RXTV: Local TV operator That’s TV confirms Freeview channel renewal bid

Story from RXTV:

The UK’s largest operator of local TV services says it is applying to renew all of its licences allowing it to keep its channels on air this year. The bid comes despite warnings that the financial model underpinning how local TV is broadcast on Freeview is under threat.

Local TV and classic entertainment channel operator That’s Media has confirmed it intends to apply for a renewal of all 20 local TV licences held by the group.

That’s TV renewal bid follows a number of run-ins with Ofcom. Last month, the regulator found That’s TV in breach of its licence conditions for failing to provide mandatory information. Previously, an Ofcom investigation found the broadcaster failed to film any local news reports in some of the areas it holds a licence for.

As part of the licence renewal process, Ofcom will review each local channel’s compliance history alongside its financial position.

Ahead of Ofcom’s scrutiny of local TV applicant’s finances, That’s Media has posted figures confirming it doubled its operating profit in 2023 to £928.746, up from £473,170 a year earlier. Revenues were boosted by growth in its national TV business, which offers viewers a range of classic entertainment and music shows. National TV service That’s TV UK provides a shared schedule for its local channels, which opt-out for local news.

However, That’s Media warned that the current financial model that underpins how channels are broadcast on Freeview is “uncertain”.

As part of the introduction of local TV services on Freeview, each local channel became a shareholder in Comux, the digital terrestrial TV multiplex operator responsible for carrying local TV on Freeview. Comux makes money by making spare bandwidth available to third-party channels who want to broadcast on Freeview. This allows channels to broadcast alongside the local TV signal to around two-thirds of UK households. In turn, the money received by Comux is used to cover the cost of transmitting local channels on Freeview.

As reported by RXTV last month, Comux has recently seen a reduction of third-party linear channels it broadcasts. This follows the transition of some channels from terrestrial to hybrid streaming, leaving a chunk of the multiplex capacity unoccupied.

Until now, Comux’s profits have been sufficient to effectively reimburse local TV operators for their core Freeview transmission costs. However, That’s Media now says “it is uncertain how much longer this can continue”.

It’s warned that it expects to have to contribute to local TV transmission costs moving forward.

That’s a situation that could impact the last remaining small independent local TV channel operators, including Brighton’s Latest TV, Kent’s KMTV, Sheffield Live TV and Belfast’s NVTV. Already run on small budgets, the cost of having to contribute toward Freeview transmission costs will put further strain on the channels. As part of licence renewal, Ofcom will assess if applicants are financially able to continue broadcasting for the next decade.

Nottingham’s local operator, Notts TV, has already pulled out of the licence renewal process and will close this November. London’s standalone service ended in January, when London Live’s licence was handed to rival local TV chain Local TV Limited.

This could result in local TV dominated by just two players.

Under current legislation, local TV services are licenced to broadcast on Freeview until this November. Operators have until the end of this month to apply for a licence renewal, which will unlock an extension to their current licences by up to one year. Renewed licences will run until the end of 2034.