Wednesday 23 August 2017

Ahead of schedule: Kiely is aiming for dramatic growth at TV3 with the help of soaps

TV3 boss Pat Kiely is going after RTE after getting Coronation Street and Emmerdale back on its schedule, writes Samantha McCaughren

Pat Kiely, managing director of the TV3 Group. Photo: David Conachy
Pat Kiely, managing director of the TV3 Group. Photo: David Conachy
Samantha McCaughren

Samantha McCaughren

Almost 20 years ago, Pat Kiely was a young advertising executive in leading Dublin agency DDFH&B when TV3 founder James Morris asked the company to do some work for the start-up television station.

At the time, new commercial broadcasting ventures were seen as risky. Century Radio had failed in the early 1990s and many felt that RTE had a unbreakable stranglehold on the television market. However, Kiely was excited by the possibilities of a new adventure on the other side of the media market and jumped at the chance to become a sales director at TV3.

He remembers well his first day in the new job in March 1998 in Ballymount off the M50. "I came into what was at the time a completely empty warehouse and Rick Hetherington, the chief executive, said 'We're going to launch a national television station in six months' time'. So, that was the 31st of March and the plan was to launch TV3 on the 20th of September and I think we all looked at Rick and thought could it be done?"

It was - and next year, TV3 and Kiely, now the broadcaster's managing director, will both celebrate 20-year anniversaries.

Located in the very un-showbiz surrounds of an industrial estate, TV3 is no longer a warehouse, although that may be hard to tell from the outside.

Since being bought by Virgin Media in late 2015, the group has been undergoing a multi-million euro upgrade, particularly in the area of technology.

A new HD studio has just opened which will broadcast Vincent Browne and a host of other shows.

"It's the most cutting-edge studio in this part of the world right now," he says on a walkabout, a reminder that broadcasting technology is being updated at breakneck speed and new developments come every month.

It has been a busy few weeks for Kiely who admits that back in 1998 he never envisaged such a long stay at the broadcaster, let alone that he would be running the station.

One of the biggest challenges in TV3's history was the 2015 arrival of UTV Ireland on the scene after swiping both Coronation Street and Emmerdale from TV3's schedule. UTV Ireland failed, however, and Virgin picked up the business - mainly the soaps and the slot held by the station. That is now rebranded as Be3 and the whole TV3 group underwent a rebranding at the start of the year.

Kiely, who is from Newcastle in Dublin, is naturally pleased to have the soaps back on TV3. "We've absolutely accelerated the growth trajectory of this business overnight by bringing in two of the most popular shows in the market," he says.

"You've got shows that regularly deliver anything up to half a million viewers. They are unique properties in the market."

When they originally departed TV3, the station put together a strategy to counteract the loss, creating critically-acclaimed garda soap Red Rock to replace them, among other things.

"I think a lot of people would have expected that if Corrie and Emmerdale came back into the business it would have seen us cancelling some of the Irish content," says Kiely.

"What we've demonstrated is a genuine coming together of two strategies as a very, a premium Irish quality schedule which will now be the better for having big moments like Corrie and Emmerdale's to drive extra audience."

The enlarged TV3 is very much going after RTE's position as the country's premium location for TV advertising.

However, Kiely believes TV3, with its increased Irish programming and major shows, now measures up well against its state-funded rival.

"This starts to level out the playing field a little bit for us," he says.

"The plan now is to draw in audience with the soaps, tell them about the rest of the schedule and keep the viewers for longer."

This isn't as easy as it sounds. Masterchef, for example, hasn't delivered the expected audience, which Kiely is disappointed about. It will move from Monday nights to Thursday nights, which should help.

However, Kiely says overall numbers for the TV3 group are very strong and will circulate a document to agencies next week showing that TV3 group's share of commercial impacts - a key industry measure - was neck and neck with RTE's in January.

"We very much see TV3 will be the number one commercial channel in commercial impacts," says Kiely. There is a bigger gap between TV3 and RTE in other measures, but share of viewing for TV3 was up 54pc in January.

It's a good start to 2017 and Kiely expects to see strong revenue growth in the year ahead. However, there were some nasty surprises last year, particularly with the Brexit vote. Kiely declines to comment on the revenues for 2016 but says the company was ahead of the market. "It was a year of two halves because the first half was ahead of expectation and it was very, very strong and the second half certainly was disappointing but we built a resilience within the business.

"We've also diversified our revenues, which is an important part of the model.

"We are significantly reducing our reliance on traditional spot advertising and replacing it with digital revenues, where we've seen great growth and areas like advertiser-funded programming."

The overall TV market is expected to deliver modest growth this year and Kiely expects TV3 will exceed the market.

TV3 now houses Virgin Media Solutions, which is spearheading much of the advertising developments of Virgin's set top boxes and video-on-demand (VOD) services both here and in the UK.

One of the big buzzwords in the advertising sector is addressable advertising, whereby broadcasters will increasingly target ads to individual viewers and viewers of the 3player in Virgin Media homes are already getting an element of targeted advertising.

"In buying TV3, Virgin also bought an advertising competency and a speciality in advertising and advertising sales that the group didn't have," he says.

While TV3 is getting a great boost from having the soaps back on the station, building up the former UTV Ireland station Be3 will be a challenge and some in the industry have noted that viewing figures are very small.

"I'm very happy with how all three brands have performed in January.

"It's now about the group. It's an international model where typically the main channel represents around 70pc (of audience)," he says.

He says Be3 is already ahead of Channel 4 and Sky One in terms of viewing. "We already have a channel that is of significant size and scale but it is the third channel in a three-channel play."

In order to service the three channels, the broadcaster is centralising its news resources and creating 3News Ireland. "This business has been starved of cash and Virgin's investment has meant we have replaced dated equipment.

"The next big development in terms of capital investment is 3News Ireland which will be a significant step-up in terms of the business's intentions around news gathering."

"We are looking at how we can develop it as a business opportunity in its own right. We would explore opportunities where we could provide services for other platforms." He points to ITN, which provides news services and content for other channels.

Its biggest programming investment has been in Red Rock, which is a multi-million euro project every year. Kiely says its funding options have been opened up followings its success on BBC and Amazon.

"Drama is very expensive and in order for us to develop the drama pipeline, we need to develop funding models," he says.

"We're working very closely with producers Elements and there is sufficient international interest now to explore future funding models.

"I think Red Rock will continue to build on its success and is likely to entice other interested parties to come to the table."

The next big project is a six-part €3m drama which will be co-funded by Virgin in the UK.

"Drama is a very attractive content genre for Virgin Media's VOD service so the group would be interested in us investing in drama."

Kiely notes that RTE is facing into challenging times, recording a significant loss in 2016.

"There seems to be a structural failure in there at the moment," he says.

"We believe there are opportunities we could serve viewers and the industry well by TV3 becoming a bigger players in some areas that RTE are dominant in at the moment. The work we've done in sport is an example of that. The work we're going to do in news," he says.

"That surely does raise some questions about whether viewers and consumers are being well-served by RTE losing money going after big international sports rights and content."

Kiely looks forward the next few years of rugby on TV3, which has the rights for the Six Nations between 2018 and 2021.

Looking to the future, he believes that technology will continue to have a significant impact on television viewing and its relationship with Virgin will by key to TV3 staying on top of that.

"We are lucky to be in the position to have a foot in both camps," says Kiely.

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