Magazine article Marketing

Fiasco Course for C5?

Magazine article Marketing

Fiasco Course for C5?

Article excerpt

Fiasco course for

The Independent Television Commission (ITC) has given would-be Channel 5 bidders carte blanche to run either a local or national programme format for the station - due to come on air in 1994.

Despite advertiser preference for a city-based service ITC deputy chief executive Peter Rogers claims the ITC is not empowered to favour local TV. The new rules, as outlined, favour bidders aiming to create a national service - but market conditions are likely to kill it as soon as it is born.

Indeed, with memories of Clive Sinclair's disastrous C5 still alive, C5 seems a particularly unfortunate brand name to be launched with. It is crazy to launch C5 as a national service when viewers will already have 36 channels on offer from satellite and terrestrial TV. And before they make any money, licencees must not only pass a quality threshold, win the cash bid, and pay start-up costs (which may include buying programmes), they must also re-tune the vast number of aerials and VCRs which will suffer reception distortion when C5 comes on line. That last element alone could cost around [pounds]25m. "C5 is not an instant goldmine," says Rogers.

Most depressing for advertisers, lowever, is the threat to their long-kindled hopes for a local TV service. The ITC's own statement says a "city element" would, in its view, add "valuable extra potential" to the service. But its inability to act seems likely to skew the odds away from local TV. "Legislation was in terms of a national licence. It didn't envisage a local opt-out," says Rogers.

Local TV implies many different cost centres, and specialist city-based services mean producing many different programmes rather than one. So costs are likely to be much higher, and set-up times longer.

While local TV may encourage local investors, consortiums aiming for city-based TV will still have to put cash upfront - enought to beat off the war chests of national bidders who know their operating costs will be lower. These may include Channel 3 losers and their cash-rich partners (who will have the added advantage of auction experience).

The station's franchise (or so the story goes) will be advertised later this year, awarded in mid-1993 and up and running in January 1994. It will cover 70% of the UK (though not the south coast) and it will be transmitted from a maximum of 32 sites.

Those 32 sites allow bidders to propose a regional or national set up, with any number of local optouts allowed. …

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