Television wars: U better get used to it
Viewers are set to be the big winners as UTV enters the Irish market
Big-name broadcasters licking their lips at the news that UTV is setting up a television station in the Republic should not get too excited just yet. Hopes that a new entrant with deep pockets would flash the cash in the way Newstalk did with Pat Kenny this summer are likely to be dashed.
"While I wouldn't rule anything out," says Michael Wilson, managing director of television at UTV plc. "It's far more likely that we will cultivate our own talent rather than try to lure people who are already established somewhere else."
UTV surprised even seasoned media observers with the news this week that it was planning to launch a dedicated station for the south in early 2015, but, according to Wilson, the company has coveted entering the market here for almost a decade.
"UTV is the oldest commercial television broadcaster on the island of Ireland," Wilson says, of a station that began life as Ulster Television in 1959, a full two years before RTÉ was launched. "And with the brand very well known to people in the Republic, we feel we can hit the ground running."
While some see the move as an indicator that Ireland's economy is picking up, others feel that UTV will be joining a crowded market all vying for a share of depleted advertising revenues and an audience that has been splintered thanks to hundreds of available channels and the advent of services like Netflix.
But with UTV securing the exclusive Irish rights for Coronation Street and Emmerdale from parent company ITV they are bound to take viewers from TV3, the current Irish home of both long-running soaps.
"TV3 are likely to feel the brunt most," says media analyst Tom Felle. "While they have developed their own shows like Tonight with Vincent Browne and Xposé, the likes of Coronation Street pulls in far more viewers. And that's what appeals to the advertisers."
The most-watched programme on TV3 last year was an episode of Coronation Street from January. The station's 20 most-watched programmes feature 'Corrie' and Emmerdale prominently.
Felle, the head of the school of journalism at Limerick University, believes there are few signs that advertising revenue will have increased in 18 months' time, when UTV Ireland goes on air.
"Spend is down 40pc on what it was six years ago at the height of the boom," he says. "To use the cliché, the pie is going to stay the same, but the slices will get smaller. It might pick up by a small amount but it won't be anything like the spend in the boom years."
Wilson is confident that UTV Ireland can move into profit within a year. "I don't want to be glib, but we're not in the business of losing money. We will be offering the consumer more choice, especially when it comes to news and a nightly one-hour news bulletin will be a big selling point for the station." Such a programme is likely to air at 7pm in order to capture commuters who don't get home in time for RTÉ's flagship Six One bulletin. It is the only Ireland-only show announced so far.
Currently, UTV owns six radio stations in the Republic, including Dublin's FM104 and Cork's 96FM, and Wilson feels this presence – which began in 2001 – will be invaluable when it comes to news-gathering for the TV channel. "We certainly won't be doubling up," he says. "We have resources already that will be tapped into, but we will be creating more than 100 more jobs, too."
The UTV man may talk a good game, but so does TV3's MD David McRedmond, who is bullish about the future. "I'd be concerned if this was happening [UTV entering the market] in two months," he says, "but there's a long lead in time and we have lots of exciting plans, including our own soap which we're in the process of commissioning, and we have made several high-quality documentaries which will be screened over the next few months. The percentage of home-produced content here is rising all the time.
"Coronation Street and Emmerdale have been costing us a lot of money, and the audience share isn't as high as it was – the ratings are down about 20pc in five years. Don't forget that we'll still be holding on to very popular shows like The X Factor and Downton Abbey, which are not ITV productions. And we'll have Champions League football, too."
TV3 announced an operating profit this week, but the company remains mired in debt and cited 2012 and early 2013 as its "most difficult trading environment".
In fact, UTV has regularly been cited as a potential purchaser for TV3, which has been owned by Doherty Hanson since 2006.
UTV will be the most significant entrant to the television market here since 2006 when Sky set up an Irish-specific network, Sky News Ireland. But that venture ended within two years, despite considerable resources and the poaching of Gráinne Seoige from TV3.
The former Channel 6 is now owned by TV3 and rebranded as 3e but its audience share is miniscule and it has a smaller reach in the Republic than UTV – with its Northern Ireland-specific content, such as Lesser Spotted Ulster – currently has. And the Dublin-based City Channel failed to make significant inroads and closed in September 2011 after filing for bankruptcy.
Michael Cullen, editor of Marketing magazine, believes UTV's imminent exclusive ownership of Coronation Street, Emmerdale and The Jeremy Kyle Show is essential for it to make it a serious player in the Republic.
"All the talk about home-grown content is well and good," he says, "but at the end of the day the only thing that advertisers care about is audience and those programmes pull in an audience, especially housewives who still tend to be the main purchasers of FMCG (fast moving consumer goods) brands that make up the lion's share of ads you'll see on TV during prime time slots.
'And don't forget that these soaps are aired over multiple nights during the week which ensures a sustained, loyal audience. TV3 will certainly be happy to hold on to the likes of Downton Abbey and The X Factor because advertisers love these programme and will spend.
"The advertising market has suffered enormously during this recession and all media – not just television – are seeking their share of a depleted revenue. That said, if UTV can get a strong foothold here, thanks to these soaps and perhaps a good news programme, they could be well placed to capitalise when the market picks up. But that will be later, rather than sooner."
Meanwhile, Wilson believes UTV will – to borrow Newstalk's Pat Kenny-inspired ad campaign – encourage viewers to turn the dial. "Choice is paramount," he says. "And our entry to the Irish market will give the consumer more choice when it comes to programming and news. We know we can deliver programmes of the highest quality and we are confident that we can make our presence felt.
"We have had an impact on the social life of this island since 1959 and we hope to be here in 2059, bigger and better than ever."