Lucy Rouse, Media Week, 10 June 2008, 00:00am

Ireland Television - Irish TV is well on its way to digital

While Ireland is in the early stages of creating digital terrestrial television, mobile broadband is already a reality for some. Media Week reports on the country's plans to hit the goal of analogue switch-off by 2012.

Ireland AM: one of TV3's mainstay programmes

In some ways, the television market in the Republic of Ireland is a microcosm of the British TV market 10 years ago - with some very 21st century additions.

So while the Government and regulators are in the early stages of creating digital terrestrial TV in Ireland, as Britain did back in 1997, mobile broadband is already a reality for some. A survey by mobile marketing agency Return2Sender suggested 20% of Irish consumers are regularly accessing the internet from a mobile device.

The Irish TV market is small compared to the UK - 1.4 million TV households compared to 23 million in Britain. But it is structurally similar to British TV and indeed channels from the BBC, ITV, Channel 4 and Five spill over to 15% of Irish homes. The big difference is that Irish public service broadcaster RTe, which operates market-leading channels RTe 1 and RTe 2, is funded by TV advertising as well as a licence fee.

RTe 1 is the leading channel with 25% of all TV viewing, while RTe 2 has about a 12% share. RTe's main competitor is TV3, which has 12% of viewing. Also present are TG4 with 3% of viewing, BBC1 with 6%, BBC2 with 3%, UTV with 5% and C4 with 4%. Multichannels account for 30% of viewing, with Sky 1 among the largest with a 2% share.

Digital expansion
Overall, digital satellite is expanding its share of the market. Analogue cable is being supplanted by digital, but cable TV's overall share is stable. Meanwhile, free-to-air TV is losing out to satellite, falling from 33% of the market in December 2005 to 25% two years later.

The RTe channels take the lion's share of TV advertising (57%), while TV3 takes about 20%. RTe estimates the TV advertising market was worth EUR245m in 2006.

Digital TV is already a reality for more than 58% of Irish TV households, which have either digital satellite (Sky) or digital cable (NTL) services. Ireland has traditionally had a high take-up of pay-TV services - three out of four homes have pay-TV and have been used to 10 or more channels for years. But digital terrestrial TV is yet to become a reality. RTe, regulator ComReg and the Broadcasting Commission for Ireland (BCI) are involved in setting up a DTT service and are working towards the EU goal of analogue switch-off by 2012.

Under the terms of a Government Act, which came into force in April last year, RTe will take charge of one DTT multiplex with TV3 and TG4. A further three DTT multiplexes will be awarded after a competitive process run by the BCI.

RTe's priority, according to its managing director of TV, Noel Curran, is to remain relevant to Irish audiences and ensure its content is available on all platforms, including DTT. RTe is broadcasting digital teletext and interactive services on a pilot DTT service. "The potential provided by these and other digital platforms such as internet TV and mobile TV means RTe can increase the range of content and services available to the audience," says Muirne Laffan, executive director of RTe Publishing.

But with no fixed date for a DTT launch, other broadcasters are focusing on more immediate concerns. Ben Frow, programming director of TV3, which airs shows such as Coronation Street, Rock Rivals and The Tudors, says: "I spend my days battling to find decent shows to fill the schedule."

He says UK broadcasters can buy up Irish rights, which limits what TV3 can get hold of. Also, the US writers' strike was bad news for TV3 - as for all channels that carry US imports - as it doesn't have huge budgets, particularly for original programming.

"I cling to the idea that I can stop share declining in a falling market," says Frow, who joined TV3 last year from Five in the UK where he was controller of features and entertainment. "When I first came here, agencies made it very clear they wanted to know why they should advertise with us. More original programming would define us." Frow adds that TV3 should be more than "ITV Lite", but isn't optimistic that budgets will increase significantly.

Agencies, meanwhile, have their own preoccupations. David Hayes, managing director of Mediaedge:cia Ireland, says there have been problems with Nielsen's reporting of TV ratings. "There have been issues in terms of design, methodology and accuracy," he says. "Since Sky Digital launched in 2000, there have been lots of smaller channels in the market, but the research hasn't followed."

Hayes says a system that was designed to monitor three or four channels now has 20-plus contractors involved. Smaller channels have been over-reported; larger channels under-reported.

Of more concern than digital switchover are declining audiences and, for the first time this year, deflation in the cost of TV advertising. "Because of the buoyant Irish market over the past seven or eight years, we've seen inflation. But with the credit crunch, we're seeing a year of deflation and some money moving from TV to online," says Hayes.

Bill Kinlay, chief executive of MindShare in Dublin, one of the biggest media agencies in the market, says: "We've had rapid growth in TV revenue for the past four or five years, and for a long time TV was cheaper here than in the UK. However, it is now more expensive." Kinlay credits the strength of RTe's programming for its ability to withstand growing competition for viewers. "The quality of RTe's programming is very strong. For years, it's had to compete against the best of the BBC, C4, Sky and everybody else," he says.

Broadband frustration
The development of broadband has been a frustration for media players and consumers alike. The infrastructure has been slow to roll out for a number of political and financial reasons (see box) and connection speeds can still fall below the 2MB required for good quality streamed video.

Twenty per cent of the Irish population have broadband access and the Department of Communications has shortlisted four firms, including BT and Irish telecoms firm Eircom, to help with a national broadband scheme designed to cover the 10% of Ireland where it would be unprofitable for the private sector to supply broadband.

Simon Crisp, chief executive of digital agency Adwalker, says: "I don't think the country as a whole is served well by new media. There's lots of talk and technical work being done, but I don't see a real passion for bringing new media forward."

He says demand from clients for greater online presence would be one way of driving digital marketing and suggests media owners need to provide networked solutions, rather than piecemeal offerings. "Eircom and others might be innovating in lots of ways, but they're not coming to market," he says. Services from mobile operators O2 and Vodafone are currently more compelling than anything online, he suggests.

For now, digital TV remains the strongest electronic medium in the market, with plenty of scope for broadband applications yet to be developed.

BROADBAND - A SLOW START FOR TV OVER THE WEB

Ireland, like the rest of Europe, is experiencing unprecedented growth in broadband internet access. But unlike the rest of the UK, where consumers first got used to fixed-line broadband access, the revolution in Ireland involves mobile access, from laptops rather than phones, where fixed-line broadband isn't available.

There's a simple reason for this - the infrastructure for broadband internet access over fixed telephone lines has been slow to develop. Monopoly telecoms provider Eircom began upgrading the network in 2001 and 2002 and cable company NTL also had plans to supply broadband in Ireland. But when NTL went bust in 2002, the momentum slowed.

ComReg introduced a fixed-line wireless local access scheme to kick-start the broadband market again, and things are picking up with a restructured NTL now offering triple-play phone, TV and broadband services. And newer players are offering broadband with download capability of up to 12MB.

Patricia Dowling of ComReg says: "There has been underinvestment in the network by Eircom and we're struggling with the legacies of that."

But broadband access is already a reality for the 20% of the population who have taken it up and ComReg commissioner Alex Chisholm said in a speech in April that broadband is now available to 85% of the population.

What's needed are compelling services to encourage more people to get broadband in their homes or on mobile devices. RTe offers streamed and on-demand programming on its website RTE.ie and has a mobile TV service, but it is at the forefront here. There are no other IPTV services.

"Content providers need to offer compelling products," says Dowling, while admitting there are "a host of issues" that also need addressing, beyond the technology, in the roll-out of broadband. In some cases, Irish intellectual property rights for online entertainment are unclear. For instance, iTunes was licensed in Ireland two years after the rest of Europe and Eircom is under legal pressure to reveal names of illegal music downloaders.

Dowling adds that ComReg's speed tests show that at least consumers in Ireland are getting the speeds they are promised from broadband providers: in the UK, providers promise downloads of 8MB and consumers often struggle to get 2MB.

In the long run, fibre-optic fixed-line networks will be the best technology to deliver next-generation broadband speeds, according to Dowling.

For now, the simplicity of "plug and play" mobile broadband access is helping drive consumers to take up broadband. The more that happens, the more likely it is that media owners will want to offer them something compelling to do when they are online.