The war of words between state broadcaster RTÉ and private-owned TV3 continues after the Institute of Advertising Practitioners in Ireland (IAPI) released a statement yesterday urging RTÉ to reconsider its new trading scheme. RTÉ developed the new scheme as a result of an Enforcement Decision from the Competition Authority last year.
What started as an official complaint to the Competition Authority has ended with a letter to the Minister for Communications which was published in the national press.
TV3 made an official complaint against RTÉ in 2009 which prompted the Competition Authority to launch an investigation into the broadcasters ‘share deal’. TV3 argued that RTÉ had an unfair advantage in the ad market due the station discounting advertising rates for clients. TV3 argued this was unfair competition, and was resulting in the private-owned station losing out on ad revenue.
TV3 CEO David McRedmond wrote to the Minister for Communications Pat Rabbitte on April 16, calling on the government to put an end to RTÉ’s dominance in the ad market.
Following IAPI’s statement yesterday, which said RTÉ’s trading scheme is “still not structured according to the best interests of the industry”, TV3 said it welcomed IAPI’s comments.
Speaking to IFTN, TV3’s director of sales and marketing Pat Kiely said: “The whole part of the competition process is to try and ensure that there is a fair trade-age scheme put in place and from anything we’ve seen to date that just doesn’t seem to be coming through from RTÉ”.
RTÉ hit back with claims that TV3’s comments are too premature as its new trading scheme hasn’t officially launched yet, thus making it impossible to vet the possible outcomes. RTÉ’s commercial director Willie O’Reilly said, “TV3 are seldom without criticism of RTÉ and so we expect criticism at every turn. It is not part of my mandate or part of our business to push money to TV3. We're here to promote RTÉ and our revenue. Do I think they're a bit premature? I kind of think they are, because like everything [the new trading scheme] has to bed in, there's a process of education for ourselves in terms of the implementation, and for the agencies and their clients in understanding it.”
RTÉ plans to start the new trading system in July, with this month and June still trading under the old system.
The IAPI statement referred to minutage reduction at RTÉ, and stressed that it “strenuously opposed the removal of advertising minutage from RTÉ One, or any channel.” RTÉ echoed this statement, claiming the removal of minutage from RTÉ would have a direct effect on advertising agencies as well as the taxpayer.
“The removal of a lot of advertising time from RTÉ One would destroy the advertising agencies and many advertisers. If you remove those where will the money go? The money won't go to TV3, a small amount of it might, there might be a bit of price inflation, on RTÉ Two, because it becomes more valuable. But the money will slot out of the system.
By artificially removing a huge amount of them, i.e. by closing down advertising in RTÉ One, you completely distort the market. You also put forward an extraordinary charge on the taxpayer; somebody has to pay for the making of those shows and that's a very important thing to consider. My role is to try and ensure continuity with funding with RTÉ in order to make the programmes that and to fund the schedules. Somebody has to fund it, and only person who can fund it if, it isn't the advertisers, will mean further taxation on the public,” said O’Reilly.
TV3 also stressed that it would only call for a reduction in minutage if RTÉ did not comply with the Competition Authority’s Enforcement Decision. “That reduction in minutage should only come about if, and only if, RTÉ are not compliant with the competition law. If they're compliant well then we have a trading scheme that should work for everybody. But if industry fails to deliver on that, we're calling upon the government to reduce their [RTÉ’s] advertising dominance and most likely the only way to deliver that is by reducing their advertising minutage,” said Kiely.
All eyes will be on RTÉ this July as only time will tell if its new trading scheme will meet the requirements of the Competition Authority. In the meantime, TV3 firmly believes the issue has not been resolved, and continues to call on the state broadcaster to resolve the issue.