Television
Some of the most dramatic headlines about the Irish media industry this year have come from the television market. RTÉ's television advertising revenues were down 35% in Q1 this year and similar falls are hitting other leading stations, such as TV3.
The difference in size between the Island of Ireland's TV markets is significant. In 2008, TV advertising in the Republic was worth about ¤363m (source: IAPI Adspend), while in Northern Ireland it was £74m (source: The Nielsen Company).
On RTÉ, the cost-per-thousand (CPM) adults is down by about a third on last year, while CPMs at UTV are down by about 20%, and the broadcaster is attempting to restructure itself with fewer staff. UTV's staff cuts have created controversy in Northern Ireland and RTÉ is having to make equally drastic cutbacks in spending, although it has not yet announced any redundancies.
Ironically for RTÉ, ratings are up, not just for daytime shows but also for evening news programmes, as more people - including many more unemployed - stay at home. Ann Corcoran, managing director of Dublin agency Limetree, says: "Most channels are seeing viewing figures up, with strong performances from Paramount and Sky."
However, Corcoran reports that - replicating the UK - multichannel is growing at the expense of terrestrial players. Steve Baker, broadcast director at Initiative Dublin, adds that off-peak viewing has been increasing faster than peak figures.
The most significant change in the market is the decision by RTÉ, which controls about 60% of the Irish TV advertising market, to introduce a fixed-price mechanism around its ad rates in an effort to stabilise declining ad spend.
However, advertisers are still reluctant to spend because consumers have tightened their budgets so severely. Joe Dalton, managing director of Precision Media, believes fixed prices may deter many smaller advertisers, who were enjoying airtime bargains while prices were floating.
TV3 is experiencing similar woes to RTÉ, since its rates are tied to RTÉ's, and it has also been making substantial cost savings. Last year, TV3 bought Channel 6 and rebranded it as 3e, but industry sources say progress with the new-look channel is slower than expected.
David McRedmond, TV3's chief executive, claims RTÉ is "screwing up the market" through its dual funding model, deriving revenue from both the licence fee and advertising.
Pioneering web TV
Meanwhile, TG4, which has pioneered web TV in Ireland, is holding steady with just less than 3% of the total audience. Setanta's future is looking increasingly shaky, after investors Doughty Hanson, Balderton Capital and Goldman Sachs failed to put up the full ¤100m it needs to meet the short-term obligations to rights holders.
About 60% of the television audience in the Republic already has access to digital TV, through Sky and cable operator UPC. The Boxer/Communicorp consortium pulled out of the contract to run the three planned national multiplexes, but the licence has since been awarded to the One Vision consortium, which includes Eircom, TV3 and Setanta.
The government plans to switch off the analogue signal in 2012. However, since all three companies behind the roll-out of digital terrestrial television are having financial problems, the industry is sceptical about how long it will take to bring DTT to market, or whether the service is even necessary.
Sky has almost 600,000 subscribers and 90% of its income comes from subscriptions rather than advertising. The pay-TV broadcaster continues to innovate, bringing many firsts to the Irish market, such as high definition and the Sky+ catch-up service, and 3D could be next on the agenda.
Sky has strong competition from UPC, which was formed from the merger of Chorus and NTL in 2007. UPC has invested ¤1bn in upgrading its network, its triple-play service and rolling out triple-play.
UPC's City Channel has strong local programming in Dublin and Galway, and is planning a weekly news programme for Waterford to reach 25,000 UPC homes.
In Northern Ireland, the commercial television market continues to be dominated by UTV, which last year had a peak audience share of about 29%, compared to the BBC's 21% and Channel 4's 4.8%. Last year, eight of the top 10 programmes in Northern Ireland were on UTV.
However, Tony Axon, media director at Belfast agency Navigator Blue, says UTV has been affected by the slowdown in its three main markets - London, Belfast and Dublin - meaning radio is now more important to UTV's turnover than television. UTV Media's interim statement for the first four months of 2009 showed its TV ad revenue fell 19%, but revenues at its Irish radio stations were up 25%.
Radio
Radio is one of the most resilient sectors in the Irish media industry, with ad spend in the Republic down 18% in Q1 this year compared to the same period in 2008 - far less than TV or press, which dropped 32% and 85% respectively.
Radio is a significant market sector in the Republic, last year generating ¤150m of advertising revenue. By contrast, radio advertising spend in Northern Ireland in 2008 was £11m (source: The Nielsen Company).
Joe Dalton, managing director of Precision Media, reports that radio is so affordable it tends to be on every media schedule and agencies no longer have a lead time of three to four months when booking campaigns.
John O'Connor, chief executive of Independent Radio Sales, says radio has been fortunate not to have been over-reliant on hard-hit sectors such as property. And Gary Power, director of OMD Dublin, believes radio should be able to increase its share of the total ad market this year, building on last year's share of 8%.
In addition, listeners in the Republic are at the top of the radio consumption tables in Europe. Each adult in the Republic listens to about four hours of radio a day, and only Polish radio listeners tune in as frequently.
The radio audience in the Republic is 55% dominated by commercial broadcasters, led by Communicorp, which owns five stations, including Newstalk and Today FM. State broadcaster RTÉ, whose radio businesses are jointly funded by the licence fee and advertising, owns Radio 1, 2FM, Lyric FM and Radio na Gaeltachta.
Weekday audience shares for Radio 1 and 2FM are about 22% and 12% respectively, while Lyric FM has a 1.7% share. Anthony Whittall, commercial director, RTÉ Radio, says: "We provide excellent value in terms of media spend. Cross-media solutions have also proved popular."
However, commercial radio media owners are under intense pressure to cut costs - to date, Communicorp has cut about 150 radio jobs in the Republic.
Frank Cronin, the new chief executive at Communicorp's Newstalk, is proud of the station's 3.5% national audience share and believes the move to Marconi House, the new Dublin city centre headquarters it shares with Today FM, has improved operational efficiencies.
Outside Dublin, one of the Republic's strongest commercial radio stations is Tipp FM, based in Clonmel, County Tipperary. The station has a 49% audience share in Tipperary and chief executive Ethel Walsh claims its audience is "loyal across all age groups".
However, in a sign of the recessionary times, classic rock station Radio Nova, which was due to launch in August, has put off its launch for another 12 months. Competition remains fierce, as IRS's O'Connor points out. He says: "UTV spent ¤50m acquiring FM104, only to see its lead eroded by Communicorp's Spin 1038."
Tougher than expected
The latest commercial station to launch is 4fm, which went on-air earlier this year, aimed at over-45s in Dublin, Cork, Limerick, County Clare and Galway. Martin Block, chief executive, admits ad sales have been even tougher than expected. He says: "Momentum is growing, but the entire media sector has been hammered."
Meanwhile, the digital radio market has expanded, but commercial broadcasters have been less keen on investing in digital than RTÉ Radio, which has six digital channels. RTÉ also claims it produces more podcasts than any other Irish station, with listeners downloading about 500,000 a month.
But digital radio has very few active listeners. DAB is well-established across Northern Ireland, where it attracts a small but expanding audience, but online radio is often more popular nationally, particularly with younger listeners.
In Northern Ireland, the commercial radio market is dominated by Downtown and Cool FM, acquired by Bauer Media Group in January 2008. Cool FM has a weekly reach of 297,000, while Downtown has a reach of 229,000, combining to give Bauer a 65% market share. Citybeat, owned by Cumbrian Newsprint Group, has a weekly reach of 134,000, while UTV Radio's U105 has a reach of 108,000.
National commercial stations broadcasting in Northern Ireland are Absolute, Classic FM and TalkSport. There is also substantial, if unquantified, overspill from the Republic's RTÉ Radio. Richard Ross, commercial manager, Downtown, says: "Ad revenues only started to slow down gradually at the start of 2009 and we are now looking at new revenue streams."
Tony Axon, media director at Navigator Blue, adds: "The growing contribution of the Northern Media Group, which owns six local radio stations, is encouraging and UTV's U105 has also shown an improvement."