Could Local Media's Salvation Come Through A Sky+ Box?

If the future for regional media isn't local newspapers and it isn't local television stations, could it just turn out to be local television adverts sold through a national broadcaster?

It's a tricky one -- but Johnston Press is clearly willing to give it a go. In fact, it was very fitting that its plans to work with Sky AdSmart were released at the same time as it announced it was refinancing to the tune of more than GBP300m to cut its debt mountain. Shareholders are expected to back the GBP137m rights issue and the bond launch plans -- let's face it, there doesn't appear to be an alternative on offer other than defaulting -- but it says everything that needs to be said about the state of local print media in the UK. A rights issue not aimed at funding expansion but to cut debt is about as bleak a financial arrangement as you can imagine.

The one silver lining is the GBP5m Sky is investing in Johnston as part of the new working relationship that will see the local newspaper giant sell television slots to local businesses from June.

It may take a bit of pride swallowing to effectively turn itself into a sales house for Sky, but the deal actually appears to make perfect sense. 

Television advertising is coming down in price, with the huge increase in inventory provided by the multichannel world, but is still deemed too expensive for the average SME -- particularly one that is active in just one or more area. The ability to advertise within one region is already available at ITV, but Sky AdSmart goes a step further.

Adverts can be stored in a Sky+ HD box and then triggered to run during an advertising break within a geotargeted area and only to the target audience, based on data owned by Sky. 

It makes perfect sense for Johnston to use its contacts to tap into this and offer packages that include print, digital and now television to companies that have probably previously not realised they could advertise within a definable area without breaking the bank.

Apparently negotiations are ongoing with other local media companies, so one can only presume that Johnston Press is not the only company to see this new opportunity as a revenue lifeline.
As the decline in print goes on unabated in local media, could it just be that satellite television could hold the key to tiding over local media companies while they wait for digital to pick up the slack?

Clearly, hyperlocal television stations -- hyped beyond belief -- are not going to offer a viable, scalable solution for small advertisers to get into local television campaigns, so one would have to conclude the prospect looks positive, although it's unlikely to make more than a small dent in Johnston's GBP300m debt pile.

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