As of Thursday Ireland’s biggest commercial broadcaster has come under new ownership as both Canadian media group CanWest and struggling UK company ITV plc make their exit from the Irish market. The bid by Doughty Hanson valued the station at €265m with the private equity firm rumoured to be working on behalf of another company. However while TV3 itself is now profitable and its recent movement into the advertising sector certain to compliment that any new owner will face some tough decisions on the stations direction in the coming months and years; ones that could be the difference between boom and bust at TV3 HQ.
2006 is an interesting time for Irish TV; digital TV, home of multi-channel programming is now more popular than ever and the national Digital Terrestrial Television (DTT) trial, which will eventually replace the existing four-channel analogue broadcast is also underway; as well as this new media such as the internet is beginning to take viewers eyes away from their TV in favour of their PC. Besides increased levels of competition the station must also contend with the licence renewal process in 2008, at which point their current broadcast remit ends. Potentially more damaging however is that the content provision agreement with ITV, which gives TV3 it’s most popular programming, will run out in the same year.
In this changing media landscape in which tried and tested tactics are beginning to suffer TV3 would do well to learn for the mistakes of its past masters at ITV plc. For decades the ITV network was the most powerful voice in the commercial TV sector in Britain; offering viewers a wealth of compelling and entertaining programming and advertisers an endless supply of potential customers. The explosion of multi-channel TV in the 1990’s as well as the growth in other media in recent years has changed that however with the company now struggling to maintain its position as a major player in the UK TV market.
TV3 is now in a similar situation to the one ITV found itself in during the 1990’s. In the same way that ITV lost its lions-share of the UK commercial market due to the rise of new British channels, TV3 can now no longer claim to be Ireland’s only commercial TV station. While cable take-up in Ireland is far higher than it has ever been across the water the only additional channels previously available were imported broadcasters like the BBC and Channel 4. Since 2004 however three new Irish-based commercial players have come onto the scene, each one targeting a different niche in the market. Once DTT is fully functional TV3 is unlikely to be the only commercial broadcaster on the Irish terrestrial platform too.
In reaction to its competition problem, ITV, which earned a strong reputation from modern classics such as Spitting Image, The Prisoner and Cracker, moved into new programming like reality TV where production costs were low and revenue streams from phone-voting and competitions were high. More recently ITV launched ‘Play’, a digital-only channel that broadcasts interactive quiz shows featuring premium phone numbers and easy questions. As a result of its content shift ITV lost its name as a home of quality production and in the process lost its bankable identity. In more recent times it has seen its profit margin shrink and its market share drop to 16.3%, the lowest in the company’s history. Only now, with boss Charles Allen on his way out is drama becoming the stations focus again.
New Irish broadcasters like Channel 6, alongside the increased popularity of UTV in the Republic of Ireland are likely to be the greatest threat to TV3’s revenues in the near future and it would be foolish to assume other Irish commercial channels will not appear on the market in the next year or two also. Imported programming, regardless of its origin is becoming easier to see before the ‘official’ Irish broadcast on channels like RTÉ and TV3. It may be from foreign channels available on Sky and NTL/Chorus and it could even be online; iTunes in the USA currently offers legal downloads of hit shows from NBC, Disney, Fox and MTV and a similar service being made available in Ireland is only a matter of time.
The only way TV3 can secure its viewer-ship is if it takes its weight of the crutch of imported television and makes a serious move towards real home-grown drama, documentaries and comedy; something that it shows no sign of doing judging by its Autumn schedule. Phone-in competitions, imports and reality TV may seem like the most lucrative option for a quick buck but they only offer short-term viability and more importantly they are easily replicated by rival broadcasters. Unique and original programming is the only way for TV3 to ensure it has an upper hand on its rivals and while it has next to no long-term track record with home-produced content outside of sports and news it still has the advantage of a strong profit margin and decent facilities; something the likes of Channel 6 cannot yet boast and both of which may come under threat if the lazy option is taken as multi-channel Ireland becomes the norm.