4 July 2020 The Irish Film & Television Network
     
RTE doubles foreign acquisition budget
23 Jul 1998 :

RTE has emerged as the real winner in the digital television stakes and is now free to find a strategic partner in the new digital terrestrial television infastructure company to be formed, but as the market is still analogue based and will be for some time yet RTE still has to contend with the treat of TV3 in the near future. RTE is set to double its budget for acquiring foreign made programmes to meet competition from TV3. As reported previously on this site RTE and TV3 were recently in competition for the first time at the Los Angeles screenings, the most important international market for buying television programmes. RTE outbid TV3 to secured the television rights to 'Independence Day' from Fox.

The two rival stations have been bidding for many of the same shows with major US studios including Twentieth Century Fox, Warner Brothers and Paramount and consequently forcing up the price of films, documentaries and drama series for the Irish market. RTE had up until now been able to dictate deals, but with the arrival of TV3 it has lost its monopoly position and is now paying around 10-15% more for films and television programmes. This is, of course, good news for distributors, who will be able to sell more product into the Irish market place and at a better price. According to the Sunday Independent RTE is aggressively outbidding TV3 on international markets and offering significantly higher prices for imported shows and films in a bid to outperform the independent channel in programme acquisition. RTE is reportedly prepared to spend close to TV3s' total operating budget on foreign acquisition alone. RTE is claiming that the increase in budget is the result of intense competition in the international market place. In 1997 RTE spent just 7m acquiring foreign programmes. In 1999 it is budgeted to spend double that 14m and this year its acquisitions budget is set to grow by 40%, most of which, will naturally, be spent on programmes to be screened after the September launch of TV3. TV3 is claiming that RTE is spending 20% more on programmes even though there is no apparent shortage and claim RTE is raising prices without need. According to TV3's Chief Executive Mr Hetherington there is a predatory approach to TV3 and the station has no interest in seeing prices rising for acquired programmes from outside the Republic. It must be said that RTE is hardly rising prices on its own and what ever TV3 is saying, it takes two to drive up the price of product and TV3 must be bidding also for the same shows.

RTE is continuing in its attempt to streamline its operation. The recent internal report by RTE which said up to 370 redundancies and total operational savings of 20 million would needed by the station, has been rejected by the RTE trade union group. They claim the report was based on one-sided analysis and was "partial and flawed". The secretary of the Group, Mr. JP Coakley, is reported as saying that any change would have to be found, on the principles of inclusiveness and parity of is esteem set out in the Partnership 2000 document. As the report spoke of a lack of trust between unions and management, the unions have proposed a partnership steering committee, made up of unions, management and an independent chair "to put in place recommendations for the establishment of a long term partnership process at all levels of the organisation".

In addition to house cleaning at RTE, television viewers may face a 20% increase in licence if proposals being drawn up by RTE are accepted by the Government. The licence fee was last raised in 1996 to 70 after a 10 year freeze. RTE's licence fee is among the lowest in Europe and is not index linked. RTE hopes these measures will offset increased spending in acquisition. How winning the Digital Television stakes will affect these negotitions and fee increases is yet to be seen.

Meanwhile in New Zealand where CanWest has an interest in two channels TV3 and TV4 the company has confirmed that it reached an out of court settlement in the anti-competition case it took against New Zealand's state broadcaster, TVNZ, after alleging that TVNZ was trying to lock it out of the market by acquiring exclusive rights to more programmes than it could ever transmit. After the settlement TVNZ wrote off some NZ$30m worth of programme rights, representing material it can never broadcast. RTE has watched these developments closely and last week denied suggestion that a visit to New Zealand by RTE sales manager Geraldine O'Leary was arranged to study CanWests operation there. RTE claims it is installing a computer system similar to that operated by TVNZ and the visit was apparently to see it in operation. Although not many companies send their sales manager to see a computer system, who knows may be Geraldine O'Leary is multi-talented.

Canwest also upped its stake in UTV to 29.9% in February of this year. Scottish Media Group decided to sell its 18.2% stake for 23.9m after its own take-over bid was rejected by UTV. Under Stock Exchange Rules, CanWest will have to make a formal bid if it wishes to increase its share over 30%. RTE is currently strengthening it signal into the North under threat of legal action by UTV on territorial rights.

RTE it appears is fighting it out on all fronts for the present but at least they have secured their future with digital.

Michael Mc Mahon 22/7/98



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