Ofcom Warns News Provision on Channel Three Will be Soon Financially Unviable

The broadcasting regulator, Ofcom, has warned that news provision on television's channel three could be financially unviable in just two years.

In its response to a Department of Culture, Media and Sport consultation, which closed yesterday, Ofcom suggests that STV, UTV and ITV would together have a shortfall of between £38 million and £64 million by 2012, as the costs of providing regional news grow (or at least remain high) while the number of viewers and advertising revenues decline.

Ofcom also published a report yesterday on local and regional media in the UK that offered further analysis on the proposed creation of so-called 'independent news consortia'. Scotland has been chosen to be home to one of three pilot programmes on channel three, beginning next year. The Government’s Digital Britain report – published earlier this year, looking at Britain's digital future – recommended that these consortia could be funded by 'top-slicing' the television licence fee, which currently goes exclusively to the BBC.

The regulator says new funding will be required if regional news on channel three is to be maintained. It suggests the new consortia, funded by competitive tender, could offer “valued choice of news, alongside the BBC, while providing a potential platform for the future development of more local services, including local TV, and using other media”.

STV has declared itself interested in running the Scottish pilot. On Friday, it emerged that also interested are newspaper publishers, Johnston Press (publisher of The Scotsman), Newsquest (publisher of The Herald) and DC Thomson (publisher of the Press & Journal), in association with an as yet unknown TV production outfit.

Currently, the channel three licencees are required to output a certain amount of news and current affairs in return for having the ability to broadcast as terrestrial (analogue) channels. But soon, the analogue signal is to be switched off, with all TV channels available only as a digital signal.

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