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Tuning-In To The Future of Irish Television
01 Oct 2012 : By Steve Cummins
The picture is beginning to change for Irish broadcasters amid a raft of technological changes
The Irish broadcasting industry – like the television world – is going through unprecedented change, but what are the challenges ahead and how are Irish broadcasters facing them in the current landscape?

In a year bookended by the 50th anniversary of TV broadcasting in Ireland and the forthcoming switch to full digital terrestrial television, the word ‘change’ is very much to the forefront of the minds of broadcasters, viewers and programme makers. Television in Ireland – and thus the Irish broadcast industry - is changing and that change is happening at an unprecedented speed. It’s changing in how its audience accesses its content, through to the abundance of choice available to viewers and the growth in commercial competition between broadcasters.

Programmes and talent developed for Irish television can now impact worldwide online and find an audience beyond the TV set. Audience interaction through social media networks such as Twitter and Facebook are on the rise with the trending tweet becoming the modern day equivalent to television’s “water cooler moment”.

Second-screen usage of laptop, mobile and tablet devices is now running at almost 60 per cent among some audience demographics with mid-programme postings to Twitter now the equivalent of the TV dinner.

Viewers have found themselves in an age of Saorview, digital TV, increased broadband, connected TV sets, hash tags, interactive-players, PVR, HD, 3D, on-demand and digital widescreen. They can watch what they want, when they want and where they want. They are now in a content heaven filled with expanding online and television choice boosted by big budget international programming that has only served to heighten their expectations in programme production quality.
Set
'Deception' is TV3's first major Irish-made drama series

This means that programme makers behind home-produced entertainment such as ‘Love/Hate’, ‘Deception’, ‘The Voice of Ireland’ and ‘Take Me Out’ have to hit benchmarks set by bigger-budgeted international broadcasters such as Sky Atlantic, HBO and ITV. TV formats, lifestyle shows and scripted dramas are where viewer demand is and producers are looking for ways to get there at a time when Irish broadcaster’s budgets and revenues are in a state of flux. Television is booming but it is changing at such a rate that those involved in the industry are struggling to keep up with that change and are at odds in predicting where an uncertain path may lead to. Broadcasters are, as RTÉ director general Noel Curran noted earlier this month, operating in an era of “profound uncertainty, change and challenge”.

“It’s tough,” offers TV3’s director of programming Ben Frow, when asked about the current landscape of Irish television. “Certainly for TV3 it’s like the year of being assaulted so you know you’ve got the Euros, and the Olympics and you’ve got digital switch-off in October and you’ve got an economy that’s in the toilet and you just think, ‘Oh my goodness me what else can you throw me?’, so a very very tough year indeed.”

Pull
I don’t think we’ve seen changes like this since really the beginning of television "

Frow notes that, from his programming perspective, it’s been “much tougher than 2008, definitely the worst year of the recession” adding that the past nine months have made it “much harder to take risks, much harder to try new things”.

His is a similar story to that across the city in RTÉ where the impact of the economic downturn is being felt through a series of drastic cost-cutting measures. Commercial revenues at the broadcaster have fallen by more than €100m over the five year period since the boom year bubble burst. “I think that revenue is very, very challenging at the moment,” notes Glen Killane, RTÉ’s managing director of television. “I don’t think we’ve seen changes like this since really the beginning of television. It’s no secret that there’s been change in how people consume TV; the range of platforms that are available; the range of devices that they are spread across; the challenges in terms of the commercial market and the whole economic environment. I think we are probably feeling it a little bit more in Ireland than in maybe the UK. Certainly the commercial side of things is a lot more challenging than it is in the UK. If you add the technological impetus to the commercial downturn, you get quite a challenge indeed.”

That challenge sees no sign of abateing. As 2012 enters its final quarter it will bring with it the year’s most widely publicised and pressing change to the industry. On October 24 the analogue service will be switched off and RTÉ, TV3, TG4 and UTV in the North will become fully immersed in a digital world.

“I never thought I’d be here, I thought I’d be out of television before the digital switch-off and that was almost my plan when I first heard about it 15 years ago,” admits Frow. “I thought ‘Oh gosh, I must be out of television before that day comes’. But here I am, with five weeks to go. The speed of change is just phenomenal.”

The impact of that change on Irish broadcasters will be two-fold, hitting them in their most vulnerable areas - viewing figures and advertising. On the face of it, the impact on viewing figures should be the least severe. As it stands, RTÉ remains the most-watched broadcaster in the country with just over a 40 per cent share of the peak-time audience across multi-channel terrestrial. RTÉ One is the most viewed station with 30.9 per cent of that viewership with RTÉ Two’s viewing figures dipping year-on-year and currently standing at 9.3 per cent. By contrast TV3’s 2011 peak-time share stood at 13 per cent with TG4 at 1.9 per cent.
Set
Saorview will be made up of nine channels

On the Saorview service, which is made up of six RTÉ channels, two TV3 stations and TG4, the landscape will largely remain as it stands on analogue terrestrial – an RTÉ versus TV3 battle for viewers. Here, while both broadcasters anticipate a “small drop” in viewing figures, they remain hopeful that their greater range of channels will offset any fall-off or, as Frow puts it, the switch “may take away from Peter but it’s going to Paul”.

In this instance, TV3 can perhaps expect its digital-only service 3e to benefit from some of the fragmentation of viewers and perhaps pick away at a declining RTÉ Two viewership. Discounting the Irish and British terrestrial channels available digitally, 3e remained the biggest digital-only channel last year, its continued year-on-year growth drawing a 1.3 per cent share and surpassing the likes of E4 and Sky One.

On pay-tv digital services such as those operated by Sky and UPC, the fight for viewers will be tougher. Here, RTÉ, TG4, UTV and TV3 will compete for Irish viewers alongside numerous – mostly British-based – stations. However, while viewing figures are likely to see a dip, that dip is expected not to be overly significant, with the Irish traditionally holding their own against multi-channel competition. For decades, Irish broadcasters have competed on analogue against British multi-channels (BBC, Channel 4 and ITV) while a reported 85 per cent of Irish homes already have access to pay-tv services. Over the boom years, when most homes switched to pay-tv services, RTÉ One’s viewing figures across cable and satellite audiences stood at 20.72 per cent in 2000 and hovered around that mark to end the decade at 19.49 per cent. TV3’s viewership grew from 7.61 per cent to 9.53 per cent.

By contrast, Irish broadcasters’ international rivals suffered huge dips as a result of the fragmentation due to the growth of choice. UTV went from 12 per cent to 4 per cent; BBC One from 10.4 to 4.8 per cent, and Sky One – then mainly available on Cablelink services - fell from 6.5 per cent to 2 per cent.

Where the picture begins to dim for Irish broadcasters is in the increased competition for advertising in an already squeezed marketplace. On pay-TV platforms, the digital switch will see more than 30 channels compete for advertising. Even ahead of the switchover, Ben Frow commented that at TV3 “advertising is through the floor, it’s desperate for us”. Pat Rabbitte, Minister for Communications, Energy and Natural Resources added last month that the competition for advertising in Ireland is getting “incredibly crowded” with the majority of competitors “originating from outside the State”. These, largely British-based stations offer opt-out advertising – meaning that while they beam out the same content across Britain and Ireland, they offer localised advertising during the advert breaks meaning Irish audiences view different commercials to say a Welsh audience.

Some of the 30-plus services carrying opt-out advertising are the Channel 4 portfolio (Channel 4, E4, E4+1); and (all represented by Sky Media) the Viacom portfolio (Comedy Central, Nickelodeon and Nick Jr), E! Entertainment; Discovery Ireland; and the Sky portfolio (Sky One, Sky Sports channels, Sky News channels).

“Sky would have a significant share of the market and it’s a tough market out there,” notes David Hayes, managing director of Mediaedge:cia Ireland, a global leader in media planning and buying, among other things. “Sky are opting out more and more channels in the Irish marketplace. The more and more channels they opt out, it doesn’t cost Sky a huge amount of money so as part of their package they’ll get extra revenue for that so it puts pressure on other broadcasters. I mean there isn’t any other medium in advertising that’s bringing in extra channels except television. So new channels coming in to compete in a declining market isn’t good for the likes of TV3 and RTÉ.”

Pull
The economic downturn is far more impactful in terms of our revenues than the digital switchover would be "

Hayes, like many other professionals in advertising, doesn’t foresee any massive pick up in spend on television advertising – or any other medium – in the near future. “Advertising is a bell weather for the economy,” he says, “and the economy is obviously not doing well. The TV market is not immune to that. It hasn’t been doing as badly as other media, such as print and outdoor, because television tends to be a tried and tested formula of marketing and communication, but advertising spend is significantly down and so they are suffering.”

For Killane and RTÉ it is the continued impact of the downturn, and not the increased competition that the digital switchover will bring, that most concerns him. “At the moment,” he says, “the economic downturn is far more impactful in terms of our revenues than the digital switchover would be.”

The squeeze on resources comes at a time when RTÉ and TV3 can’t afford to stand still lest they be left behind. Both have invested strongly in insuring they are technologically up to speed, with RTÉ’s digital division particularly active in signing agreements involving Kit Digital and Samsung over connected televisions and in re-developing platforms to accommodate Time Shift Viewing (TSV) Audiences.

These TSV audiences are essentially catch-up audiences. They use Personal Video Recorder (PVR) services such as Sky+ and UPC Digital+ to record and pause live TV, as well as internet-based catch-up services such as i-Players and video-on-demand.

Although the audiences here are small – some 94 per cent of television viewing is still done live through a traditional TV set – TSV is likely to grow in the coming years and, most importantly, draws an audience that is highly appealing to advertisers. Typical PVR audiences are aged 25-44 years old and are profiled as the top rated ABC1 demographic most companies wish to target.

“Catch-up services are very popular with advertisers,” says David Hayes. “The reason for that is that it is drawing in a different audience to television. People who tend to watch catch-up television tend to be busier, younger, more up-market and therefore more difficult to reach on television so it’s a good audience and is very popular. It’s dearer [for advertisers] because it goes back to the type of audience it reaches. The more difficult an audience is to reach, the more expensive that they are.”
Set
Glen Killane is the managing director of television at RTÉ

Revenues on catch-up services are, however, not near where broadcasters need them to be. As Hayes comments, the revenues generated here for broadcasters are “a drop in the ocean in terms of what they are losing”. Killane, however, sees catch-up and on-demand as a growth area in terms of viewing figures, and thus a platform that broadcasters need to monetise effectively. “People will be expecting to see content as and when they demand,” he says. “What we have to do with the advertising industry and ourselves is to crack how we monetise that better in terms of advertising. We have to get advertisers and the agencies to understanding the value of being able to catch-up and of being able to watch your favourite series on RTÉ as and when you want it. Currently the revenues generated by catch-up and by other services aren’t anywhere close to linear TV.”

“PVRs are a real factor now,” he adds. “In some instances we’re getting a very high percentage of viewers to our acquired American shows on PVR. I think we’re looking at new ways of advertising around that, perhaps placing shorter ad-breaks around them. While PVR is being counted as a viewing, there is concern that some of the breaks are not being watched fully and so that requires a different kind of advertising, a different kind of spot advertising that is more suitable to a PVR fast-forward type manoeuvre.”

Amid the dip in advertising, the shifting viewing habits and the growth in competitors, the one constant remains – content is still king. Indeed the biggest content across live TV is echoed on the catch-up services. Over half of all the top 100 TSV programmes are reality TV shows such as ‘Come Dine With Me Ireland’ and ‘The X Factor’ alongside popular US series’ such as ‘Revenge’.

Pull
Content is still king, and I know it is a cliché, but it is true. The only thing that’s changing is the proliferation of platforms and devices "

“However people watch television, rightly or wrongly, I believe it all comes down to content,” says Ben Frow. “I always believe, what is the programme; what is the content; what’s going to drive people online? And our online business is increasingly successful but what drives people online is the content.”

Killane is in agreement. “Content is still king, and I know it is a cliché, but it is true. The only thing that’s changing is the proliferation of platforms and devices. The audience is naturally being fragmented by greater choice, but our content can cut through all of those channels. It’s distinctive Irish-made content that we strive to deliver alongside the best of the US acquired material, which we deliver for free. We’re offering audiences an opportunity to see those shows and to see Irish-made content and I think that cuts through the mass of channels out there.”

A mix of homegrown content, TV formats and acquired international content is what has kept RTÉ to the forefront of advertisers minds when they do spend on television. “The RTE sales pitch would be less clutter because there are shorter advertising breaks, and they have all the top programmes,” says Hayes.

“If you look at the top 100 programmes from last year, they’re pretty much all from RTÉ. So it comes back to a combination of some of the stuff they import, and obviously Irish people like to watch quality home-produced Irish programming. Also, most of the Irish sport is on RTÉ and again that’s a draw. That means that you end up with the big juggernaut shows on RTÉ.”
Set
Format TV shows such as 'The Voice' are less risky for Irish broadcasters because of their proven record with international audiences

In a changing broadcasting landscape where you have non-traditional broadcasters such as British Telecom (BT) recently outbidding Sky for some sports rights – and thus becoming a major carrier of sports content - homemade Irish content is what will differentiate RTÉ and TV3 in the eyes of viewers and advertisers. TV3, for instance, has come from a place of little or no Irish-made content to a schedule that is made up of roughly 40 per cent Irish-made programming.

“If you have the right content, then you’re okay,” says David Hayes. “So any media owner out there that has access to the right content is in a good place. TV3 is a good example. When TV3 was owned by Canwest ITV, all they really were was a re-seller of cheap and cheerful American imports. Then they brought in Ben Frow and are now owned by Doughty Hanson & Co. Those guys are very much trying to formulate a channel that has a particular identity. They’re doing that by producing content.

“Look at the amount of content that TV3 produce today versus a number of years ago. They are producing huge amounts of content, not because they want to fulfill some sort of public service remit, but because they realise how important content will be over the coming years. It’s not simply a matter of being a carrier because the carriers of the future could be Vodafone or Eircom. If you are carrying content you are more or less a commodity. It’s the people that produce the content that are the people with the added value.”

The catch for Irish broadcasters is that producing that content has become trickier as resources have become squeezed. Both RTÉ and TV3 have, over the past five years, tended to veer towards tried and tested international formats such as ‘The Voice of Ireland’ and ‘Take Me Out’ when commissioning work from independent production houses and, although TV3 are set to this year unveil their biggest homemade risk – the TV drama ‘Deception’ – Ben Frow notes that the decision to make the drama would not have been possible without access to funding from the Broadcasting Authority of Ireland (BAI) through the Sound & Vision scheme.

“Most of our independent work has to go through the BAI, we still rely on the BAI Sound & Vision fund to help us fund a lot of the independent producers,” he says. “That makes it tricky as the criteria for that fund is quite specific and it’s hard to match the criteria with the tone and aims and ambitions of TV3.”

Pull
I think in 10 years there will be no such thing as online because I think everything will be digital "

As for where the Irish broadcasting landscape will be in five years time, it seems to be anyone’s guess. David Hayes sees the whole media landscape “up for grabs” over the coming decade. “I think in 10 years there will be no such thing as online because I think everything will be digital. We’ll stop talking about online in a couple of years time. If you look at where tablets are going, in particular, and the potential of Internet Protocol television coming on-board. You could see print becoming fully digitised in 10 years time, newspapers, if that’s what they are called, being delivered to a tablet device; radio stations being listened to on a variety of digital devices and then television being consumed via an IP-enabled television set. Then everything becomes digital. Where will IPTV end up? Will it be a portal? Will it look like an iPhone with a number of apps where you go into a comedy app to watch comedy or a Warners Movie app to watch a Warner Brothers movie? Who knows? Will the traditional guys like RTÉ, Eircom, UPC and Sky even still be around? Huge amount of change, I think, is going to happen in the next 10 years.”

Glen Killane echoes that bigger change is to come. “It’s very, very difficult to say. I’d be kind of lying if I said I’d any clear picture as to where we’ll be in five to 10 years. I think that the five to 10 year horizon is a very, very, very long horizon to look at in this time of great change in the industry.”


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