for all producers, in-house and external, and have never been more rigorous. In addition, the question of whether independents have the scale to deliver would seem less valid, given the recent growth of the sector.

15) Enabling a greater range of companies to compete for news in this way has particular benefits in the context of nations and regions. Independent production companies, with lower margins than broadcasters, are well placed to develop local news services, while the resulting investment in those companies stimulates growth in the external out of London supply sector.

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16) In our recent submission to Phase 1 of Ofcom’s PSB Review, we therefore called for independent companies to be allowed to compete for news commissions at network and non-network level. This could be achieved by amending the definition of qualifying independent programmes under the Broadcasting (Independent Productions) Order 1991, and subsequent amendments.

17) In our view, therefore, two approaches to opening up commissioning for external suppliers should be considered. First, we propose that external suppliers should be able to compete for at least 25% of all content creation spend, and that this should be in place from launch. On top of this 25%, the BBC should ring-fence a further 25% that will be open to competition from in-house and external suppliers - in line with the WOCC. Again, this should be effective from day one.

18) This external spending should be on content, rather than going on outsourcing purely technical or operational work (we are concerned that spending in non-content areas such as chat-room moderation is counted under the external quota for bbc.co.uk). The Graf report called repeatedly and clearly for a 25% external quota for commissioning content – not services. The primary reason behind Graf’s call for a quota for external content was stimulating the creative competition that can deliver more innovative, more imaginative and more varied ideas for the licence fee payer.

19) The rationale behind the BBC Governors’ subsequent inclusion of services under the quota was that the online sector was relatively young. Whether or not this view was correct at the time, the online sector has expanded dramatically in the intervening years. This growth is exemplified by the successful contribution by external content suppliers in the learning genre to BBC Jam, which commissioned 50% of content from external sources.

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Content created by external suppliers was amongst the most innovative and engaging learning materials made for BBC Jam. Highlighting the capacity of the external supply sector, BBC Jam’s estimated annual spend on external content was £15m – comparable to our estimates of the entire proposed annual spend on content by the BBC’s local video services on in-house and external content.

20) In addition, we would expect a substantial proportion of external content for the BBC’s local video services would come from television companies in the nations and regions, opening up a significant further source of content.

21) Our second proposal regarding opening up commissioning to external suppliers is that the Trust might consider whether some of the local video services should be “franchised” out to external suppliers, on a competitive tender basis. This would have the effect of offering those suppliers a longer term contract which would help them develop their businesses. If commissions or contracts are offered over a length of time rather than as one-offs, this better allows companies to plan investment in their businesses and the local infrastructure on a strategic basis. Local companies can, for example, build departments, invest in developing skills, and attract outside investment if they are able to plan ahead with a degree of security.

Impact on commercial sector rivals

22) Pact members in the nations and regions are already creating online content for local news and community sites in the commercial sector, and we are concerned that the BBC’s proposals risk undermining such services. These services are a source of investment for independent content creation companies in the nations and regions, and any scaling

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back in the level of funds for content creation that they are able to offer would be likely to impact on the out of London supply sector.

23) We would therefore ask the Trust to bear in mind the conclusions of the Graf report, which stated that it was often not possible to clearly establish whether the BBC’s online services were adversely affecting competition but that: “There are indications, however, that BBC Online may have an adverse impact on competition. In particular, BBC Online might lessen competition, by deterring investment by commercial operators that could have led to new forms of competition.”14

24) The Graf report therefore advised a precautionary approach: “In practical terms, a precautionary approach means that, if the view of the relevant decision-maker is that there is a “close call” between the public service benefits of a proposed BBC Online service and the costs of that service, including potential adverse effects on competition, then the fact that the potential losses to competition are more difficult to foresee than the benefits of the service should be a good reason not to take the proposal forward.”15

14 Report of the Independent Review of BBC Online, Philip Graf for DCMS, page 14. 15 Ibid, page 66.

Pact

RadioCentre

Response to BBC Trust Public Value Assessment of the BBC’s Local Video Proposal

1. Background2B 1.1. RadioCentre formed in July 2006 from the merger of the Radio Advertising Bureau (RAB) and the Commercial Radio Companies Association (CRCA). Its members consist of the overwhelming majority of UK Commercial Radio stations, who fund the organisation. 1.2. The role of RadioCentre is to maintain and build a strong and successful Commercial Radio industry - in terms of both listening hours and revenues. As such, RadioCentre operates in a number of areas including working with advertisers and their agencies, representing Commercial Radio companies to Government, Ofcom, copyright societies and other organisations concerned with radio, and working with stations themselves. RadioCentre also provides a forum for industry discussion, is a source of advice to members on all aspects of radio, jointly owns Radio Joint Audience Research Ltd (RAJAR) with the BBC, and includes copy clearance services for the industry through the Radio Advertising Clearance Centre (RACC). 1.3. RadioCentre has submitted separate responses to both the BBC Trust’s Public Value Assessment and Ofcom’s Market Impact Assessment. Ofcom and the BBC Trust are invited to consider both responses together, since they are designed to be complementary. Both Ofcom and the BBC Trust have also received copies of Action Stations! The Output and Impact of Commercial Radio which showcases Commercial Radio’s contribution to overall public value in UK media. We have also written to the Chairman of the BBC Trust, Sir Michael Lyons, to comment on the PVT process.

2. Executive3B Summary 2.1. Overview 2.1.1. In this response, we examine the BBC Local Video proposal’s compatibility with the Public Purposes, including the requirements set out within the ‘Representing the UK, its nations, regions and communities’ Purpose Remit for the BBC to “take care not to undermine a continuing plurality of local and regional media” 18 and “complement rather than replicate their provision”F F; and we stress the importance that, in undertaking this Public Value Test, the BBC Trust takes account of the public value which is already generated for local audiences by other local media operators apart from the BBC. 2.1.2. In particular, we believe that: a) The BBC can deliver its Public Purposes without the addition of a new Local Video Service; b) BBC Local Video would not complement existing local commercial services and, by competing directly, would not increase net public value for local audiences; and c) The BBC’s proposals would undermine plurality by weakening and compromising competing local voices.

18 BBC, ‘Purpose Remit: Representing the UK, its nations, regions and communities’, p. 7.

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2.2. The BBC can deliver its Public Purposes without the addition of a new Local Video Service 2.2.1. RadioCentre believes that a Local Video services is unnecessary for the fulfilment of the BBC’s Public Purposes. This is because there is no deficiency in the collective delivery of public value to local audiences by the UK’s commercially and publicly funded media. 2.2.2. The BBC Trust press release which accompanied the launch of the BBC Local Video Public Value Test stated that the proposal was a response to the identification of three ‘performance gaps’ in the BBC’s delivery of its Public Purposes. These gaps relate to the BBC’s service of communities and were identified during the Trust’s 2007 Purpose Remit research. However, findings from the same research demonstrate that there is no performance gap in the BBC’s delivery of online content and coverage of events. 2.2.3. Taken together, the performance gap research reveals that the BBC provides enough online content and coverage of events but that some audiences do not feel that the BBC provides them with tailored content which serves their nation, region or community. However, we disagree that it justifies the development of a new Local Video service by the BBC. 2.2.4. The first highlighted performance gap highlighted the 18% point difference between the 60% of participants in BMRB research who considered that it was important that “The BBC represents my area and my community to other people 19 in the UK” and the 42% believed that it did so.F F We believe that this gap would be narrowed if the BBC improved the editorial values of its existing television and radio network news, rather than making more local video available in 60 different areas. 2.2.5. It is also wrong to assume that a new local video service is required to meet the two further performance gaps identified (a 21% point difference between the 53% of people who considered that it was important that “the BBC helps me feel more involved in my local communities” and the 32% who thought that it did 20 soF F and the 14% point different between the 64% of people who considered that it was important that “the BBC caters for your area and your community” 21 and the 50% who thought that it did soF F). 2.2.6. These gaps exist because of the complementary role that the BBC has hitherto played in local markets; a role which we believe should continue, in order to protect net public value and plurality.

2.3. BBC Local Video would not complement existing local commercial services and, by competing directly, would not increase net public value for local audiences 2.3.1. The Public Purpose Remit requirement for the BBC to avoid undermining local plurality and complement regional and local content providers’ output obliges it to limit its participation in local markets. This is because commercial media operators generate substantial public value across the various communities of the UK. 2.3.2. The UK has developed diverse and highly competitive local media markets, driven by the high levels of consumer demand for local content and connectivity.

19 BBC Trust, ‘BBC Trust begins public value test into local video proposal;, 24 June 2008. 20 BBC Trust, ‘BBC Trust begins public value test into local video proposal;, 24 June 2008. 21 BBC, ‘BBC Management’s assessment of the public value of its Local Video proposals’, June 2008, p. 23.

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Furthermore, most consumers are happy to use media interchangeably in order to access local news and information content. This means that in assessing the public value which is generated for UK audiences, the Trust should place most emphasis on the editorial characteristics of content, rather the way in which it is distributed. 2.3.3. Commercial Radio stations play a significant role in meeting the demand for local news and information, as revealed by RadioCentre’s July 2008 report, Action Stations! The Output and Impact of Commercial Radio. 2.3.4. Furthermore, the considerable value which Commercial Radio continues to deliver to local radio audiences is beginning to be supplemented by on-line value which is essential both for the sector’s long term survival as the need to develop new business models unfolds, and for consumers, who are indicating a desire to access local content from local Commercial Radio websites. 2.3.5. At present, the BBC’s line-up of national and local radio services largely succeeds in complementing Commercial Radio’s output. This has been achieved by restricting the BBC’s involvement in the local radio market to services for English audiences aged over 50. 2.3.6. The BBC’s Local Video proposal would disrupt this balance by competing directly with Commercial Radio’s on-air and online output. This would undermine the viability of the affected services and lead to an overall reduction in public value. In fact, when account is taken of the BBC and Commercial Radio’s complementary roles, no performance gap exists in terms of engaging local communities. 2.3.7. The BBC’s proposals particularly ignore the complementary roles which Commercial Radio and the BBC play in serving audiences in Scotland, Wales and Northern Ireland. The BBC describes its proposal as adding “new tier of 22 localness” in these three nationsF F, something which overlooks the role played by Commercial Radio in contributing to overall public value and the damage which could be done to net public value if the BBC’s expansion plans negatively impact on Commercial Radio’s ability to sustain its current levels of delivery. 2.3.8. In England, where the BBC and Commercial Radio both have Local Radio stations, their roles are nevertheless still largely complementary due to the BBC’s focus on those aged 50+. In light of this, the BBC’s desire to achieve two 23 thirds of the reach for the service amongst those aged under 45F F puts it in direct competition with Commercial Radio stations for younger users’ time. In fact, the audience profile of English local radio already heralds potential problems which would be compounded by a new Local Video offering. 2.3.9. Our response also rejects the BBC’s argument that its Local Video proposal is distinguished by having no advertising and being universally available across the UK. Local advertising is an important part of the media landscape, with promotion of local services, events and products being highly valued by local audiences. Furthermore, the BBC’s national scale and financial resources enable it to achieve significant synergies and operational efficiencies, but we disagree that they point to a deficit in the net delivery of public value by operators who lack these advantages.

2.4. The BBC’s proposals would undermine plurality by weakening and compromising other local voices 2.4.1. RadioCentre believes that the proposed Local Video service would “undermine a

22 BBC, ‘BBC Management’s assessment of the public value of its Local Video proposals’, June 2008, p. 6. 23 BBC, ‘BBC Management’s assessment of the public value of its Local Video proposals’, June 2008, p. 7.

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24 continuing plurality of local and regional media”F F, in direct contradiction of the BBC’s responsibilities under the ‘Representing the UK, its nations, regions and communities’ Purpose Remit. 2.4.2. Although the BBC has made a number of suggestions as to how the adverse effects of its proposed service could be minimised, each is based on an assumption that partnership creates new voices. In fact, bringing two or more existing voices together has quite the opposite effect. Collaboration between the BBC and other operators would damage the fundamental structure of local media markets. 2.4.3. As we suggest in our response to Ofcom’s Market Impact Assessment, the UK's local media markets are characterised by having multiple well-matched players operating across different platforms who each have their own news-gathering resource, such as local press and radio stations. These outlets compete strongly for access to news stories, users' time and local advertising revenue – competition which extends across platforms. The rivalry which this engenders is at the heart of what makes these markets successful. 2.4.4. It is quite likely that individual local media outlets would welcome an exclusive offer from the BBC to access its content or collaborate on various activities. However we believe that this should be seen in the context of competitive markets in which individual content providers have strong incentives to seek ways to distinguish themselves from other operators. We do not believe that a universal offer of this kind would be in the interests of the market as a whole. Instead, this approach would damage the fundamental structure of local media markets. 2.4.5. Given that the BBC already has a presence in local markets via its English Local Radio stations and existing web presence, and given that the partnership ideas suggested by the BBC would not increase plurality as the BBC claims, we believe there are only two possible effects on plurality of its proposed new service. The first would be maintenance of the status quo, with the BBC remaining present alongside other local voices. The second is a reduction in the overall number of voices. 2.4.6. We submit that, just as the BBC’s proposal would undermine the net delivery of public value by other local media, so would undermine plurality through its impact on the market.

24 BBC, ‘Purpose Remit: Representing the UK, its nations, regions and communities’, p. 7.

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3. Introduction4B 3.1. BBC Management has set out proposals for a new Local Video service providing local news and information. It promises to provide distinctive, high-quality and relevant news; to safeguard two key Public Purposes (‘Representing the UK, its nations, regions and communities’ and ‘Sustaining citizenship and civil society’) and to close perceived gaps in how the BBC performs locally. 3.2. It intends the service to compensate for declining reach in BBC regional TV news, to attract a younger demographic, and to preserve the BBC’s valued provision of local news – which it argues has been in place since its foundation as a group of local radio stations in 1922. 3.3. The proposal claims self-imposed limits on geographical scope, editorial focus, the quantity of content and the speed of roll-out. It promises to extend its already (in its view) generous linking, to purchase content from other providers and to enable access to BBC content. 3.4. While we can understand the desire from the BBC to extend its services in this way, we have major concerns about the proposals. 3.5. We find nothing distinctive in the content the BBC proposes to provide; only in the speed and scale with which it can introduce a nation-wide service with unrivalled staffing, budget and cross-media support. 3.6. We consider that the identified performance gaps are either irrelevant to the proposal or ignore the BBC’s current role in the local market, hitherto designed to complement commercial provision. 3.7. We consider that public value, overall, will decline, as Commercial Radio’s current high level of local content provision is threatened by yet another publicly-funded market intervention. 3.8. We are concerned that Commercial Radio’s future investment in on-line content, at no public expense, will be put in jeopardy by the speed with which the BBC’s proposal will raise consumer expectations. 3.9. Finally, we find that, far from mitigating any impact, the BBC’s “self-imposed limits” actually contribute to a reduction in plurality and offer to purchase amounts of content are so small as to be meaningless. 3.10. In this response, we therefore examine the Local Video proposal’s compatibility with the Public Purposes, including the requirements set out within the ‘Representing the UK, its nations, regions and communities’ Purpose Remit for the BBC to “take care not to undermine a continuing plurality of local and regional 25 media” and “complement rather than replicate their provision”F F; and we stress the importance that, in undertaking this Public Value Test, the BBC Trust takes account of the public value which is already generated for local audiences by other local media operators apart from the BBC.

25 BBC, ‘Purpose Remit: Representing the UK, its nations, regions and communities’, p. 7.

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4. The5B BBC can deliver its Public Purposes without the addition of a new Local Video Service 4.1. Public Purpose ‘performance gaps’ 4.1.1. RadioCentre believes that a Local Video services is unnecessary for the fulfilment of the BBC’s Public Purposes. This is because there is no deficiency in the collective delivery of public value to local audiences by the UK’s commercially and publicly funded media. 4.1.2. The BBC Trust press release which accompanied the launch of the BBC Local Video Public Value Test stated that the proposal was a response to the identification of two ‘performance gaps’ in the BBC’s service of communities identified during the Trust’s 2007 Purpose Remit research. A third ‘performance gap’ is also cited by the BBC. All three related to the BBC’s ‘Representing the UK, its nations, regions and communities’ Public Purpose, rather than ‘Sustaining citizenship and civil society’, the other Public Purpose cited by the BBC Trust and BBC in relation to this proposal. 4.1.3. The performance gaps are as follows: a) Firstly, an 18% point difference between the 60% of participants in BMRB research who considered that it was important that “the BBC represents my area and my community to other people in the UK” and the 42% 26 believed that it did soF F. b) Secondly, a 21% point difference between the 53% of people who considered that it was important that “the BBC helps me feel more involved in my local communities” and the 32% who thought that it did 27 soF F. c) Thirdly, the BBC cited a 14% point different between the 64% of people who considered that it was important that “the BBC caters for your area 28 and you community” and the 50% who thought that it did soF F. 4.1.4. However, neither BBC Management nor the Trust have highlighted two additional pieces of research which demonstrate that in two areas highly relevant to this proposal, there is no performance gap: a) Firstly, there is no performance gap in the BBC’s delivery of online content. 44% of people thought it important that “The BBC provides quality content that I find enjoyable or useful on the internet”, with 43% 29 agreeing that it does soF F. b) Secondly, there is no performance gap in the BBC’s coverage of events. One of the components of the BBC proposal is a facility to provide a maximum of 10 live streams per year per area of “key local events”. Yet whilst 66% of respondents thought that it was important that “The BBC provides me with the opportunity to share the same experiences with other people (like major events, live events and popular programmes)”, 30 a greater number (68%) agreed that it was already doing soF F. This research does not have a specific local focus, but nevertheless suggests that the BBC provides sufficient coverage of live events across the UK. 4.1.5. Taken together, this performance gap research reveals that the BBC provides

26 BBC Trust, ‘BBC Trust begins public value test into local video proposal;, 24 June 2008. 27 BBC Trust, ‘BBC Trust begins public value test into local video proposal;, 24 June 2008. 28 BBC, ‘BBC Management’s assessment of the public value of its Local Video proposals’, June 2008, p. 23. 29 BBC Trust, ‘Purpose Remits: The Public’s Priorities For Action’, December 2007, p. 6, 3http://www.bbc.co.uk/bbctrust/assets/files/pdf/consult/purpose_remits/priorities.pdf. 30 BBC Trust, ‘Purpose Remits: The Public’s Priorities For Action’, December 2007, p. 5, 3http://www.bbc.co.uk/bbctrust/assets/files/pdf/consult/purpose_remits/priorities.pdf.

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enough online content and coverage of events but that some audiences do not feel that the BBC provides them with tailored content which serves their nation, region or community. Having identified this at the end of the BBC Trust’s Public Purpose review in December 2007, the Trust introduced a new priority into the ‘Representing the UK, its nations, regions and communities’ for the BBC to: ‘Cater for the different nations, regions and communities of the UK. The BBC should provide a range of output, including original content, designed to meet the needs of the nations, regions and 31 communities of the UK.’F 4.1.6. At a superficial level, this priority would appear to suggest that the BBC should extend its current line-up of services to provide local content for every demographic and area of the UK, signalling a major expansion of BBC activity across all platforms. Yet this overlooks the BBC’s broader role in local markets.

4.2. The BBC’s delivery of Public Purposes at a local level must complement the market 4.2.1. Another crucial component of the BBC’s ‘Representing the UK, its nations, regions and communities’ Purpose Remit are requirements for the BBC to “take care not to undermine a continuing plurality of local and regional media” and 32 “complement rather than replicate their provision”F F. 4.2.2. This complementary role for the BBC in local media markets was relatively straightforward to maintain whilst the BBC’s activities were largely restricted to broadcast platforms. Figure 1 shows that the BBC’s existing line-up of TV and radio services makes no attempt to provide local, regional and national content to all ages and areas in the UK. In light of this, it is hardly surprising that some respondents to Purpose Remit research identified (correctly) that the BBC is not fully serving them in this regard.

Figure 1. The BBC’s broadcast output for the nations, regions and communities of the UK

Universally Designed for all Type of content available? Full-time service? demographics?

UK-wide radio Yes Yes Yes

UK-wide TV Yes Yes Yes

No - not available in Provided for adults National radio England Yes only

Scottish, Welsh and Northern Irish content is opt-out No - not available in from main UK National TV England service Yes

31 BBC Trust, ‘Finalising Purpose Remits: An Explanatory Note’, December 2007, p. 11, http://www.bbc.co.uk/bbctrust/assets/files/pdf/consult/purpose_remits/explanatory_note.pdf 32 BBC, ‘Purpose Remit: Representing the UK, its nations, regions and communities’, p. 7.

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Sub-national No BBC services regional radio available n/a n/a

Regional content is Sub-national Only available in opt-out from main regional TV England UK service Yes

No - not available in Scotland or Wales; No – English Local Radio Foyle is only Radio is provided for Local radio part-time service Yes over 50s only

No BBC services Local TV available n/a n/a

4.2.3. This demonstrates that prior to the launch of bbc.co.uk, the BBC’s role in the nations, regions and localities of the UK largely consisted of regional and national television programmes for all audiences at certain times of the day, full- time local speech and music radio stations for the over 50s in England, and national speed-led radio stations for all adults in Scotland, Wales and Northern Ireland. The fact that the BBC is not universally present in every market sector has undoubtedly helped its role to be a complementary one. 4.2.4. The BBC’s move into online output has complicated this picture, with local websites expanding upon the existing television and radio provision. The recent BBC Trust review of bbc.co.uk found that the BBC's local sites appeal to younger 33 audiences than BBC local radioF F but also that they are rated as being of lower 34 quality than some other servicesF F. The Trust also found that the BBC’s local 35 sites are “not perceived as original or different”F F. These findings demonstrate the danger that in moving beyond the constraints of its traditional role in local markets, the BBC duplicates rather than complements market activity, in direct contradiction of the Purpose Remit requirement that the BBC should 36 “complement rather than replicate [other local and regional media] provision”F F. 4.2.5. The BBC’s new proposals similarly lack a clear sense of what the BBC’s complementary role is in serving the UK’s nations, regions and communities. Nowhere does the BBC provide a compelling logic as to (i) why its current role and services should be expanded with additional news, sport, weather and community life content; (ii) why this content should be provided for every one of the 60 areas proposed by the BBC; (iii) why the format for providing this content should be online video; and (iv) why this content should be designed for a younger audience than that which is targeted by its broadcast services.

4.3. The proposals confuse national, regional and local provision and demands 4.3.1. One of the major challenges for the BBC Trust in undertaking this Public Value Test is to distinguish between the BBC’s role and performance in serving different tiers of sub-UK output. Content for the nations is very different to content which is provided for the regions. In turn, audiences do not readily substitute regional content for local content. Audience expectations are very different in each case; widening or narrowing a service or programme’s

33 BBC Trust; Ofcom, ‘Local Video Public Value Test: Description of Service’, June 2008, p. 23. 34 BBC Trust, ‘Service Review: bbc.co.uk’, May 2008, p. 35. 35 BBC Trust, ‘Service Review: bbc.co.uk’, May 2008, p. 41. 36 BBC, ‘Purpose Remit: Representing the UK, its nations, regions and communities’, p. 7.

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geographical focus has an obvious and clear impact on its appeal. 4.3.2. This point is worth emphasising because in reading the BBC’s proposal and supporting documents we were unclear about exactly what the size of area was that the BBC felt it needed to target. In more than one place, data about one type of content (such as regional television news) was cited by the BBC in support of generating additional content for much more local audiences. Further ambiguity arises because it is unclear whether participants in Purpose Remit research would have had a consistent understanding of the size of area implied by the term ‘community’. 4.3.3. We view local, regional and national content markets as being distinct tiers. However, where the distinction lies differs between different areas and from person to person. As Ofcom identified in its PSB review, “The distinction between regional and local is to some extent blurred. One person’s ‘local’ is their street or immediate community (something that has been described as ‘ultra local’ in some quarters), whereas others see ‘local’ as applying to their town or city (as per local TV station Channel M in Manchester) or indeed to their county 37 (as is largely the case in the BBC’s local radio map)”F F.

37 Ofcom, ‘PSB Review Phase 1: The Digital Opportunity’, April 2008, p. 125.

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4.4. The highlighted performance gaps are not reasons for delivering the proposed new service 4.4.1. In light of this ambiguity, it is worth considering whether the BBC’s performance in providing regional and network content might have a bearing on the ‘performance gaps’ identified by the BBC Trust. Our analysis suggests that there is a high chance that at least some of these gaps could be narrowed if the BBC improved the editorial values of this existing content. Others the BBC should not aim to narrow since they simply highlight the BBC’s currently complementary role in the local media market. 4.4.2. The first highlighted performance gap highlighted the 18% point difference between the 60% of participants in BMRB research who considered that it was important that “The BBC represents my area and my community to other people 38 in the UK” and the 42% believed that it did so.F F This suggests that licence fee payers would like their area to be accurately and sufficiently reflected at a national level, rather than for more local video to be available in their area. (Although proposed usage of individual BBC Local Video sites is not restricted to audiences in those areas, the local population does appear to be the core focus for the service.) 4.4.3. It is also relevant to quote the BBC Trust’s ‘Impartiality Report: BBC Network News and Current Affairs Coverage of the Four UK Nations’ which found that “the BBC is not reporting the changing UK with the range that might be expected, given the fact that audiences have expressed a desire to learn more 39 about other parts of the UK in the BBC’s coverage”F F. The report also found that 40 “there is insufficient precision and clarity in the BBC’s network coverage”F F. 4.4.4. The BBC Trust’s ‘Purpose Remits: The Public’s Priorities for Action’ document revealed that this particular performance gap was much higher in Scotland (-30 41 points) and Northern Ireland (-26 points)F F. This suggests that this performance gap particularly reflects a need for the BBC to provide adequate representation of Scottish and Northern Irish affairs on network television and radio news. 4.4.5. We also believe it is wrong to assume that a new local video service is required to meet the two further performance gaps identified (a 21% point difference between the 53% of people who considered that it was important that “the BBC helps me feel more involved in my local communities” and the 32% who thought 42 that it did soF F and the 14% point different between the 64% of people who considered that it was important that “the BBC caters for your area and your 43 community” and the 50% who thought that it did soF F). 4.4.6. These gaps exist because of the complementary role that the BBC has hitherto played in local markets; a role which we believe should continue, in order to

protect net public value and plurality, as we set out below in section 5.3X .X

38 BBC Trust, ‘BBC Trust begins public value test into local video proposal;, 24 June 2008. 39 BBC Trust, ‘The BBC Trust Impartiality Report: BBC Network News and Current Affairs Coverage of the Four UK Nations’, June 2008, page 7. 40 BBC Trust, ‘The BBC Trust Impartiality Report: BBC Network News and Current Affairs Coverage of the Four UK Nations’, June 2008, page 7. 41 BBC Trust, ‘Purpose Remits: The Public’s Priorities For Action’, December 2007, p. 4, 3http://www.bbc.co.uk/bbctrust/assets/files/pdf/consult/purpose_remits/priorities.pdf. 42 BBC Trust, ‘BBC Trust begins public value test into local video proposal;, 24 June 2008. 43 BBC, ‘BBC Management’s assessment of the public value of its Local Video proposals’, June 2008, p. 23.

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5. BBC6B Local Video would not complement existing local commercial services and, by competing directly, would not increase net public value for local audiences 5.1. Consumers value local content across all platforms 5.1.1. The Public Purpose Remit requirements for the BBC to avoid undermining local plurality and complement regional and local content providers’ output oblige it to restrict the scope of its participation in local markets. This is because commercial media operators generate substantial public value in each of the 60 areas covered by the Local Video proposal. 5.1.2. The UK has developed diverse and highly competitive local media markets, driven by the high levels of consumer demand for local content and connectivity. 44 This demand is reflected in findings from The Big ListenF F, a survey of Commercial Radio listeners undertaken in 2007 (figure 2). Every market has its own range of different providers, who contribute to plurality by distributing a large quantity and breadth of local content across a range of platforms.

Figure 2. “I like to know what’s going on in my local community” (% Agree) (Source: RadioCentre, The Big Listen)

74 CR BBC East S/SE Yorks London Average Scotland Midlands NW/NE/Ulster SW/Wales/West

5.1.3. Furthermore, most consumers are happy to use media interchangeably in order to access local news and information content. This means that in assessing the public value which is generated for UK audiences, the Trust should place most emphasis on the editorial characteristics of content, rather the way in which it is distributed. 5.1.4. This is backed up by new YouGov research commissioned by RadioCentre and appended to this submission which shows that 69% of Commercial Radio

44 The Big Listen was a survey of more than 10,000 Commercial Radio Listeners undertaken by YouGov in June 2007 for RadioCentre

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listeners agree that “As long as I get the local news and information I need I don’t mind whether I get it on-line, in my local newspaper, from 45 my local TV news programme or from my local radio station”F F. Only 11% disagree. 5.1.5. Interestingly, there is also evidence that this is becoming ever more important, with younger Commercial Radio listeners showing a particularly strong interest in substituting between different platforms. 73% of 18-24s agree with the above statement, with this figure rising to 76% amongst 25-34s. Only 63% of those aged 55+ agreed. 5.1.6. Other research has identified a similar trend. For instance, the BBC- commissioned provisional market impact research for this Public Value Test 46 concluded that although media are more complementary than substitutableF F, 47 different media are no longer such discrete marketsF F. For the purposes of this PVT, it found a degree of substitutability between media platforms, particularly 48 in local news and local eventsF F. Elsewhere, a respondent to separate BBC research said, “The quality isn’t actually in the pictures that are taken, the quality is in the actual information that you’re obtaining from around the county, 49 so therefore your community”F F. 5.1.7. These findings mean that rather than identifying whether licence fee payers would value new online Local Video, the Trust should focus on establishing whether local communities across the UK are provided with local content which is sufficiently accessible and of a sufficient quality as to ensure the effective delivery of overall public value.

5.2. Commercial Radio generates significant public value for local audiences 5.2.1. Commercial Radio stations play a significant role in helping to meet the demand for accessible and high quality local content, as revealed by RadioCentre’s July 2008 report, Action Stations! The Output and Impact of Commercial Radio. The report is the result of a substantial audit that was conducted across 233 Commercial Radio stations in April 2008. It highlights the industry’s investment in vital areas such as news, weather, travel and information; cultural and social action; community involvement; charitable activities and speech broadcasting. It is available in hard copy by contacting RadioCentre or in electronic format from our website (www.radiocentre.org). Comparison with a previous audit of Commercial Radio output undertaken by CRCA in 2004 shows that: a) The number of Commercial Radio bulletins with local news has increased by 2.4% from 14.8 to 15.1 per station every day; b) The percentage of bulletins with local news has increased by 5% from 65.85% to 69.02%; c) The duration of weather bulletins has increased by 30% from 0.43 to 0.56 minutes; d) The duration of travel bulletins has increased by 10% from 0.97 to 1.06 minutes;

45 YouGov research for RadioCentre, July – August 2008 (see report appended to this submission). 46 Human Capital, ‘An Independent Preliminary Assessment of the Market Impact of the BBC’s Local Video Proposals’, 11 April 2008, p. 6. 47 Human Capital, ‘An Independent Preliminary Assessment of the Market Impact of the BBC’s Local Video Proposals’, 11 April 2008, p. 6. 48 Human Capital, ‘An Independent Preliminary Assessment of the Market Impact of the BBC’s Local Video Proposals’, 11 April 2008, p. 32-3. 49 BBC, ‘BBC Management’s assessment of the public value of its Local Video proposals’, June 2008, p. 36.

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e) The duration of What’s On bulletins has increased by 33% from 0.9 to 1.2 minutes; 5.2.2. Such data undermines the assertions of those who suggest – as Human Capital does at one place in its provisional market impact assessment – that listeners 50 access local radio for “music, entertainment and chat”F F. Increased provision in local news and information is a strong indicator of increased demand. In fact Human Capital contradicts itself on this point, noting that weather and traffic are 51 particularly important content areas on radioF F. BMRB’s research reached a similar conclusion, showing that news, sport and weather are the most 52 important genres of local content to local radioF F. 5.2.3. There are strong incentives for Commercial Radio stations to expand their existing roles as local content providers on the internet and establish themselves as integrated cross-media businesses over the next few years: a) Barriers to entry are low, with reduced fixed costs compared to radio and attractive synergies available to those with existing local news-gathering and content generation presences. b) The size of the potential market for such services is growing rapidly, with Ipsos Mori research for Ofcom’s PSB review finding that 27% of people agree that “websites about my local area are a better way of finding out information for me than the main TV channels”, a compared with just 4% 53 54 in 2003F F. Amongst those with broadband access, this rose to 40%F F. Separate Ofcom data reveals that 30% of adults have used the internet to 55 watch video content, with reasonable variation evident across the UKF F. In Wales, the figure stood at 24%, which is likely to be linked to its lower broadband penetration. Conversely, adults in London (40%) and Edinburgh (45%) were the most likely to have watched video content online. c) Broadband take-up continues to grow and high-speed connections are becoming available on an ever increasing number of fixed and mobile devices. d) There is a strong imperative to find new business models as traditional advertising-funded media face increasing competition. 5.2.4. The effect of these factors has been to encourage substantial growth in online content investment. As recently as January 2006, Ofcom’s Digital Local report used economic modelling to predict that “commercially-funded local services could be sustainable in a digital environment, using all major distribution 56 platforms to maximise reach and impact“F F – particularly in metropolitan areas. Whilst it suggested that there may be a role for the BBC in these markets, Ofcom also suggested “Limiting the BBC’s involvement to give maximum

50 Human Capital, ‘An Independent Preliminary Assessment of the Market Impact of the BBC’s Local Video Proposals’, 11 April 2008, p. 11. 51 Human Capital, ‘An Independent Preliminary Assessment of the Market Impact of the BBC’s Local Video Proposals’, 11 April 2008, p. 33. 52 Human Capital, ‘An Independent Preliminary Assessment of the Market Impact of the BBC’s Local Video Proposals’, 11 April 2008, p. 13. 53 Ofcom, ‘PSB Review Phase 1: The Digital Opportunity’, April 2008, p. 116. (Ofcom states that comparisons between data from 2003 and 2007 ‘should be made with caution as the two surveys were conducted with different methodologies and the overall structure of the questionnaire has changed’). 54 Ofcom, ‘PSB Review Phase 1: The Digital Opportunity’, April 2008, p. 116. 55 Ofcom, ‘Nations and Regions Communications Market Report 2008: UK Summary’, May 2008, http://www.ofcom.org.uk/research/cm/cmrnr08/uksummary.pdf. 56 Ofcom, ‘Digital Local: Options for the future of local video content and interactive services’, January 2006, p. 3.

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57 opportunity to commercial and community alternatives”F F. 5.2.5. Just over two years later, that picture is already being realised. Research undertaken by MTM London for Ofcom’s PSB review found that there is a “significant” availability of online local, regional and national content across the 58 UKF F, with the online commercial news sector spending “in the region of £200m 59 per annum”F F. 5.2.6. These trends are also reflected in findings from The Big Listen, showing that consumers can now access local news and information from more different places than 5 years ago (figure 3) and that the internet is changing how audiences access news and information (figure 4).

57 Ofcom, ‘Digital Local: Options for the future of local video content and interactive services’, January 2006, p. 3. 58 Ofcom, ‘PSB Review Phase 1: The Digital Opportunity’, April 2008, p. 60. 59 MTM London, ‘Estimating the value of public service content online’, April 2008, p. 2.

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Figure 3: “There are more different places I can get local news and information than 5 years ago” (% agree) (Source: RadioCentre, The Big Listen)

85 45+ North 16-24 25-34 35-44 London Average Rest of South of Rest Scotland & Ulster & Scotland Midlands and Wales and Midlands

Figure 4: “The internet is changing how I access news and information” (% agree) (Source: RadioCentre, The Big Listen)

83 45+ North 16-24 25-34 35-44 London Average Rest of South of Rest Scotland & Ulster & Scotland Midlands and Wales and Midlands

5.2.7. Commercial Radio is playing an active role in this evolution of local content services. Figure 4 compiles data from Action Stations! outlining the widespread

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availability of local content on local Commercial Radio websites. It shows that local news is available on 87% of local Commercial Radio station websites. Similarly, figure 5 outlines the most popular sections of the websites of GCap Media’s ‘One Network’ group of local radio stations. []. Figure 5. “What material does your website contain?” (Source: RadioCentre, Action Stations!)

100 91 90 87 87 86 Examples of 82 other local info 80 77 online: links to 70 local govt; 60 55 local music; 50 school closures; local % response 40 sport; local 30 business 20 directory; interactive 10 service for 0 Travel Local What's On Advertising Competitions

Figure 6. The most popular sections of One Network stations’ websites by page impressions (Source: GCap Media, June 2008) [] 5.2.8. We have provided further detail about RadioCentre members’ individual plans to maintain and extend their investment in local and online content in our response to Ofcom’s Market Impact Assessment. []. 5.2.9. The considerable value which Commercial Radio continues to deliver to local radio audiences is beginning to be supplemented by on-line value which is essential both for the sector’s long term survival as the need to develop new business models unfolds, and for consumers, who are indicating a desire to access local content from local Commercial Radio websites.

5.3. The current roles of Commercial Radio and the BBC are complementary 5.3.1. Within the UK’s local cross-media markets, the BBC and Commercial Radio currently play largely complementary roles in serving local audiences. This is because although they use the same platforms, each provides content with a different editorial and demographic focus. Exploring these current roles of BBC and Commercial local radio not only highlights their complementarity, but also

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offers a possible explanation for one of the performance gaps highlighted by the BBC Trust. 5.3.2. The BBC’s current line-up of national and local radio services largely reflects the requirement of the ‘Representing the UK, its nations, regions and communities’ 60 Purpose Remit for the BBC to “complement rather than replicate”F F provision such as that which is contributed by Commercial Radio. This balance has been achieved by restricting the BBC’s involvement in the local radio market to services for English audiences aged over 50. 5.3.3. The BBC’s Local Video proposal would disrupt this balance by competing directly with Commercial Radio’s on-air and online output. This would undermine the viability of the affected services and lead to an overall reduction in public value. We discuss this impact further in our response to Ofcom’s Market Impact Assessment, whilst also drawing attention to the lack of granular information available about the BBC’s proposed service to enable us to understand exactly how the proposed service would interact with Commercial Radio (see section 5.1 of our submission to Ofcom). 5.3.4. Figures 7 and 8 show the respective current performance of Commercial Radio and the BBC in keeping listeners in touch with local communities and getting them involved in local events and activities. Respondents were asked whether they thought that only Commercial Radio fulfilled certain objectives, whether only the BBC fulfilled them, or whether both or neither did. The findings are also broken down by area, as well as for Commercial Radio (CR) and BBC Radio listeners.

60 BBC, ‘Purpose Remit: Representing the UK, its nations, regions and communities’, p. 7.

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Figure 7. “Keeps me in touch with where I live” (Source: RadioCentre, The Big Listen, 2007)

70 Neither 60 Both 50 Only BBC Only CR 40

0 CR BBC East S/SE Yorks London Average Scotland Midlands NW/NE/Ulster SW/Wales/West

Figure 8. “Gets me involved with local events and activities” (Source: RadioCentre, The Big Listen, 2007)

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100

70 Neither Both 60 Only BBC 50 Only CR 40

0 CR BBC East S/SE Yorks London Average Scotland Midlands NW/NE/Ulster SW/Wales/West

5.3.5. This data demonstrates that Commercial Radio has a particularly substantial role in local communities across the UK. It also provides an alternative way of assessing the performance gaps highlighted by the BBC Trust. The second performance gap identified by the BBC Trust is the 21% point difference between the 53% of people who considered that it was important that “The BBC helps me feel more involved in my local communities”, and the 32% who thought that it did so. Local Commercial Radio may instead be serving this 21% of people, since 35% of people find that only Commercial Radio plays a role in “keeping me in touch with where I live”. 5.3.6. Only 8% said that neither the BBC nor Commercial Radio performs this role. Given that this 8% may consist of people who do not wish to be kept in touch with where they live, or at least not through radio, the evidence would suggest that when account is taken of the BBC and Commercial Radio’s complementary roles, no performance gap exists in terms of engaging local communities.

5.4. Net public value would be particularly damaged in Wales, Scotland and Northern Ireland 5.4.1. Although the BBC does not offer local radio stations in Scotland, Wales and Northern Ireland, the evidence suggests that audiences in each of these nations is well served in terms of overall public value. The BBC describes its proposal as 61 adding “new tier of localness” in these three nationsF F, something which overlooks the role played by Commercial Radio in contributing to overall public value and the damage which could be done to net public value if the BBC’s expansion plans negatively impact on Commercial Radio’s ability to sustain its current levels of delivery. 5.4.2. We believe that the BBC has failed to reflect properly the differing roles of the

61 BBC, ‘BBC Management’s assessment of the public value of its Local Video proposals’, June 2008, p. 6.

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BBC and Commercial Radio in Scotland, Wales and Northern Ireland in developing its proposal. This failure also puts the BBC at risk of undermining the delivery of public value by other operators, given that it is predicting 20% reach for the service in some areas of Scotland and Wales (compared to 3% in 62 London)F F. 5.4.3. Data from Action Stations! and The Big Listen demonstrates that Commercial Radio plays a particularly important role in delivering public value to local audiences in Wales, Scotland and Northern Ireland. Full details are provided in Appendix 1 of this submission. Particularly relevant findings from the Action Stations! report include the following: a) Across the UK, 69% of Commercial Radio bulletins contain local news. In Scotland, Northern Ireland and Wales, this figure rises to 70%, 93% and 83% respectively; b) Of these bulletins, the average volume of local news provided across the UK is 2.0 minutes. In Scotland, Northern Ireland and Wales, this figure rises to 2.1, 2.5 and 2.3 minutes respectively; c) Against a national average of 17.0, Scottish, Northern Irish and Welsh stations provide an average of 14.4, 22.3 and 20.3 weather bulletins each day, plus an average of 9.0, 13.7 and 9.6 travel bulletins, compared to 12.0 nationally; and d) Against a national average of 87%, 96% of Scottish, 100% of Northern Irish and 82% of Welsh Commercial Radio station websites contain local news. 5.4.4. Because local Commercial Radio is particularly important to non-English audiences, those audiences are equally important to Commercial Radio. Total Commercial Radio revenue per head in Scotland in 2007 was £11.46, compared 63 to £7.82 in EnglandF F. Furthermore, local Commercial Radio stations accounted for 43% of all radio listening in Scotland in 2007, compared to 32% across the 64 UK as a wholeF F. 5.4.5. When Commercial Radio’s increased investment in local content in the nations is set alongside its higher-than-average revenue per head of population and listening figures, it is clear that Commercial Radio’s business model in the nations is built upon the complementary roles which have been established between the commercial sector and the BBC.

5.5. Net public value would also be diminished because the new BBC Local View service sets out to target under 45s. 5.5.1. In England, where the BBC and Commercial Radio both have Local Radio stations, their roles are nevertheless still largely complementary due to the BBC’s focus on those aged 50+. In light of this, the BBC’s desire to achieve two 65 thirds of the reach for the service amongst those aged under 45F F puts it in direct competition with Commercial Radio stations for younger users’ time. As we have set out above in discussing media substitutability, listeners may be less likely to access local Commercial Radio services if the local news and information they need is being delivered on-line by an enhanced BBC service.

62 BBC, ‘BBC Management’s assessment of the public value of its Local Video proposals’, June 2008, p. 33. 63 Ofcom, ‘The Communications Market Report: Nations and Regions – Radio charts’, May 2008, http://www1.bsc.org.uk/research/cm/cmrnr08/radio/. 64 Ofcom, ‘The Communications Market Report: Nations and Regions – Radio charts’, May 2008, http://www1.bsc.org.uk/research/cm/cmrnr08/radio/. 65 BBC, ‘BBC Management’s assessment of the public value of its Local Video proposals’, June 2008, p. 7.

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5.5.2. The BBC’s own public value assessment of its proposals suggests that it has failed to understand the limitations of its role. It notes that “older audiences tend to regard the BBC’s performance as most effective. This is the audience that is best served by the BBC’s nations and regional/local radio and TV 66 news”F F. We believe that this finding is to be expected, and reflects the current and complementary role of the BBC, rather than offering a reason for its remit to be expanded. 5.5.3. In reviewing bbc.co.uk, the BBC Trust expressed ambivalence towards the BBC's interest in using bbc.co.uk to extend BBC news reach amongst audiences which it does not currently attract. The Trust’s service review report stated, “we do not fully agree with BBC management’s submission to the review which states that bbc.co.uk represents an opportunity to extend BBC news’ reach among 67 ‘underserved’ audiences”F F. 5.5.4. In making this remark the Trust also said that “bbc.co.uk may help the BBC reach younger adults with news but the less well off remain better served by television and radio news”, suggesting (correctly we feel, given the data outlined above) that the internet is an effective means of attracting young audiences. However it also raises the important point that in targeting younger audiences via the internet, the BBC may actually fail to increase its reach amongst those who are particularly reliant on the BBC (rather than commercial media operators) for local or regional content – including older audiences and those without access to the internet. 5.5.5. This is supported by one of the comments made in response to bbc.co.uk service review research, that the BBC targets its "most innovative pieces and 68 engaging pieces" at children and teens, not so much at my age group (50)"F F. 5.5.6. Of course, an increased focus on younger audiences by the BBC’s local newsgathering operations would not only be felt by users of bbc.co.uk or Commercial Radio. The fact that staff and resources would be shared between the proposed Local Video websites and BBC Local Radio means that adopting this target would be likely to have a material impact on the existing editorial output of BBC Local Radio. This means it could have a further indirect impact on Commercial Radio, by increasing the competition from BBC Local Radio services for younger listeners.

5.6. The audience profile of English local radio already heralds potential problems which would be compounded by a new Local Video offering 5.6.1. Figure 9 demonstrates the division of responsibilities between the BBC and Commercial Radio in terms of reaching a young audience. It shows that the under 45 year old audience sought by the BBC for its Local Video proposal contributes 62% of local Commercial Radio’s listening hours but only 19% of BBC Local Radio’s listening hours. It also demonstrates that 71% of listening 69 hours gained by local Commercial Radio are contributed by under 50sF F, with only 24.2% of BBC Local Radio’s listening hours coming from the same source. 5.6.2. In fact this data shows that, far from failing to serve younger audiences, BBC Local Radio’s is gaining a quarter of its overall listening hours from those aged under 50. Its overall reach amongst younger audiences is even higher than this (because older listeners tend to listen for longer): around a third of those who listen to BBC Local Radio at least weekly are under 50 and the average age of a

66 BBC, ‘BBC Management’s assessment of the public value of its Local Video proposals’, June 2008, p. 23. 67 BBC Trust, ‘Service Review: bbc.co.uk’, May 2008, p. 30. 68 BBC Trust, ‘Service Review: bbc.co.uk’, May 2008, p. 25. 69 BBC Local Radio targets listeners aged 50+

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BBC Local Radio listener is 53, much lower than the average age of someone 70 aged 50+ in the UKF F. 5.6.3. These figures demonstrate that current radio programming practice is already threatening the complementary roles of BBC and Commercial Local Radio and that the younger-focused new BBC Local Video Service would impose further damage.

Figure 9. Share of radio listening hours accounted for by BBC Local Video target audience and BBC Local Radio non-target audience

80 71 70 62 60 56.9

50 48.6 All Radio 40 BBC Local % Hours 30 24.2 CR Local 19 20

0 BBC Local Video target BBC Local Radio non- audience (4-44s) target audience (4-49s)

5.6.4. In support of its plan to focus its Local Video proposal on the young, the BBC argues that the decline in audiences for regional television news is more severe 71 amongst younger audiencesF F. We fundamentally disagree that the BBC should aggressively target young internet users with local content as a means for compensating for the level of reach amongst these audiences for regional TV programming. Notwithstanding our concerns about the inappropriateness of citing data about regional content in support of a proposal for local content, we believe that younger audiences are watching less BBC regional news because they are well served elsewhere. 5.6.5. In research for Ofcom’s PSB Review, 16-24 year olds were nearly 30% more likely to cite radio (and therefore Commercial Radio, given its younger demographic focus) as their main source of local news than the population as a 72 wholeF F. Furthermore, data presented by GCap Media demonstrates that its 73 websites attract a significant audience amongst those aged under 50. []F F.

Figure 10. Demographic profile of users of the One Network stations’ websites (source: GCap Media)

[]

70 All audience and population data is RAJAR Q1 2008. 71 BBC, ‘BBC Management’s assessment of the public value of its Local Video proposals’, June 2008, p. 26. 72 Ofcom, ‘PSB Review Phase 1: The Digital Opportunity’, April 2008, p. 30. 73 Source: GCap Media

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5.6.6. The GCap data reinforces our concern that the BBC’s proposed service would succeed in attracting the younger audience the BBC seeks, and that this would be damaging to the existing balance in the delivery of public value. Other data also supports this view: a) The BBC's current local sites already appeal to younger audiences than BBC local radio. According to BBC figures published by the BBC Trust in its bbc.co.uk service review, “around a third of users are aged under 35, 74 compared with around 14% of BBC local radio listeners”F F. 75 b) Over 60% of BBC West Midlands local TV trial users were under 45F F. Similarly, over 60% of respondents who said they would definitely use the new service are under 45, with 35% under 35, according to BMRB data which RadioCentre has not had full access to but which is referred to by 76 the BBCF F. c) 16-24s and 25-34 year olds were the two groups most likely to express an 77 interest in using the service after being shown video demonstrationF F. d) Opinion Leader Research revealed that respondents prefer the BBC local 78 video proposal to BBC local radioF F. However, this is unsurprising; BBC Local Radio is not targeted at under 50s so it will inevitably score less highly in a survey of people of all ages. We find it surprising that the BBC did not explain this to Opinion Leader in commissioning the research.

5.7. Advertising makes an important contribution to local media relevance 5.7.1. One of the ways in which the BBC has argued the distinctiveness and public value of its proposal is that “Local Video would be advertising-free and subscription-free, something which audiences value very highly and see as 79 distinctive”F F. We believe that it is inappropriate for the BBC to cite the natural advantage of its unique and privileged funding arrangements as a point of distinctiveness. 5.7.2. In fact local advertising is an important part of the media landscape, with promotion of local services, events and products being highly valued by local audiences. 53% of respondents to The Big Listen said that they could be interested in ads that relate to their local area, with only 23% disagreeing. This implies that diverting audiences to BBC Local Video sites (via the convention of heavy BBC cross-promotion) rather than radio stations or websites containing local advertising would deprive audiences of something which they value. 5.7.3. We also believe that the BBC has fundamentally misunderstood the implications of the research it cites about licence fee payers’ views on advertisements. The fact that “advertisements would interfere with [their] enjoyment of BBC programmes” does not necessarily mean they would interfere with their enjoyment of other non-BBC programmes (for which they have not had to pay a licence fee) and cannot, with any certainty, be transferred to enjoyment of content on-line. 5.7.4. Finally we note that Commercial Radio and local websites are both free at the point of use, meaning that the BBC proposal is not rendered distinctive by being subscription-free.

74 BBC Trust, ‘Service Review: bbc.co.uk’, May 2008, p. 35. 75 BBC, ‘BBC Management’s assessment of the public value of its Local Video proposals’, June 2008, p. 35. 76 BBC, ‘BBC Management’s assessment of the public value of its Local Video proposals’, June 2008, p. 35. 77 British Market Research Bureau, ‘Independent Quantitative Research to feed into the Market Impact Assessment of the BBC Local Video Service’, March 2008, p. 20. 78 ‘BBC Management’s assessment of the public value of its Local Video proposals’, June 2008, p. 8. 79 BBC, ‘BBC Management’s assessment of the public value of its Local Video proposals’, June 2008, p. 40-41.

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5.8. National scale would not distinguish the BBC’s local video service from other operators 5.8.1. BBC Management cites the UK-wide universality of its proposal as a further point of distinctiveness. Again we disagree. Such universality is instead the result of the BBC’s uniquely privileged funding position. The BBC’s national scale and financial resources enable it to achieve significant synergies and operational efficiencies, but we disagree that they point to a deficit in the net delivery of public value by operators who lack these advantages. 5.8.2. As the BBC says, “It is highly likely that the BBC will be the only provider that 80 can offer this service universally across the UK.”F F However, national scale is in no way a prerequisite for local relevance. The biggest implication of the BBC’s scale is that it would make it easier for the BBC to roll out its local service quickly, powerfully and without regard for individual market nuances. However, for citizens, and for the market, there are disadvantages. 5.8.3. Citizens’ differing views and expectations, many of which we have cited elsewhere in this response, are ignored in preference for a one-size-fits all solution. The market, as we explain in more detail in our response to Ofcom’s MIA, is assaulted by a new entrant into the market unencumbered by the incremental development strategies which its competitors must employ.

80 BBC, ‘BBC Management’s assessment of the public value of its Local Video proposals’, June 2008, p. 41.

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6. The7B BBC’s proposals would undermine plurality by weakening and compromising other local voices 6.1. Partnerships are not conducive to healthy and diverse local media ecologies 6.1.1. RadioCentre believes that the proposal Local Video service would “undermine a 81 continuing plurality of local and regional media”F F, in direct contradiction of the BBC’s responsibilities under the ‘Representing the UK, its nations, regions and communities’ Purpose Remit. 6.1.2. Although the BBC has made a number of suggestions as to how the adverse effects of its proposed service could be minimised, each is based on an assumption that creating partnership creates new voices. In fact, bringing two or more existing voices together has quite the opposite effect. Collaboration between the BBC and other operators is against the interests of the market as a whole and this approach would damage the fundamental structure of local media markets. 6.1.3. As we suggest in our response to Ofcom’s Market Impact Assessment, the UK's local media markets are characterised by having multiple well-matched players operating across different platforms who each have their own news-gathering resource, such as local press and radio stations. These outlets compete strongly for access to news stories, users' time and local advertising revenue – competition which extends across platforms. The rivalry which this engenders is at the heart of what makes these markets successful. 6.1.4. Radio plays a significant role within this. Ofcom figures show that there is an average choice of 5.1 local Commercial Radio stations per person in England, 82 3.5 in Scotland, 2.5 in Wales and 2.1 in Northern IrelandF F – with Ofcom stating that the figure is higher in England because the population is more condensed and stations covering different towns tend to overlap. Existing local media have also faced new competition in recent years from over 100 Community Radio 83 stations licensed across the UK, spread across all four nationsF F. In some areas, such as Northern Ireland, the number of new stations available is as high as 8.5 84 per million peopleF F. This licensing programme is ongoing. 6.1.5. It is quite likely that individual local media outlets would welcome an exclusive offer from the BBC to access its content or collaborate on various activities. However we believe that this should be seen in the context of competitive markets in which individual content providers have strong incentives to seek ways to distinguish themselves from other operators. We do not believe that a universal offer of this kind would be in the interests of the market as a whole. 6.1.6. This is because if every local media outlet had equal access to the partnership opportunity in question and chose to take up this opportunity, it would reduce the distinctiveness of each individual offering and so undermine the level of diversity available to consumers. Conversely, if local content provider A chose to accept the BBC’s offer but provider B did not, the market impact of the new BBC activity would be exacerbated by its effect in strengthening provider A. 6.1.7. It is worth noting that some work has already been undertaken on the likely impact of the BBC working more closely with other operators in local markets. Reviewing the BBC’s local TV plans in 2005, Spectrum Strategy Consultants found that “if the BBC were to pursue an approach in combination with existing

81 BBC, ‘Purpose Remit: Representing the UK, its nations, regions and communities’, p. 7. 82 Ofcom, ‘The Communications Market Report: Nations and Regions, May 2008, p. 129. 83 Ofcom, ‘The Communications Market Report: Nations and Regions – English Regions’, May 2008, p. 67. 84 Ofcom, ‘The Communications Market Report: Nations and Regions – Radio Charts’, May 2008, http://www1.bsc.org.uk/research/cm/cmrnr08/radio/.

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local operators this would further reduce the viability of services provided by 85 new local service operators”F F. They added, “any alliances formed between the BBC and local newspapers (or similar) will compound the economic challenges 86 faced by non-BBC organisations”F F. 6.1.8. We discuss the likely impact of the BBC’s various partnership suggestions in greater detail in our response to Ofcom’s Market Impact Assessment. 6.1.9. In general, given that the BBC already has a presence in local markets via its English Local Radio stations and existing web presence, and given that the partnership ideas suggested by the BBC would not increase plurality as the BBC claims, we believe there are only two possible effects on plurality of its proposed new service. The first would be maintenance of the status quo, with the BBC remaining present alongside other local voices. The second is a reduction in the overall number of voices. 6.1.10. We submit that, just as the BBC’s proposal would undermine the net delivery of public value by other local media, so would undermine plurality through its impact on the market.

85 Spectrum Strategy Consultants, ‘The economics of delivering local digital audio-visual and interactive services’, November 2005, p. 7. 86 Spectrum Strategy Consultants, ‘The economics of delivering local digital audio-visual and interactive services’, November 2005, p. 7.

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7. Responses8B to the consultation questions 7.1. Question 1. How important is it that the BBC improves its depth and breadth of local news coverage? 7.1.1. It is not necessary for the BBC to enhance its local news coverage, given the high levels of public value delivered by Commercial Radio and other local media. The BBC’s impression that it needs to increase the amount of local news and information it provides appears to be linked to a misunderstanding of its role in local markets and a misinterpretation of at least one of the performance gaps highlighted by the BBC Trust.

7.2. Question 2. Are the proposals outlined here an effective way for the BBC to improve its coverage of local news and events? 7.2.1. They may be partially effective, although such an improvement would be at the expense of other players, such as Commercial Radio stations, and therefore at the expense of net public value. This question implies that the BBC needs to improve its coverage of local news and events; we do not agree that it does.

7.3. Question 3. The BBC’s role is defined in the Royal Charter by six ‘Public Purposes’. BBC local video proposals aim to support the following two Public Purposes: Representing the UK's nations regions and communities; and Sustaining citizenship and civil society. To what extent do you believe the service, as outlined, will contribute to these Public Purposes? 7.3.1. We can identify the link between this proposal and the Public Purposes. However, we firmly disagree that the new requirement for the BBC to ‘Cater for 87 the different nations, regions and communities of the UK’F F which was added to the ‘Representing the UK's nations regions and communities’ Purpose Remit in December 2007, gives the BBC scope to expand its existing role. This is because the BBC is also required to complement other local content provision and avoid undermining plurality.

7.4. Question 4. How different is the proposal from other internet local news services, which offer video content? 7.4.1. The proposal is distinguished from other internet local news services by virtue of the BBC’s ability to invest in nascent markets ahead of commercial operators. However, we believe that there is strong evidence to suggest that the online local news market is growing fast and has strong potential to deliver high value to UK consumers, given that the market is currently succeeding in meeting expectations with regard to local content.

7.5. Question 5. What role should the BBC take in the development of local video news? 7.5.1. We believe that the BBC’s online role should be an enhancement and extension its on-air role. Therefore we believe that its English local websites should focus on those aged 50+, whilst its services for Wales, Scotland and Northern Ireland should serve the audiences for the BBC’s relevant radio services.

87 BBC Trust, ‘Finalising Purpose Remits: An Explanatory Note’, December 2007, p. 11, http://www.bbc.co.uk/bbctrust/assets/files/pdf/consult/purpose_remits/explanatory_note.pdf

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7.5.2. We do not believe that it should take a leading role in the development of local video news, in light of the risks of market foreclosure.

7.6. Question 8. The service as outlined would be available only to those with a broadband internet connection. Is this the best way for local news to reach you and your community? 7.6.1. Whilst this question is targeted at licence fee payers rather than third party stakeholders, we believe that the internet is a poor way for the BBC to reach the audience which it is charged with serving under its existing Local Radio obligations.

7.7. Question 9. The service, if approved, will cost approximately £23 million per year at maturity. As a very approximate guide, BBC News Channel (formerly News 24) costs £42.9 million a year whilst BBC Radio Scotland costs £22.6 million.* To what extent do you think local video represents a good use of the licence fee, both generally and compared with other possible areas for investment? 7.7.1. Local Video is unnecessary, since it is not required to deliver the BBC’s Public Purposes, fails to complement existing delivery, fails to add to net delivery of public value to local audiences and would undermine plurality by weakening and compromising other local voices. This suggests that the £23m annual investment represents poor value for money. 7.7.2. Furthermore, analysis of the revenue earned by GCap’s local websites per 88 unique user suggests that BBC Local Video has a commercial potential of []F F. This suggests that online local video services will become commercially viable for organisations with an existing newsgathering presence in local markets as broadband take-up increases over the coming years. 7.7.3. The lack of a necessity for the BBC to develop such a service is further supported by data from the BBC’s own BMRB research, which found that support for the proposal is not overwhelming. Less than half (45%) of adults agreed that the licence fee should be used to support the service with 20% actively 89 disagreeingF F. 7.7.4. On a related note, we are surprised to learn that the funding for BBC Local Video is already available within the existing Nations and Regions budget. It is unclear why the BBC already has this extra £23m available and what will be done with it if this service is not approved. Our concern is heightened by the absence of a proper breakdown by locality and cost area of the Local Video budget. This lack of transparency makes it more difficult to assess the value for money generated by the BBC’s proposal. 7.7.5. Going forward, we urge the BBC Trust to take a comparative approach to measuring value for money, by benchmarking the cost of BBC services against equivalent services provided by non-BBC operators. The Trust appears to rate bbc.co.uk as offering good value for money on the basis that it is the BBC's fourth most widely used service despite accounting for only 3% of the licence 90 feeF F. We believe that this is an inappropriate metric for the Trust to use, since it implies that services on different platforms have comparable associated fixed costs.

88 Source: GCap Media. 89 British Market Research Bureau, ‘Independent Quantitative Research to feed into the Market Impact Assessment of the BBC Local Video Service’, March 2008, p. 21. 90 BBC Trust, ‘Service Review: bbc.co.uk’, May 2008, p. 25.

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RadioCentre, August 2008 RadioCentre 77 Shaftesbury Avenue, London W1D 5DU t: +44 (0) 20 7306 2603 f: +44 (0) 20 7306 2505 www.radiocentre.org

Appendix 1: Performance of Commercial Radio in Scotland, Northern Ireland, Wales (data from Action Stations!, RadioCentre 2008)

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Appendix 2: Performance of Commercial Radio in local communities across the UK (data from The Big Listen, RadioCentre 2007)

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Scottish Daily Newspaper Society

Dear Sirs

I write on behalf of the Scottish Daily Newspaper Society (SDNS) representing seven major groups publishing Scottish national and regional titles plus Scottish editions of UK national newspapers. They are Aberdeen Journals, DC Thomson & Co Ltd, Newsquest (Herald & Times) Ltd, Scottish Daily Record & Sunday Mail Ltd, The Scotsman Publications Ltd, Associated Newspapers and News International Newspapers (Scotland) Ltd. Their 18 titles account for aggregate weekly sales of 10 million in Scotland. In addition our member titles deliver over 5.1 million online unique users each month not including the Scottish editions of UK national newspapers for which we do not have separate figures.

The BBC Trust’s public value test needs to be considered against the backdrop of downward trends in circulation and advertising revenues. We are seeing the migration of advertising to the internet in a substantial way and it is vital that the regional and local press should be able to capture the growth coming from this source without a non-commercial competitor reducing their all important audience reach if they are to have the resources to continue to provide a full range of services to the communities they serve. The advertising forecast from Zenith Optimedia in June 2008 said that economic uncertainty in developed markets in Western Europe was accelerating a shift of budgets to accountable internet advertising.

We therefore have to question how the BBC management’s proposal would deliver public value with minimum adverse impact on local newspapers and other media services.

An examination of websites offered by newspapers and other commercial operators will show that local online news including local video content is fully met by the private sector. It begs the question as to why the BBC should be using its privileged position of public funding to duplicate services already provided by the newspaper publishing industry and others operating in a commercial environment to generate revenues based on audience reach.

As the BBC Trust itself has recognised, there is nothing distinctive about the BBC’s online news offering. It is in reality the strength of the BBC brand which attracts users.

It is extremely difficult to see how the cost of employing 36 video journalists in Scotland – 6 in each of 6 regions can be justified. It certainly would not be considered cost effective in the private sector.

There is a further concern that the enormous advantage of the BBC to cross promote its online news services via radio and television would seriously distort the market by attracting users from the websites of regional and local newspapers with consequential damaging effects.

In summary we are deeply concerned about the potential adverse impact on regional and local newspapers, an impact not outweighed in our opinion by any value for money to licence fee payers or society as a whole.

Yours faithfully

Jim Raeburn Director Scottish Daily Newspaper Society

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Scottish Screen

Scottish Screen’s Response to the BBC Trust’s Consultation on the BBC’s Local Video Service Proposals

Background

Scottish Screen is the national government-backed agency responsible for developing all aspects of screen industry and culture across Scotland, focusing on the following five priority objectives:

1. Education – to ensure that people of all ages and backgrounds are inspired and equipped to analyse, appreciate, explore, create and share screen media; 2. Enterprise and Skills - to ensure that there are appropriate levels of skilled individuals and viable companies to sustain all aspects of the screen industries across Scotland; 3. Inward Investment - to promote Scotland as a dynamic, competitive and successful screen production hub; 4. Market Development - to ensure that the widest range of screen product reaches and is appreciated by a diversity of audiences; 5. Talent and Creativity - to identify nurture, develop, support and progress Scotland’s screen talent and screen production companies.

Scottish Screen welcomes this opportunity to comment upon the BBC’s Local Video Service proposals. Our response is focused on those aspects of the proposals and those consultation questions which we view as most relevant to Scotland’s screen industry and culture. While we broadly welcome the BBC’s proposals, there are a number of concerns, which are discussed below.

Question 1. How important is it that the BBC improves its depth and breadth of local news coverage? The need for the BBC to improve its depth and breadth of local news coverage is particularly acute in Scotland. As the BBC Trust’s description of the proposed service makes clear, BBC local radio coverage in Scotland does not provide the same breadth and depth as 91 the service offered in England.F F Lacking this network of BBC local radio provision, Scotland will therefore be starting from a position of catch-up if it is to achieve the same quality of local service to that provided south of the border.

We trust that the BBC’s investment plans will ensure that funding provision – in local journalism, for example – will be sufficient to address this deficit.

Question 2. Are the proposals outlined here an effective way for the BBC to improve its coverage of local news and events?

91 BBC Trust, Local Video Public Value Test – Description of Service, June 2008, p. 12, on the BBC Trust website at http://www.bbc.co.uk/bbctrust/assets/files/pdf/consult/local_video_service_des.pdfH H .

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It is difficult to be precise about the pace and path of convergence. However, the way in which citizens consume news is undoubtedly changing, particularly among younger age groups, and it is certainly appropriate for the BBC to make a proportionate response to these changes.

The BBC brand and its reputation for excellence in journalism are strengths which should enhance the BBC’s ability to provide a distinctive local video service offering. Maintaining the BBC’s quality across these new services will be key to success.

The need for proportionality of response is significant. The proposed services are welcome but should be viewed in the overall context of the urgent task of addressing the current deficiencies of the BBC’s broadcast television services in Scotland (see our response to Question 3 below). As we stated in our response to Ofcom’s Second Public Service Broadcasting (PSB) Review, concerning the way that other (non-PSB) digital channels and 92 interactive media contribute towards the public purposesF F:

“We agree with Ofcom that the contribution of non-PSB channels to public purposes remains very limited, particularly with respect to UK origination and genre diversity.

The growth of the internet and interactive media in providing content which delivers public purposes is a significant development, but is primarily complementary to PSB television and unlikely to provide a feasible substitute for PSB in the foreseeable future.”

Question 3. The BBC’s role is defined in the Royal Charter by six ‘public purposes’. BBC local video proposals aim to support the following two public purposes:

Representing the UK's nations regions and communities Portray and celebrate local communities, cater to their needs, stimulate debate on local issues and bring people together for a shared experience. Sustaining citizenship and civil society Provide independent journalism of a high quality, engage a wide audience in news and current affairs and encourage debate on these subjects.

To what extent do you believe the service, as outlined, will contribute to these public purposes? 93 While Scotland is indeed a ‘nation of regions’F F, it is also true that the UK is a kingdom of nations. The main conclusions of the interim reports of the Scottish Broadcasting 94 CommissionF F make it clear that the BBC (and the other PSBs) are failing to recognise the

92 Scottish Screen’s Response to Ofcom’s Second Public Service Broadcasting Review - Phase One: The Digital Opportunity, p. 4, June 2008, on the Ofcom website at http://www.ofcom.org.uk/consult/H condocs/psb2_1/responses/ss.pdf H . 93 BBC Management’s assessment of the public value of its Local Video proposals, 2008, p. 24, on the BBC

Trust website at http://www.bbc.co.uk/bbctrust/assets/filesH /pdf/consult/local_video_mgmt_pva.pdf H . 94 See Scottish Broadcasting Commission, Interim Report on Cultural Phase, March 2008, pp.2-4, at http://www.scottishbroadcastingcommission.gov.uk/Resource/Doc/4/0000359.pdf ; Scottish Broadcasting Commission, Interim Report on Economic Phase, January 2008, pp.1-3, at http://www.scottishbroadcastingcommission.gov.uk/Resource/Doc/4/0000314.pdf ; and Scottish Broadcasting

251 realities of a devolved Scotland, while the BBC Trust itself notes in its Summary of the King 95 Report that:F F

“…two gaps were identified in relation to the two Public Purposes Representing the UK, its nations regions and communities, and Sustaining citizenship and civil society in the Charter:

• in relation to the first, audiences in the different UK nations believed that the BBC could do better in catering for their own communities, and in representing their area to other parts of the UK. The Trust said at the time that "the priority to represent the different nations, regions and communities to the rest of the UK is one where licence fee payers across the UK see room for improvement";

• in relation to the second, one of the priorities is helping audiences to understand how the UK is governed. Research showed that in Scotland, Northern Ireland and Wales audiences believed the BBC could do better in helping them understand how their nation was politically governed. The Trust noted that there was a clear interest amongst audiences in the nations for news provision which reflects the changing realities in the United Kingdom as devolution unfolds.”

So while Scottish Screen broadly supports the BBC’s Local Video Service proposals, we would also stress that these should not divert attention or funding from the major changes which the Trust itself accepts are needed for the BBC to adequately fulfil its role as the leading PSB provider to a devolved Scotland.

Question 4. How different is the proposal from other internet local news services, which offer video content? Although we have not conducted a comparative review of internet local news services with video content in Scotland, we are content that the BBC is capable of providing a distinctive, quality offering which is not currently replicated.

Question 5. What role should the BBC take in the development of local video news? The BBC’s role in the development of local video news should be to act as a catalyst for change and expansion of Scotland’s screen culture and industries, ‘crowding in’ rather than ‘crowding out’ investment. We therefore welcome proposals to work in partnership, such as the intention to share content with other local news websites and local TV channels, for 96 free.F F We would also wish to see measures to ensure that the independent sector in Scotland is also involved in content creation.

Commission, Interim Report on Democratic Phase, May 2008, at http://www.scottishbroadcastingcommission.gov.uk/Resource/Doc/4/0000393.pdf . 95 BBC Trust, The BBC Trust Impartiality Report: BBC NETWORK NEWS AND CURRENT AFFAIRS COVERAGE OF THE FOUR UK NATIONS, p. 5, June 2008, at http://www.bbc.co.uk/bbctrust/assets/files/pdf/review_report_research/impartiality/uk_nations_impartiality.pdf . 96 BBC Management’s assessment of the public value of its Local Video proposals, 2008, p. 62, on the BBC

Trust website at http://www.bbc.co.uk/bbctrust/assets/filesH /pdf/consult/local_video_mgmt_pva.pdf H .

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Scottish Screen itself would welcome the opportunity to expand our current partnership work with the BBC in Scotland, for example on employment and training opportunities and also on Media Literacy aspects, such as help in making Viewer Videos.

Question 6. What effect, if any, would the proposal have on your interest in, and consumption of, local news? N/A

Question 7. In which ways, if any, would the proposal benefit (1) you and your family, (2) your local community, (3) your local area? N/A

Question 8. The service as outlined would be available only to those with a broadband internet connection. Is this the best way for local news to reach you and your community? The geography and population distribution of Scotland means that – in the absence of specific remedial intervention - the issue of high speed broadband availability is likely to become increasingly problematic in areas which are distant from the main population centres. While outside the scope of this consultation, the likelihood or not of such interventions, and their scale, is relevant to how the BBC would implement its local video service proposals in Scotland.

We agree with Human Capital’s assessment that Ofcom’s unwillingness to earmark spectrum access (among other factors) is likely to pose a major problem to the development 97 of local TVF F.

* these are not services directly comparable with the proposal (of 65 Local Video services across the UK) and are not calculated on a like-for-like basis. We agree that it is impossible to make like-for-like comparisons, so fail to understand the relevance of raising the cost of BBC Radio Scotland in this question. This is no more relevant to the assessment of whether local video represents a good use of the licence fee than quoting the cost of the annual salaries and bonuses of BBC Management, or the running costs of the BBC’s premises in London, or the cost of the BBC local radio services which do not currently exist in Scotland.

Question 10. Are there any other issues regarding the public value assessment of local video proposals you would like the Trust to consider?

97 Human Capital, An Independent Preliminary Assessment of the Market Impact of the BBC’s Local Video Proposals, April 2008, p.12, on the BBC Trust website at

http://www.bbc.co.uk/bbctrust/assets/files/pdf/consult/local_video_prelim.pdfH H .

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We failed to note any specific mention of Gaelic (unlike Welsh language) local content in the proposals and wondered if any consideration had been given to its possible inclusion.

MK/KH 7 Human Capital, An Independent Preliminary Assessment of the Market Impact of the BBC’s Local Video Proposals, April

2008, p.12, on the BBC Trust website at http://www.bbc.co.uk/H bbctrust/assets/files/pdf/consult/local_video_prelim.pdf H .

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Voice of the Listener and the Viewer

THE BBC’S PROPOSALS FOR A LOCAL VIDEO SERVICE

A Submission to the BBC Trust and Ofcom by Voice of the Listener & Viewer (VLV) August 2008

Introduction 1. The application by BBC Management to the BBC Trust for permission to establish a Local Video Service represents the results of a lengthy period of consultation and development by BBC Management, following the interest which has consistently been reported in audience research surveys that a substantial minority of listeners and viewers want to be more informed about local events.

2. In general terms, the proposal can be said to fulfil at least three of the BBC’s Public Purposes, namely those of • Sustaining citizenship and civil society • Representing the UK, its nations, regions and communities, and • … helping to deliver to the public the benefit of emerging communications technologies and services …

3. The central issue for VLV, and we imagine for the BBC Trust, is the role that the new proposal will play in enhancing and improving the BBC’s Public Purposes.

4. At the same time, no matter how valuable the new BBC service may be, listeners and viewers will also want to preserve a choice in the local media that are available to them, and to this extent they will wish to be assured that the BBC’s new proposals do not have a significantly adverse impact on the markets for alternative local media. At a time of projected economic downturn, it will be especially difficult for the BBC Trust to balance these conflicting demands.

Choice of Medium 5. It is clear from the pilot study that the original intention of BBC Management was to establish a service involving both local television and local video. But the proposal to include local television in the offer has now been dropped. The reasons for this are not entirely clear, but it would appear that satellite viewers complained about poor updates and unduly extended weather reports. Moreover, in his report on the Pilot Project in the West Midlands, Professor Laughton concluded that in the original proposal for linear television, even though news bulletins were scheduled to be broadcast at fixed times, they were unlikely to be live, which has traditionally been a key characteristic of current news services. This finding, linked to the fact that the cost per hour of the content and delivery service of the pilot service was more expensive than anticipated, would appear to indicate hat the BBC Management has insufficient resources to roll-out a local television service.

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6. On the other hand, Professor Laughton concluded that BBC Management had been correct to identify the BBC’s local radio areas, - which are already the base for online services - as the organisational and editorial spine of future multi-media content delivery.

7. It appears therefore that the BBC Management now proposes to establish a local video service, which will be available on broadband and mobile, but which will only be updated on an intermittent basis.

According to BBC Management, its proposal will only deliver in each local area “on average up to 10 new local video stories” “adding up to no more than an average of 20 minutes per day, with an additional offer of up to three short daily bulletins for each of news, weather and sport.” This would seem to offer users no more than a total of half an hour’s programming each day.

Cross-Media Synergies 8. On the other hand, the new service will be using the BBC’s local radio areas to commission and edit the online programmes. VLV is therefore surprised that the BBC Management has not sought to establish stronger editorial and public-oriented synergies between its established local radio services and its proposed local video services, possibly going so far as to establish a combined local radio and video service. As Professor Laughton noted, one of the potential benefits behind the original pilot for a local television service was that of “breaking down the barriers between existing media platforms, placing the emphasis of gathering original multi-media content.” Even though the proposal for a local television service has now been dropped, this benefit could also have been extended to its local radio service. After all, the BBC’s national radio service frequently uses the soundtrack of video- recorded interviews, which are also broadcast, indeed sometimes subsequently broadcast, on its national television service. Moreover, as Professor Laughton also noted, “the provision of additional news-gathering capacity in areas where there is often a monopoly news gatekeeper is another public good.”

Extending Public Access to Local Services 9. The primary function of the BBC Trust, as it asserted in its 2005 Public Consultation Briefing, is to act in the Licence Fee Payers’ interests, yet BBC Management is now proposing to establish a service which will only be available to those licence fee payers who are also paying for a broadband connection to the Internet. According to BBC Management, although the projected weekly reach of the new service, in 2012/2013 when it will attain “steady state”, will reach 17% of broadband households, it will only reach11 per cent. of all UK households. VLV would therefore urge the BBC Trust to ensure that as many listeners and viewers as possible will be able to enjoy the benefits of the proposed local services. Given the editorial and financial limitations on its putative local television service, one way in which the BBC could achieve this would be to ensure that the proposed Local Video Service was an adjunct to a nationwide Local Radio Service. This would ensure that:

• As many UK citizens as possible would have access to the new local services whether on radio or via broadband; • Citizens living in rural areas, who are currently unable to receive local radio services, would have broadband access to local video (and maybe local radio) services;

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• Citizens living in one local area would have broadband access to BBC local video (and possibly local radio) services from another local area in which they may have a personal or social interest; • The BBC could develop financial and editorial synergies between local radio services and local video services, which were specifically designed to sustain local citizenship and civil society. These might include live news broadcasts and complementary online video packages; interviews with local politicians or political activists which could be broadcast live, but also be made available as a local video story; and live radio commentaries of local sporting events, which were subsequently edited for an on-line video package; • It would also be possible for the BBC to develop synergies in developing user- generated content, between community video packages and live broadcast telephone interviews, although we shall return in more detail to the issue of user-generated content below.

Sustaining Citizenship and Civil Society 10. The principal public purpose of the BBC is that of sustaining citizenship and civil society, and VLV hopes that the BBC Trust will require BBC Management to establish a more focused rationale for its proposed new service than that which has been developed so far.

In order to do so, the Trust will need to require BBC Management to articulate a far clearer distinction at the local level between the programme needs of the citizen and of civil society, and those of the average consumer. BBC Management will therefore need to demonstrate precisely how the local needs of citizens, and the local dimensions of civil society, will be sustained and enhanced by its proposed new service. News, weather and sport were certainly popular in the pilot project, but precisely how will they enhance citizenship? In VLV’s view, it is insufficient for BBC Management simply to say that it will deliver an average of up to 10 video stories per day augmented with a few news stories and weather forecasts. These may be interesting, and indeed popular, but there is no guarantee that they will assist in sustaining citizenship or civil society.

11. Moreover, is notable that new technological developments are hastening the advent of new local services, and if the BBC is to develop genuine public value in the provision of local services, BBC Management may well need to up its game. According to a recent estimate by Ofcom, local and devolved government in the UK is already spending £45-55 million per annum on on-line public content; and following the success of Kent TV, the Local Government Chronicle reports that four or five other local authorities are now planning to set up television stations in order to pioneer new methods of communication. (24 July 2008). Local newspapers and commercial radio stations also have plans to develop on-line activities. If the BBC’s local services are to command respect among the public they must establish their presence, and the contribution that they make to citizens’ lives, more forcefully. VLV considers that it was significant that when Professor Laughton sought to interview 60 local MP’s and 12 Members of the Regional Advisory Council during the West Midlands Pilot Project for the new service, the results were, in his words, “underwhelming”. It is essential that when the BBC does offer licence payers a new local service, it is one that has been specifically designed to ensure that the BBC can genuinely attempt to build public value, and

257 not one which merely ticks a number of public purpose boxes, as the current proposal claims to do.

12. Central to a new definition of local citizenship is how the BBC intends to report both local elections and the activities of the local councils, be they metropolitan authorities, county councils, district councils or city councils. The BBC’s traditional editorial values of accuracy, balance and due impartiality may well need to be revised and improved for local services where the BBC may be in competition with a service run by the public relations department of the local council, and where BBC reporters are frequently in close social and personal content with the public relations officers of both public bodies and local community or faith groups. Moreover, local politics is often radically different to national politics. The dominant local party may be opposed to the politics of the government which is in power in Westminster. Indeed, in some localities, the Westminster government may have no elected political representatives. Precisely how, therefore, should BBC editorial policy exercise balance and due impartiality in these localities? Furthermore, in some local areas, fringe political parties which have little or no representation at Westminster can, and do, play an important role in local politics. At election time, the views of candidates from “fringe” parties, such as the Green Party or the BNP, are often virtually ignored by national services. Should the same rules apply to the coverage of local services? Precisely how should the BBC report the activities of fringe groups in order to “sustain citizenship” or to “sustain civil society”?

13. In other parts of the country, the division of powers between different public authorities may also require the BBC to implement a degree of “out-of-area” coverage, when for instance national planning decisions, the decisions of a primary care trust, or the highways decisions of a county council, can affect the lives of citizens who live in a small town. How, precisely, do the BBC’s local editors plan to achieve a balance in reporting the views of national governments, or of county councils, when they are at odds with those of the dominant political party in the local authority? .

14. Similar issues arise around the role that BBC Local Services should play in sustaining “civil society”. The BBC Trust has already identified significant performance gaps in relation to two key indicators.

These are (a) whether the BBC helps citizens to feel more involved in their local community [-21%]; and (b) whether the citizens feel that the BBC cares for their local community [-14%]. If BBC Local Radio has been unable to fill these gaps, precisely how will the proposed new Local Video Service manage to do so? Merely by establishing an online video service that will only reach 11% of households? Regrettably, the BBC Management’s proposals simply assert, rather than analyse carefully, how the proposed new video service will help to close these gaps. How will half an hour a day of local video significantly change people’s perceptions of whether the BBC helps citizens to feel more involved in their local community,? How will half an hour a day of local video convince people that the BBC actually cares for their local community?

User-Generated Content 15. The proposed local video service intends to include up to 25% of ‘user-generated content.’ This may well be a valuable development, although the precise meaning of the term

258 is slippery, and varies between different media. In broadcasting it normally means audio or video programmes which have been prepared by local community groups, whereas online it may mean nothing more than a digital photograph accompanied by a written text. The BBC Management’s proposal does not really explore the meaning of the term, although the proposal raises important editorial issues. In fact, to be precise, user-generated content is content which is generated by one user of a video service in order that it can be watched by another user of that service.

16. In establishing an editorial policy for any local service, the BBC has a series of difficult bridges to build, not only between itself and local community and faith groups, but also between itself and its listeners and viewers who are probably not members of those local groups. In order to fulfil both of the Trust’s key indicators related to local services, the BBC will therefore need to ensure that its user-generated material will actually inform and educate its listeners and viewers in a manner which designed to sustain citizenship. There is little evidence in the BBC Management’s proposals that these issues have been properly thought through.

17. There are several interlocking issues here. The first is for BBC Management to explain to the Trust how it will enable viewers and listeners to distinguish between genuine user- generated content and BBC-managed user-generated content. This is not simply a question of the BBC eliminating illegal material, such as obscenities or defamatory material, or of ensuring that there is no abuse of another person’s copyright. There are more profound issues about who is the “author” of this allegedly user-generated content. There is already substantial ambiguity. As Professor Laughton noted, in the case of Rural Media in Hereford, “a single supplier was sub-contracted to provide community items.” Who, then, was the “author” of these items? More often, as Professor Laughton also noted, “young BBC producers worked with individuals and organisations to help them get their message to viewers” Were viewers expected to regard these programmes as BBC programmes or as user-generated programmes? Or were they simply expected to accept them as parts of a seamless local BBC service? When they were broadcast, an appropriate statement by an announcer could probably clarify the issue, but how would an online service resolve these ambiguities?

18. On the other side of the coin, as BBC finance becomes more restricted, astute public relations officers for commercial organisations, or for nationally-based pressure groups, may seek to support the work of local community or faith groups by persuading them to become involved in surreptitious advertising, or product placement, or by providing them with nationally-generated video releases, into which their local activists could edit a few local inserts. Will BBC Management be able to guarantee to the BBC Trust that it has put adequate procedures in place at the local level, in order to avoid these editorial pitfalls? How will it ensure that ‘user-generated material’ which is included in its online services is not fulfilling some other public relations function?

Page 5 Capturing the Attention of Younger Viewers 19. VLV recognises that one way in which BBC Management could reduce its performance gaps in relation to local services is by capturing the attention of younger viewers. It is often asserted that younger viewers prefer to obtain their news on-line, rather than from their

259 television set, whereas older viewers prefer to use a more traditional medium. Certainly many younger people naturally turn to the newer medium. Moreover, a broadband service has the additional advantage that it can normally be watched at a time when the user chooses, rather than at the time when it is broadcast. It can also be watched by people living outside the local area who have a personal or social interest in the locality. On the other hand an online service, especially one which is downloaded onto a mobile phone, can also be expensive to use. In a period of economic downturn, the additional cost may therefore inhibit online use, even by younger users.

20. A second characteristic of on-line use, however, is that evidence shows that people tend only to watch those parts of the on-line offer that specifically interest them. This tendency may well be enhanced if the online service is expensive to use. It also means that there is no guarantee that users will watch those parts of the proposed local video service which are designed to sustain local citizenship or local civil society.

Balancing Public Purpose against Online Availability 21. VLV does not wish to argue that the BBC should not establish on-line local services, which can primarily be used by younger viewers, but in its proposal BBC Management fails to address precisely how these local services will be delivered to older viewers who prefer traditional broadcast media, or to those households which are not connected to broadband. Nor does it indicate how much the local video service will cost younger viewers to use, or how it will ensure that those users who do use it will watch the whole range of its output.

22. More seriously, the range of video programmes which BBC Management proposes to offer viewers seems implicitly designed to attract younger consumers, rather than younger citizens. VLV recognises that the BBC’s local output needs to be available to everybody, both young and old, but it is concerned that in its efforts to attract younger audiences BBC Management appears to be relegating the BBC’s primary public purpose of sustaining citizenship and civil society to a lower level than is desirable. While local news, weather and sport may well be popular, there is no guarantee that these programmes will sustain citizenship or civil society. Nor is there any promise that user-generated content will address citizenship or civil society issues.

23. There is also a danger that, in its attempts to reach younger audiences, BBC Management may be developing a local video service that will have an adverse market impact on its commercial rivals, although from the evidence considered by Human Capital and others, that impact would appear to be less than its potential rivals fear.

24. What would be serious, however, is that if BBC Management simply proposes to deploy populist programming in an attempt to capture a substantial audience share for its on-line local services, the BBC could effectively eliminate the opportunity for listeners and viewers to have access to local services which were designed to sustain citizenship and civil society at a local level, however these were delivered. Local commercial services are not in the business of sustaining citizenship and civil society, whereas the BBC should be.

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Conclusion 25. Thus while VLV welcomes the BBC’s initiative in developing a series of local services which would be available via broadband video, it would urge the BBC Trust to ask BBC Management to develop a local service which:

• Is available to all listeners to local radio services, as well as to broadband households; • Is designed to establish complementarities and synergies between these two media services; • Clarifies and focuses its public purpose in seeking online users; • Rejects populist editorial policies which merely aim to capture large audiences at the expense of its commercial rivals; • Includes editorial policies which are specifically designed to sustain citizenship and civil society at the local level; • Enables listeners and viewers to distinguish clearly between BBC-produced content and user-generated content; • Includes user-generated content which is prepared and edited to inform and educate listeners and viewers and designed to enable them to help sustain local citizenship and their local civil society, not merely to provide a platform for local community and faith groups; • Ensures that the bulk, if not all, of this sustaining material is made available to users of its local video service.

In short, VLV hopes that despite any financial difficulties, the BBC Trust will want to ensure that BBC Management will establish the Gold Standard for local media services which will sustain both citizenship and civil society at the local level for everybody. VLV is not convinced that BBC Management’s current proposals will achieve this aim.

August 2008

Voice of the Listener & Viewer (VLV) is an independent, non-profit-making association, free from political, commercial and sectarian affiliations, working for quality and diversity in British broadcasting. VLV represents the interests of listeners and viewers as citizens and consumers across the full range of broadcasting issues. VLV is concerned with the structures, regulation, funding and institutions that underpin the British broadcasting system. VLV does not handle complaints.

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