Oireachtas Joint and Select Committees

Tuesday, 3 October 2017

Joint Oireachtas Committee on Communications, Climate Action and Environment

Pre-Legislative Scrutiny of the General Scheme of the Broadcasting (Amendment) Bill 2017 and Retransmission Fees: Discussion (Resumed)

5:00 pm

Mr. Pat Kiely:

On Brexit, probably anything up to 50% of the advertising investment in the Republic of Ireland comes from UK call centres and UK decision-making. It is being impacted on two fronts. The first is the lack of confidence. The advertising market is down in the United Kingdom, meaning investment is much more short term. The second concerns the foreign exchange. The sterling investments are showing up in Ireland. They are 15% to 20% lower than they would have been prior to the hit.

On advertising pricing, Deputy Lowry asked who polices advertising decision-making. In effect, it is self-policed because the advertisers go for value. It is typically managed by advertising agencies. Therein lies one of our issues with RTE's ability to dominate through State funding and then play in the advertising market. I have referred to RTE having 20 of the top 20 shows. The impact of that on the advertising market is that RTE has an ability to charge between 30% and 40% more than TV3, not because of poor salesmanship - some of the staff who do that job are present - and not because RTE is better at selling airtime but because it has 20 of the top 20 shows. How advertisers buy advertising across a range of broadcasters is actually quite scientific and sophisticated. The options have opened up. I was previously the commercial director and advertising sales was one of my responsibilities. Therefore, I can talk about it. When TV3 was launched, it was one of four channels that could offer Irish companies advertising on television. Now there are over 50. Senator McDowell should note that many have come through Sky's "opt-outs", as we call them. In many ways, Sky's opening up of the opt-out channels helped to grow the market. It goes back to the point I made about competition. We are not afraid of competition. We support a free market but it does get affected. I was asked specifically about pricing. RTE's prices are 30% to 40% more than those of TV3. Sky's pricing, because it has quite low-rating programming, is lower than that of TV3. That is the hierarchy but it is artificially affected by RTE's ability to command the top content.

On the question on regions, we would like to have more regional offices. There is no doubt about that. Under Virgin Media we opened up our mid-west office with Eric Clarke. We have Paul Byrne in Cork and Eric Clarke in Limerick, covering the mid-west. Ms Áine Ní Chaoindealbháin oversaw the expansion of the offices in Cork and Limerick.