UTV's €25m plan to take on RTE and TV3 should be a thriller
As the scramble for ad revenue starts, northern channel's Irish play is the least of TV's worries, writes Roisin Burke
Published 10/11/2013 | 21:30
WHAT is UTV playing at? That is the question on the lips of everybody in TV since it revealed its new Irish channel plan on Wednesday.
Is the Northern Ireland broadcaster calling an upturn with spectacular foresight on the blitzed TV advertising market – forecast to actually grow for the first time since 2007 next year – or has it something else in mind?
Fighting back, TV3 briefed media agency bosses that same day that it would put the guts of the €15m it is saving by ditching its loss-making rights to Coronation Street and Emmerdale into new, original home-grown programming, including the ballsy plan to make its own new soap opera.
UTV's snatching of the jewels in TV3's programming crown is the biggest ever acquisition deal in the Irish TV market, suggesting the broadcaster paid possibly €20m for it.
With its stated plan for the new channel to break even in its first year in 2015 and be profitable in its second, it has its work cut out.
It is estimated it will need to shell out €25m a year on staff and content to do what it says it wants to do: take on TV3 and RTE and win. An ambitious mission starting from its Republic of Ireland audience share base of less than 3 per cent.
Advertising revenues from Coronation Street and Emmerdale were worth about €8m to €10m to TV3, with Jeremy Kyle and other shows bringing that up to a further €12m.
Local programme making will also be at the heart of driving viewership at UTV Ireland, chief executive John McCann told the Sunday Independent.
As well as one hour of original news and current affairs programming it will invest further in original home content.
And it won't be of the cheap-as-chips Tallafornia variety. "Oh no," the sedate Ulsterman says emphatically.
"The best way of looking at it is the programming that we do in the North, and that doesn't tend to be Dublin housewives' style."
Will UTV staples such as farming reality show Rare Breeds and Nationwide type programme Lesser Spotted Ulster help it win an epic ratings bloodbath this side of the Border?
"UTV are cash rich enough to do this, but whether their owners will back it is another question," says Bill Kinlay, of media buyer Mindshare, regarding big potential investment in programming making.
Major stakeholders are FL Partners, the equity group that sold luxury yacht maker Sunseeker for €168m and Shane Rehill's TVC Holdings.
The whole venture seems risky.
Sky News Ireland launched into an economy and ad revenue market that was booming. It survived two years. Channel 6 resorted to screening porn to survive before being absorbed by TV3. City Channel folded.
But the UTV move – subject still to a broadcasting authority approval – is the least of an embattled TV advertising industry's woes.
Audience for juggernaut soaps has plummeted in the past five years by 20 per cent. And the whole 'housekeeper' advertising audience category is dwindling in value as FMCG (branded household goods) come under pressure from own brands and cash-conscious householders.
But adversity is also opportunity for TV3.
It has talked with some of the most distinguished names in programme making about creating its own new soap opera, including the more youth-oriented Hollyoaks maker Lime Pictures.