The television market in the Republic is enjoying record growth in ad revenues, at a time when the market is fragmenting like never before. Advertisers now have the choice of nearly 20 channels – four indigenous, the rest opt-outs – and more are on the way.
But the natural assumption that the cake will be sliced ever-more thinly is not happening.
Indeed, the cake seems to be getting bigger every day.
RTÉ is still the main player in the market, where about 80% of TV homes are multichannel.
It commands about 40% of the audience across its two channels.
Five years ago, the vast majority of TV households had access to a maximum of 15 channels, but now a third have digital television, giving them access to more than 200, depending on digital packages and suppliers.
A digital terrestrial TV pilot project is planned for the Dublin area for later this year, but so far, there is no indication of a switch-off date for analogue. There is no sign of a Freeview phenomenon just yet.
RTÉ spokeswoman Catriona Edwards says one of the main reasons the station has been able to maintain its audiences is increased investment in home-produced programmes, as a direct result of the rise in the licence fee.
"Out of the top-10 programmes for Irish audiences in 2004, eight were home produced," she says. "The five highest rated were all entertainment programmes and all were broadcast by RTÉ."
RTÉ has doubled the amount of home produced daytime material it broadcasts and has significantly increased its funding of home-produced drama over the past two years. It is also putting considerable resources into sports programming.
Another key element has been the rebranding of the second channel, Network 2, as RTÉ Two, with a new look, new presentation, improved content and better scheduling. The second phase of the rebranding was launched recently and commissioning for the next stage will start shortly, says Edwards.
As a result of these commitments to more home-produced and improved programming, RTÉ has raised its audience market share. Last year it was up 1.2% in multi-peak and 1% in national peak, compared with 2003.
RTÉ is broadcast on all platforms, including Sky, which now has about 350,000 subscribers in the Republic, all on digital. The two cable networks, Chorus and NTL Ireland, have been slower to convert to digital, although they are catching up and between them now have close to 150,000 digital subscribers.
In terms of new technology, the only personal video recorder system currently available is the Sky+ box, used in 10% of Sky subscribing homes in Ireland. Broadcasters such as RTÉ are studying the possible impact of this and other interactive technology, but it tends to be lower down their list of priorities.
RTÉ remains ‘robust'
RTÉ has also been doing well on the ad front.
Geraldine O'Leary, commercial director for TV services at the broadcaster, won't give figures, but insists that ad revenue has been robust so far this year.
Slot prices have also increased, up 13% in January and 22% in February. As Conor Hanover of Mediaworks, a Dublin planning and buying media agency, points out, television inflation is still very high. Even though he reckons it will fall later in the year, it will still be in double digits at the year end, he says.
The other big, indigenous station is TV3, which depends solely on advertising for revenue.
Pat Kiely, director of sales and marketing at TV3, says his channel is still the second most watched in Ireland, after RTÉ One.
"We've had some great programming successes, like Coronation Street and Emmerdale.
Our own programmes, like Ireland AM, are doing well. Ireland AM out performs everything else in the breakfast-time slot. Between 5.30pm and 6pm, with our home-produced news programme, we're the number-one channel."
According to Kiely, TV3 is performing strongly with housewives, in particular those with children—a key segment for advertisers.
He adds that the real value of television is now being realised, although it's still more difficult to attract males and younger viewers. Indeed, there is growing evidence in Ireland that many younger people are surfing the internet rather than watching television.
Wooing a younger audience
Mediaworks' Hanover agrees that getting young people to tune in is a big problem: "Getting younger audiences is an issue for all stations, particularly among 16 to 34-yearolds.
RTÉ has been losing kids' impact dramatically year on year, which has prompted it to deal off a fixed kids' cost-per-thousand."
In terms of advertising revenues, TV3 is achieving double-digit growth, similar to RTÉ and, while Kiely concedes it might slow down a little later in the year, it won't affect its overall buoyant performance for 2005.
One thing is for sure, as he explains:"The days of advertisers getting on television next week, without paying a significant premium, have gone."
While TV3 has gone from strength to strength, UTV has lost ground in the Republic, shrinking to an audience share of about 9%, primarily because it isn't on the Sky platform.
The obstacle to be overcome is rights issues.
However, Mark Deering, Sky's director in Ireland, says once these are resolved, they would be happy to have UTV on Sky. The other indigenous channel is TG4, which broadcasts more than seven hours of programming daily in Irish. It is investing more than G 15m a year in programming and has a reputation of being the most innovative of all the Irish channels. On any given day, about 800,000 people tune in.
TG4 is still part of RTÉ, which supplies an hour's programming free every day. Plans to turn it into a public corporation, separate from RTÉ, still show no sign of coming to fruition.
Opt-outs on the up
The other significant factor, from an advertising viewpoint, is the number of opt-out options. Sky does opt-outs for Irish advertising on Sky One, Sky News and Sky Sports 1 and 2, generating revenues of about G 20m a year. Sky is considering extending those options, perhaps to one of its movie, or other sports, channels.
Viacom started its Irish opt-outs just over a year ago and since then has taken in more than G 4m in ad revenue on MTV, Nickelodeon and TMS. Opt-outs will be available on its Paramount comedy channel from May and Viacom hasn't ruled out opt-outs on its 15 other channels.
Channel 4 and E4 are also busy selling airtime in Dublin, through the Medialink sales house. Conor Hanover of Mediaworks says two of the benefits of all these opt-outs is that they allow for more targeted campaigns and also reduce the entry cost to TV for advertisers.
Meanwhile, Sky and Viacom, together with UTV and C4, are considering setting up an audience measurement system that would work as an addition to the Nielsen system.
Other options are on the way. A group of investors led by David Harvey, a radio and TV entrepreneur in Dublin, has a licence to broadcast a new station, City Channel, on the NTL digital platformin Dublin. It is due to start this summer.
The Broadcasting Commission of Ireland has plans for many more localised TV services throughout the Republic, but these are far from materialising.
Six is another brand-new channel, promoted by Pat Donnelly, formerly head of the Aegis ad group in Dublin, and Michael Murphy, a former head of programming at TV3, who hope to start broadcasting in the autumn. Six will be an entertainment channel, pitched between Sky One and TV3 and aimed at 15 to 34-year-olds.
So it looks as though TV planners and buyers in Ireland will soon have more options for reaching consumers than ever before.
Bluffer's guide to the Irish TV market
? The largest channel in Ireland, RTÉ One, is broadcast by RTÉ, which is state owned. RTÉ handles its own ad sales.
? The second largest channel in Ireland after RTÉ One is TV3, a commercially owned service. It handles its own ad sales.
? TG4 is part of RTÉ, but its airtime sales are handled by TV Post, part of the Sunday Business Post, which is owned by the Cork-based Thomas Crosbie Holdings.
? Channel 4 and E4 airtime are sold through Medialink, a Dublin-based sales house.
? UTV uses ITV Sales in Ireland and the UK; Dublin generates about 25% of its ad revenues.
? Opt-outs on Sky and Viacom are sold locally in Dublin.