Development of Irish television


Seminar Paper, 1998

15 Pages, Grade: 1,7 (A-)

Anonymous


Free online reading

Contents

1 Development of Irish television

2 Structure of the Irish television market
2.1 Organisation of the dual system
2.2 Financial structure of the dual system
2.3 Illegal broadcasting in Ireland

3 Competitive landscape of the Irish TV market
3.1 General overview of the competitors
3.2 Competitve positioning

4 Future challenges and conclusion

1 Development of Irish television

Irish television started in 1961 when the national radio station Radio Telef í s É ireann (RTÉ) was assigned to develop the Irish television market by the 1960 Broadcasting Authority Act. RTÉ started to broadcast its TV signal on a terrestrial basis, which means that it could be received by antenna.

Even though RTÉ was the only Irish TV station it was not without competition. Due to the geographical nearness to Great Britain the British stations‘ TV signal covered not only the United Kingdom but also parts of the Republic of Ireland. This well-known phenomenon is called overspill. With the terrestrial overspill about 30 per cent of the Irish households were able to receive British television before RTÉ even started to broadcast its own programme. In 1978 RTÉ launched a second channel called RTÉ 2 which was 1988 renamed and is called Network 2 now. The launch was a direct reaction on the demand for a second channel of the western regions which could not receive the British programmes and were therefore limited to RTÉ 1 only.

The monopoly of RTÉ ended in 1988 when a new Broadcasting Authority Act allowed the licencing of private stations. TV3 was the first TV station which obtained the rights to launch a private, commercial programme. But it took the best part of a decade from getting the licence to the actual launch of TV3.

The consortium which received the licence to start TV3 in 1989 had financial problems and claimed the Irish market to small for an additional programme. In 1995 the TV3 project was again close to a start, when the Northern Irish TV station UTV1 joined the consortium. But it took only a few months, before UTV decided to step out again. The main reason for UTV to leave was the conflict between UTV’s existing audience in the Republic2 and the audience to win by TV3. Another investor had to be found and in April 1997 the consortium was finally complete. On September, 20th 1998 TV3 finally launched its service3.

In the meantime RTÉ launched a third station called Teilifis na Gaeilge (TnaG). This station started in the autumn of 1996 and is broadcasting only in Gaelic language to support the survival and spreading of Irelands "first official language".4

Due to technological developments competition for RTÉ grew stronger over the years. The viewers wished to have a greater variety of TV channels and the launch did not satisfy the demands of the audience, because Network 2 only brought a selection of all the British programmes. Therefore some communities established receivers which they built on higher points of their vicinity. These receivers caught the British TV signals boosted their power and deflected it to the households of the vicinity. Soon this deflector systems spread over the rural western Ireland serving about 150,000 households5.

Additionally the technology for cable broadcasting and Multipoint Microwave Distribution

Systems (MMDS) was developed. While cable was mainly used in the cities and requires a direct connection between the household and the cable network, the MMDS system brought the TV signals to the rural areas of Ireland. MMDS works similar to terrestrial broadcasting but on a much higher frequency. Ireland is the only European country which has a significant MMDS industry.

With deflector systems, cable and MMDS British channels became receivable for nearly 100 per cent of Irish households.

Finally the broadcasting via satellite increased the total number of channels once more.

This paper wants to show the development of the Irish television market under the influence of foreign competition and what challenges the future might bring.

2 Structure of the Irish television market

2.1 Organisation of the dual system

The Irish TV market is regulated by various Broadcasting Acts. Those contain detailed and clear rules for broadcasting. It started with the 1960 Broadcasting Authority Act which established public service television in Ireland.

The step to the dual broadcasting system was made by the Broadcasting Authority Act of 1988. As a result private commercial television was legalized and the broadcasting monopoly of RTÉ ended.

The public station RTÉ always was under direct (and sometimes restricting) control of the Irish government. Responsible for the private stations is the Independent Radio and Television Commission (IRTC). The establishing of the IRTC also was a result of the 1988 Broadcasting Authority Act. The members of the commission are appointed by the Government and their task is to control the operating of every broadcasting station outside the RTÉ. This legislation is clearly influenced by the membership of Ireland in the European Community where many other members also established a dual system of public service and private TV.

The only private TV station TV3 is owned by CanWest Global Communications (a Canadian TV company) which holds 45 per cent and is the largest stakeholder6. A group of investors around the U2 manager Paul McGuinness own 20 per cent of the station. This group has always been in the TV3 consortium since the station received its licence7.

Private TV stations in Ireland are required to place 35 per cent of their equities in public hands. Due to this restriction the remaining stakes are placed in the hands of ACT Venture Capital.

In 1993 another Broadcasting Authority Act was legislated. Now RTÉ is caused to buy a certain part of its programme from independent TV production companies. The amount which has to be paid for the programmes rose over the past years: In 1994 RTÉ had to spend 5 million Irish pound and in 1999 the public station will have to devote 20 per cent of the total programme expenditure to independent productions. This Act is not only aimed at RTÉ but also at every other TV station. The definitions for independent productions are very restrictive to keep the stations from donating the money to their subsidiaries.

Both public and private TV stations are required to fulfil a certain quota of Irish produced programmes. TV3 is allowed to start with a 15 per cent quota growing up to 25 per cent after five years of operations. RTÉ already has to fulfil the 25 per cent quota of home-produced programmes.

Those quotas refer to the total programming time and not to the programme expenditures. Therefore parts of the Irish contents may be produced by the stations themselves.

But the Irish broadcasting laws are not only regulating ownership structures and the amount of local content. Section 31 of the above mentioned 1960 Broadcasting Authority Act allows the broadcasting minister to prohibit the broadcast of anything which, in the office holder's opinion, promotes crime or undermines the authority of the state8.

Significantly used was Section 31 since 1972 when the acting minister banned the voices of the Irish Republican Army (IRA) and dismissed the whole board of RTÉ when they were hesitating to fulfil the orders. Four years later also voices of Sinn Fein, the political party that supports the IRA, were banned from public broadcasting. Because of the events in 1972 RTÉ developed a climate of paranoia and self-censorship which climaxed in a total ban of any statement that members of IRA or Sinn Fein made, no matter what topic9. In 1990 RTÉ's interpretation of the ministers order was disagreed by a judgement of the Supreme Court. The conclusion was that the censorship of Sinn Fein voices was going to far. The court agreed with the ban of political statements but opposed the total censorship. Finally in January 1994 a new broadcasting minister refused the annual renewal of the ban and one of Western Europe's most draconial censorships came to an end10.

2.2 Financial structure of the dual system

RTÉ received its revenues since the first day on air in 1961 from licence fee, which had to be paid by the public, and advertising. In 1996 the licence fee accounted for 35 per cent of RTÉ's revenues while advertising (in TV and radio) brought 52 per cent. The remaining income was created by the RTÉ Commercial Enterprises, a subsidiary of RTÉ, and other broadcasting revenues (see table below).

Table 1: Revenues of RTÉ over the past years (million Irish pound / per cent)

illustration not visible in this excerpt

In order to help private broadcasting companies (mainly in the radio sector) the Irish government started several attempts to reduce RTÉ's revenues from advertising. In October 1990 the Dail restricted the advertising time and the total revenues of the two RTÉ channels to a fixed amount. When in 1993 it was realized that TV3 still would not start and the law only excluded smaller advertisers from broadcasting instead of helping up private stations another Broadcasting Authority Act was legislated which erased the law of 1990.

During these years RTÉ earned 17 million pound more than it was allowed. The money was used to finance the start of the Gaelic language station TnaG. The operational costs for this station are financed by European Community funds and the National Lottery surplus.

TV3 needs to finance itself only by advertising as any other private station around the world. It is expected that prices for TV advertising will decline with the new competitor in the market.

Besides the TV stations there are various companies operating in the Irish broadcasting market. More than 70 cable and MMDS companies are currently working. When the first licences were issued in 1974 they were restricted to a 500 connections maximum, leading to a highly fragmented industry. Only by relaxing regulations in the following years companies were able to grow. Today the three biggest cable companies (Cablelink, Prince's Holding and Cable Management Ireland) account for more than 95 per cent of the 560,000 cable subscribers11.

2.3 Illegal broadcasting in Ireland

Due to the overspill of British TV signals many Irish households always had the possibility to choose between many programmes. But the British overspill never served every part of the Republic. As a result some communities started to install the deflector systems to catch the weak British TV signal and to broadcast it into the homes.

In 1997 years after the first installation the deflector systems led to a big dispute between the deflector operators and the MMDS companies12. The deflector operators were caused to stop their service for the communities by the Government. The deflector systems always ran illegal and the tolerance of the Irish government ended when economic interests had to be considered. The deflector operators never paid any taxes or copyright royalties even if they charged the users a small fee for the service. The licenced cable and microwave companies on the other hand demanded a much higher price for their services. Due to this discrepancy in price the Cable Communications Association of Ireland - an alliance of the MMDS and the cable companies - asked the Government to forbid operating the deflector systems. This dispute even became political when the deflector operators threatened to support only deflector-friendly parties.

3 Competitive landscape of the Irish TV market

3.1General overview of the competitors

Today in the Republic of Ireland there are about 30 different channels to receive. Except the four Irish stations mainly British terrestrial channels create a lot competition. Table 2 shows the important channels.

Table 2: TV Panorama

illustration not visible in this excerpt

Sources: Television 96 / own research

The main players of the Irish market are the public stations RTÉ 1 and Network 2. The third Irish station TnaG struggles to establish itsself in a little niche of the market, but failed to do so until to date. TV3 has not been measured yet, due to its short time on air.

Main competitors of the Irish stations are the big British channels. In first place the channels of the public station BBC followed by the private stations Ulster TV from Northern Ireland and Channel 4. With the exception of Ulster TV no british channel ever intended to broadcast to the Republic.

Also a signifanct role play the british satellite channels. Together they account for a bigger part of the audience than TV3 plans to achieve in its first year.

3.2 Competitve positioning

Due to the technical penetration of nearly 100 per cent practically every single household is able to receive the public stations programmes of RTÉ 1 and Network 2. Whether TV3 is becoming similar important only time can tell. At the start the coverage of TV3 is nearly the same as the two RTÉ programmes. The first signs for a successful start of the first private TV station are plans of Cable Management Ireland, one of the big cable companies, to place TV3 on its second channel and moving RTÉ’s Network 2 back to seventh channel13.

For the old monopolist RTÉ the market is getting more difficult. Until the start of TV3 RTÉ's main competitors, the British-based channels, did not care about the target group of the Irish station. Therefore the scheduling of RTÉ's programme was not really a challenge14. Starting a blockbusting event only minutes before the british competition, e.g. the BBC, captured the audience for RTÉ. Now the new competitor does care for every single viewer and RTÉ may face unknown problems.

Also the market for films, series and broadcasting rights of sport events becomes more expensive now. TV3 already bought the rights to broadcast the away matches for Europe 2000 qualification of Ireland's football team15.

Besides the Irish channels the British programmes have a big market share. Mainly the two channels of BBC, the Northern Irish ITV station UTV (Ulster TV) and Channel 4 which are all terrestrially broadcasted attract the attention of the Irish audience. Between 60 and 90 per cent16 of the Irish households are able to receive the British programmes via antenna, cable or MMDS. BBC 1 and BBC 2 finance themselves by licence fees of the British audience only, while Ulster TV and Channel 4 are private commercial stations which receive their revenues by advertising.

From this list Ulster TV plays a special role because this station carries not only advertising for its Northern Ireland audience but, due to the overspill, also for the viewers in the Republic. In fact UTV is received by more households in the Republic than in Northern Ireland, its domestic market. On the other hand RTÉ is received by only 30 per cent of the households in the North. Therefore RTÉ plans to boost its signal into Northern Ireland to carry some competition into the North, where Ulster TV lived commercially undisturbed for about 20 years17.

An increasing number of advertisers therefore decided to look at the whole Ireland as a single market.

Additionally to the terrestrially receivable channels various programmes are broadcasted via satellite to Irish homes. In first place the channels of the British BSkyB group (British Sky Broadcasting) owned by the Australian TV mogul Rupert Murdoch. Also the pan-european channels like MTV Europe, Eurosport and NBC Super Channel are transmitted via satellite. Furthermore some of the cable companies decided to provide their customers with these satellite programmes, too.

In 1997 the Irish TV stations of RTÉ occupied the biggest market share with about 54 per cent of the audience elder than 4 years. RTÉ 1 is with 34 per cent the most successful programme, followed by Network 2 with 19 per cent. The Gaelic station TnaG only has a market share of 1 per cent, which may, among the relativly small number of Irish speaking people, have to do with the daily broadcasting time of only 4 hours. But TnaG expanded broadcasting hours already. The British stations together have a market share of 30 per cent, where the BBC takes 15 per cent, Ulster TV 10 per cent and Channel 4 the remaining 5 per cent. Cable and satellite channels together account for 16 per cent of the market with Sky One and Sky News of BSkyB being the most popular programmes (see graphic next page).

RTÉ recently stabilized its market share which declined the years before from nearly 60 per cent in 1994. Apparently this results from the change in management in 1997. The new director general restructured the programme of RTÉ 1 and Network 2 and established longer broadcasting hours. RTÉ 1 launched its 24 hour programme in September 199818 and Network 2 now broadcasts until long after midnight. Graphic 1: Market shares

illustration not visible in this excerpt

Sources: Eurodata TV / AC Nielsen Ireland

Since 1961 RTÉ always was under pressure to keep the audience from switching to the British stations. This was achieved by placing popular self-produced series and shows in the prime- time.

Even though RTÉ always had a similar programme structure to public service channels in other countries, i.e. news and information account for about 25 per cent of the whole programme, the Irish channel retained its strong position in the market. The most successful production is the Late Late Show which provides the audience with a mixture of chat show, political discussion and entertainment for more than thirty years now19. In 1996 the Late Late Show still accounted for the second highest audience of the recurrent programmes20.

Network 2 is the channel for sports (in 1996 nearly 1200 hours) and, mainly imported, series which together take more than 40 per cent of the total programme output. Top sport events in 1996 and 1997 were the matches of the Irish football team and they accounted for an average market share of 49.7 per cent. This makes the deal of TV3 to buy the away matches of the football team even more interesting.

TV3 plans to rule the waves with a lot of imported series from Britain, the USA and Australia. Together with top sport events TV3 hopes to achieve a 6 per cent market share within one year. About 18 hours of the 100 hours weekly programming will be Irish produced with sports, current affairs and news taking the lion's share21.

4 Future challenges and conclusion

In the nearest future the development of TV3 will focus the interest of observers. TV3's goal is to achieve a market share of 6 per cent. Measurements after TV3's first week on air show that the goal already is achieved but without taking audience from RTÉ.

CanWest Global, the largest stakeholder of TV3, experienced good results with a 6 per cent share of the market, when they participated in the first private New Zealand TV channels called TV3 and TV422. CanWest is optimistic about the commercial success of the Irish station, but observers remark that the Irish market is "unique in the degree of over-spill from a foreign market"23. Therefore the strategy of CanWest to find a niche beneath major players might fail. Now the new station must prove to be worth the attention.

Next development will be the digital TV, which basically allows to broadcast different channels on the same frequency with a much higher quality. It is the worldwide agreed future standard of broadcasting. A new company shall be established to develop the infrastructure of digital broadcasting. RTÉ will become a 40 per cent shareholder of this new company and is ordered to develop the market of up to 30 digital channels24. With this new technology the Irish market becomes even more competitive.

Also interesting might be the development of the "Information Superhighway", even if there are no concret figures about Internet usage in Ireland. Estimated figures show a rapid growth from 16,000 to 30,000 in May 1995 up to 200,000 Internet users in June 1997. A direct relationship between telecommunication and broadcasting shall revolutionize today's broadcasting landscape. Broadcasting over the Internet has already begun (also two Irish radio stations are broadcasting online) and the potential of the net is enormous. The term 'interactive TV' describes the probable future of television. TV stations need to establish possibilities for the audience to interact with other viewers during the programme, e.g. chat rooms or quiz shows during a football game, so that the viewers attention is always focussed on the TV set.

Whether a small country like Ireland really needs four national TV stations is yet to decide. It seems quite probable that at least one of the stations will not survive.

The surviving of TnaG should be guaranteed as this station has the clearly identified task to spread Irish language through the country. This task might even be worth to receive future support with money from the Government. But recent measurement figures show that TnaG failed to achive its share in the market25.

RTÉ 1 as the biggest player in the market should also be able to stay alive and to retain its position in the market. More difficult is the future of Network 2 because TV3 is fishing for the same audience. With sport events and series TV3's programming structure is very similar to Network 2 and therefore the gain of the private station might be the loss of the RTÉ station. TV3 will have a lot of difficulties. The station started into a market which is more or less divided between the existing channels. The station has to develop a profile of its own, which is particularly difficult in a market with more than 20 existing channels. Observers already said that TV3 is similar to one of the BSkyB programmes but lacking some of the top series. The main task for every Irish station is to keep local competence for the Irish market. As long as Irish contents are only broadcasted by national stations, they will retain their leading position in the market. It is also important to be up-to-date with the technical development and to keep the pace of the british channels.

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[...]


1 UTV is the Northern Irish licenced TV station of ITV, a big private TV station in the United Kingdom.

2 The TV signal of UTV is receivable in the Republic by many households.

3 Linehan, H., 'New TV channel gets off to a low-key start', The Irish Times, 21 September 1998 p. 1.

4 So called by the constitution of Ireland.

5 One may remember that people in the former GDR did the same to get access to the West-German TV programmes.

6 Mulqueen, É., 'Signing of TV3 contract a 'momentous occasion'', The Irish Times, 2 September 1998.

7 Foley, M., 'TV3 will go on air one day early', The Irish Times, 31 August 1998.

8 Theoretically censorship is a crucial matter among western democracies, but different from other countries for Ireland it became also a serious practical issue.

9 Farrel, M., 'Let us hear what they say', Independent, 21 October 1993 p. 20.

10 Sotschek, R., 'Irische Regierung lockert Maulkorb', Tageszeitung, 19 January 1994.

11 Subscribers at the end of 1997.

12 Bird, M., 'Static nth', Time (international), 19 May 1997, p. 26.

13 Foley, M., 'RTÉ to consider legal action over channel move', The Irish Times, 17 September 1998.

14 Foley, M., 'A secret weapon in RTÉ's line of defence', The Irish Times, 12 September 1998.

15 Foley, M., 'TV3 secures rights for Irish away ties', The Irish Times, 18 June 1998.

16 Figures of measurement institutes differ extremly.

17 Foley, M., 'UTV threatens legal action'; The Irish Times, 12 June 1998.

18 Linehan, H.; 'RTÉ 1 to launch 24-hour schedule in autumn', The Irish Times, 24 July 1998.

19 Schwarzkopf, M. von, 'Je später der Abend...', The Irish Times, 10 June 1985.

20 32.5 per cent market share.

21 Linehan, H., 'TV3 hopes imporst will be a turn on', The Irish Times, 27 June 1998.

22 Mulqueen, E., 'CanWest enthusiastic about returns TV3 could bring', The Irish Times, 4 September 1998.

23 Foley, M., 'No surprises for young aspirers or comfy nesters', The Irish Times, 21 September 1998.

24 O'Halloran, M., 'Thirty digital channels on offer in new TV age', The Irish Times, 23 July 1998.

25 Pollak, A., 'TnaG man claims station is failing to attract viewers', The Irish Times, 5 October 1998.

15 of 15 pages

Details

Title
Development of Irish television
College
University of Bayreuth
Course
Irish Studies
Grade
1,7 (A-)
Year
1998
Pages
15
Catalog Number
V95522
File size
367 KB
Language
English
Notes
Tags
Development, Irish, Studies
Quote paper
Anonymous, 1998, Development of Irish television, Munich, GRIN Verlag, https://www.grin.com/document/95522

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