Keep calm and Corrie on - it's man Vs machine at TV3
Ahead of the launch of its new autumn schedule, TV3 boss David McRedmond tells Donal Lynch how he'll fight off the new rivals of UTV and the old boys of Montrose
Published 24/08/2014 | 02:30
It's the week before the launch of TV3's autumn schedule and and David McRedmond and I are standing in the channel's sleek and faintly space-age HD studio in Ballymount.
TV Free (as they're sometimes called for their . . . erm, lean budgeting) in HD? It all seems as unlikely as Ryanair doing first class canapes - and indeed McRedmond compares TV3 to the low-cost airline. But in fact the new technology is itself geared toward lowering costs - they even got the cameras nearly free in a deal with Sony - and the studio has been a huge morale-boost for the station just when it needed it most.
It cost in excess of €4m to build and is the only one in Ireland - RTE and several foreign television companies, as well as ad makers, have already rented it for their own productions.
As part owner and CEO of the TV3 Group, McRedmond has both a personal and professional stake in it and is justifiably proud of his new toy. The new show they're about to film here this week is called The Algorithm and its tagline is 'man versus machine.'
It's an apt description of McRedmond's own challenges during his tenure at the helm of TV3, which is often thought of as the plucky underdog up against the might of domestic and foreign competitors with deeper pockets.
For years it seemed that McRedmond had but one corporate machine to derail - the State broadcaster and its greedy hoovering-up of advertising revenue. But just as that front recedes slightly (thanks to a Competition Authority ruling which forbids RTE from offering a discount to advertisers when they increase their spend with the broadcaster) another has opened up in its place: UTV Ireland which has just snaffled the Holy Trinity of Coronation Street, Emmerdale and Jeremy Kyle.
Between them, these three programmes accounted for a fifth of TV3's viewers - and Corrie was the most watched programme of all on the channel. Combined with this there has been a veritable exodus of executives to UTV (five of them left this past May). It all came just as the network was beginning to recover from the worst of the recession.
And on the day McRedmond and I sit down, news comes through that Pat Kenny has inked a deal to do a show with UTV. The heat is being turned up in TV land.
McRedmond, naturally sees things quite differently.
Back in his huge corner office, he valiantly describes the loss of these heavyweight schedule mainstays as a blessing in disguise. He points out that an entire audience doesn't automatically move the dial just because a programme has moved channels - as TV3 itself learned when they themselves bought the soaps in the first place.
But more than that, he says that freeing up the colossal amount of money that had to be spent on the rights will enable TV3 to do other things, which have long been on the agenda.
"The reality of the ITV contract is that it was becoming increasingly loss-making and the ratings were falling, for Coronation Street in particular. It came down to a choice: do we pay more for ITV content, or do we invest more in our home productions, in origination in Ireland, in the independent sector.
"Doing both wasn't possible and I can tell you the future of commercial broadcasting can't be built on the mid-break on Corrie. Over 50pc of our schedule next year will be home produced and we're spending over €30m on original programming."
Fighting talk. But wasn't the lack of spend on original, home-produced programming exactly the same reason cited by former head of programming Ben Frow as one of the reasons for leaving the network in late 2012? Is TV3 really going to start nurturing local talent and move its emphasis away from the blockbuster imports, which have long been its meat and drink?
"What you will see in our launch is that actually our acquisitions have been more precisely targeted toward our natural demographic," McRedmond tells me. "We're the leader in the under-45 age demographic in this country.
"We have the X Factor exclusively. We have Britain's Got Talent exclusively. We have Downtown Abbey. And of the amount spent on Coronation Street, Jeremy Kyle and Emmerdale, about 85pc of that will go back into original programming.
"It's addressing the exact problem that Ben Frow faced. How do we play to what we know is our strength? Jeff Ford, who's come in as head of programming, has done an amazing job. He's taken it to the next level with these big co-productions."
If McRedmond seems valiantly upbeat it might be because it seems that he has already weathered worse storms than the loss of Corrie in his eight years at TV3.
After a bleak few years of redundancies and plummeting ad revenues in Ballymount things are looking slightly more positive. Salaries are "competitive", he says. He won't be drawn on his own salary but tells me that it is "comparable" with director general of RTE, which might put it in the €250,000 bracket - though he earned so much more in his previous job, that seems unlikely.
The energy in the studios is palpable. Advertising revenue forecasts are positive, 3 Player has been a huge success - and while they have lost GAA rights they've won the rights to the Rugby World Cup. McRedmond is also excited about acquiring the rights to UFC which reached about 600,000 people (about 21pc of the available audience) for Dubliner Conor McGregor's recent fight.
McRedmond is also bullish about their much-vaunted new soap Red Rock, for which product placements rights are being sold.
"For 20 of the 21 broadcast hours TV3 is the number one or number two channel," he tells me. "We're a bigger and stronger brand than people think. You see that in the sheer size of our audience. We can see that the strategy that we followed through the recession is really starting to deliver.
"We have the biggest story in drama with Red Rock. With sport we have the biggest story with the Rugby World Cup. Sean O'Brien will be our ambassador for that. We also have Downton Abbey and have just acquired Broadchurch. We've also trebled the share for 3e. We have the support of the 15- to 45-year-old audience. Because of the support of Jeff and Pat Kiely [the TV3 Group commerical director] we are seeing the fruits of our hard slog through the recession. But we're not out of the woods yet."
Could we be about to see the exit of Doughty Hanson which acquired TV3 for €265m in 2006? Last year TV3 announced the sale of its corporate debt to the private equity firm and the corporate debt of TV3's parent, Tullamore Beta, was also included in the sale of IBRC's assets by the special liquidators, KPMG. The debt was sold through an open auction process, with the bid by Doughty Hanson being majority financed by BlueBay Ireland Corporate Credit Limited.
At the time McRedmond said that the sale brought to an end an "uncertain" period for TV3. Private equity firms like Doughty Hanson are in the business of making money and will sell out at some stage. "They will do it when they feel the time is right."
Doughty Hanson sounds quite like 'Daddy Hanson' when said quickly - I wilfully mishear it several times - but while it was the private equity giant that brought McRedmond to TV3, it was perhaps his own father that gave him the sense of what it might be like to shape the workings of the national media.
Louis McRedmond, a former editor of the Irish Independent and once head of information at RTE, was widely regarded as one of the outstanding journalists of his generation and was naturally a huge influence on his son.
In his youth David attended Gonzaga College in Ranelagh and completed an arts degree before leaving for London - "it was the only option open I thought" - where he meet his future wife, Penny. It was also in London that he would take the first steps in his career.
"I thought I'd be a correspondent with the BBC or the editor of the Guardian, that sort of thing," he laughs.
When that didn't work out he took a job at one of the first outlets of the Waterstones chain of bookshops, and came under the wing of founder Tim Waterstone, quickly riseing through the ranks to become operations director of the firm. It seemed like an extraordinary ascent for someone with no formal business education - but McRedmond tells me it felt entirely natural.
"When you run a bookstore, or any retail outlet, it's actually a great microcosm to learn business in," he tells me. "It's about cashflow, inventory, and management - you have this constant flow of people. I'm sure an MBA would teach you a lot, but a few years on a shop floor is also a great way to learn."
He was sent to the US, where he worked in Boston for the bookstore chain. WH Smith had acquired Waterstones and more outlets opened in Chicago. McRedmond came back to London where he filled gaps in his business education, attending INSEAD and a leadership programme under WH Smith's guidance. He moved back to the US, this time to Atlanta to run WH Smith's travel retail business with huge success.
In 1999 he was head-hunted by Eircom and came back to Ireland the following year in the midst of the "chaos" around the IPO.
"Valentia came in and Tony O'Reilly and I then sold off all the non-core business for them and I think that did well for Eircom," he tells me. "I was asked to stay on as commercial director. I stayed for the next five years, with all the changes that happened."
It turned out to be quite a lucrative move. Eircom directors eventually made around €7.8m from the sale to Babcock & Brown, with McRedmond reportedly pocketing €833,000 from cashing in his share options. The money partly enabled him to buy an apartment in Hampstead in London, which he still regards as an important base, having retained a strong connection with the the city.
Day to day he lives in Glenageary, and tells me that Penny made two conditions when moving home. First, that they would live near the sea, and second, that the kids could walk to school.
His son is now working for an Irish start-up in the US while his eldest daughter is at Cambridge. "Look, I lead a very nice life, in a nice house, not a huge house, just outside Glasthule village," he tells me. "I swim in the 40 Foot, I'm a man of simple needs. My passions are books, films and culture. If I didn't do that, then life would be a bit dull."
I wonder aloud that, if Doughty Hanson exit, will McRedmond also jump ship? He remains tight-lipped.
"I love this job and I love the entrepreneurial scale of a company like this. The challenge here is present every day. You're close to every aspect of the business. The team here is first class. We're a bigger brand and a stronger brand than we're ever given credit for. We want to push this on and get bigger - and I'm in that for the long haul."
Does financial insecurity drive success?
My management style is... "driven, passionate and quite tough to work for. But I'd like to think people trust me and recognise what I do is done with a passion for the business. I think people respect you once they see you're committed."
My favourite share is... "I don't trade shares for the simple reason that if you're an individual trader in shares you are actually at the tail-end of a very long line of people who know more than you do. Unless you know everything at every minute of every day you're not going to do well."
If I could give my younger self any advice it would be... "Write it all down. Because that might be a way to learn about what is happening. Something I have gotten better at as I've gotten older is to review things. When you're younger you just move on."
The most important thing that money has bought me is... "Well, I might have said financial security - but I actually think that financial insecurity is a great driver and engine for success.
"I don't know about money but my career has bought me the means to live in different places around the world. That has benefited me hugely."
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