TV to plug a gap in Eire’s market

A new TV station, backed by the millionaire manager of global rock stars U2, is about to launch in Ireland.

But this isn’t about Bono and his band taking to the airwaves. This is a partnership between some of Ireland’s most astute businessmen and a Canadian multinational broadcaster with a winning formula for setting up TV stations.

With a positioning sounding remarkably like our own Channel 5, TV3 launches on Sunday, September 20 as the first Irish commercial competitor to state broadcaster RTE (which is funded partly by a licence fee and partly by advertising).

Twenty per cent of the new channel will be owned by a consortium including U2’s manager Paul McGuinness and James Morris, the managing director of Ireland’s largest production company and the chairman of London production company The Mill. A further 35 per cent will be held by ACT, an Irish venture capitalist.

But the commercial driving force behind TV3 is CanWest, with a stake of 45 per cent. The broadcaster, which failed to win the bid to run the Channel 5 licence, has successfully applied its corporate methods to launching new stations in Canada and New Zealand.

Now it has sent its own “commando team” of experienced executives to Dublin. In the past eight months, they have overseen the recruitment of Irish managers and staff, the setting up of sales and marketing, and the move to a 20m digital studio transformed from two warehouses on an industrial estate near the Dublin suburbs.

Rick Hetherington, Canadian chief executive of TV3, says: “Our business in TV is being in the advertising business. We outsource all our programming other than news. We don’t have one hand in the government purse like RTE. It has to be a commercial decision to be here.”

TV3’s backers believe there is a yawning gap in the market for a station aimed at 15- to 44-year-olds, because more than half of RTE1’s audience is over 45, while nearly half of the state broadcaster’s second channel, Network Two, is under 25. TV3 has stolen Channel 5’s clothes and declared it will be “modern mainstream” – neither a traditional, mainstream broadcaster such as BBC1, UTV or RTE1, nor modern and niche such as the satellite channels, Channel 4 or Network Two. The majority of TV3’s entertainment programming is Anglo-American, such as imported programme Merlin, but the backbone of the schedule will be Irish news and current affairs.

In Ireland, 71 per cent of homes are multichannel, with viewers receiving cable and satellite, BBC1, BBC2, Ulster TV and Channel 4 and possibly even TnaG, an Irish language channel based on the West coast. Many viewers do have a choice in what they watch, but they have very little choice in terms of specific Irish channels.

Meanwhile, 30 per cent of the country lives in rural areas which can only receive RTE. In a country where the news is dominated by London and Ulster, TV3 sees a great opportunity to offer more choice of news for the Republic.

The channel is investing significant resources in its own extensive news gathering operation, with 40 full-time and 30 part-time journalists and a glamorous line-up of Irish presenters, including Gillian Ni Cheallaigh, Grainne Seoige and Alan Cantwell.

The aim is to redress the lack of Irish national news on the BBC and UTV and also provide a youthful alternative to the more traditional news bulletins on RTE. TV3 hopes another key attraction will be Irish sport – it has secured the rights to show Ireland’s away football games in the Euro 2000 qualifying campaign.

For UK and Irish advertisers, TV3 will offer the first alternative to the virtual monopoly on commercial broadcasting in the Republic. RTE takes almost 80 per cent of the country’s TV advertising revenue, an estimated IR100m. TV3 is aiming to take 15 to 20 per cent of that, and a six per cent share of total viewing after one year. According to Hetherington, eight of the top ten advertisers, and 30 of the top 40, have already committed to spending money on the channel before Christmas.

TV3’s director of sales Pat Kiely says: “I think there is a lot of goodwill towards TV3 breaking the monopoly (of RTE). We won’t sit back and wait for money to come in.” Kiely is one of a number of senior Irish managers, including director of programming Michael Murphy, hired by CanWest. Kiely was poached from DDFH&B, the full service agency 28 per cent owned by J Walter Thompson, where he was media director.

The CanWest executives who have built TV3 from nothing will hand over responsibility for the channel to their Irish successors once it is running. Besides Rick Hetherington, Su Cammell, the CanWest manager in charge of TV3’s sales and marketing, was instrumental in setting up the new channel from scratch. She came over to Dublin from launching a CanWest station in New Zealand.

She says: “When we heard about this new project, everybody in the whole company was desperate to come over.” Cammell, a New Zealander herself, expects to stay until September next year. “If it goes well it’s better that I go early. I’ll go home and sit on a beach and see my family.” After 20 years working in TV, this is her third launch with Can West.

Having had just four weekends off in nine months, she says: “You have got to be reasonably focused…

If you didn’t love it you wouldn’t do it.”

Andy Bagnall, planning director at ITV sales house Laser Sales, has been similarly focused in winning the account to sell TV3’s airtime to UK media buyers. Bagnall, who also secured the account to sell airtime for independent ITV company Border five years ago, has taken a close interest in the Irish TV market for the past two to three years, looking for commercial openings. He first identified the opportunity with TV3 last year and pursued it doggedly, making numerous trips to Dublin.

“Mick Desmond (Laser’s chief executive) thought I was mad,” he jokes. “But the board has been very supportive. This is an extra stream of income for us.”

About ten per cent of TV3’s advertising revenue is expected to come from UK-based agencies, and Laser will give the channel a foot in the door in that market. The former head of sales for RTE in London, Michael Carter-Smith, will be responsible for the UK sales team.

TV3 will sell its airtime on a guaranteed cost per thousand basis, that is, it will give advertisers enough spots to deliver the number of ratings that have been agreed. At the moment, the Irish TV market is sold on a pre-emption system, where media agencies can outbid each other to get the airtime, making it very difficult to plan TV advertising.

Advertisers are notoriously suspicious of any new medium, they are often prepared to “wait and see” before committing themselves too heavily. In Ireland, this initial scepticism has been compounded by the effects of three recent media launches which flopped – two radio stations, called Century Radio and Radio Ireland, and the disappointing Irish language channel TnaG.

TV3 has told agencies that it is, in the words of its trade advertising, “On air not up in the air”. Over the next few months the media industry will see if its sales figures match its slogans.

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