Why advertisers win – UTV’s launch of a new TV channel in the Republic of Ireland
UTV has announced its plans to launch a new TV channel in the Republic of Ireland. The new channel which is to be launched in 2015, is predicted to break even in its first year and become profitable by its second. So what does UTV’s announcement mean for the existing media landscape?
Advertising Revenue
In terms of advertising revenue, a new TV channel which is part of the growing UTV family will command a strong negotiating position when it comes to securing international shows. This will mean that existing stations such as TV3 and RTE will loose some of the staples in their broadcasting schedules. Such losses will inevitably have a negative impact on advertising revenue, testing both stations, but especially TV3.
From an advertisers perspective this new competition will most likely lead to a reduction in some ad rates, allowing firms to secure additional airtime at a reduced cost. It will also mean new shows to fill old slots and to populate new ones. For brands this change will bring new opportunities to communicate with audiences through product placements and advertising.
Is there space for state competition?
The elephant in the room is the fact that RTE (the state funded national broadcaster) is still competing with commercial stations for advertising revenue. RTE is well known for it’s high operating costs and the argument that it should be funded by the state and also take potential revenue from non-state broadcasters is likely to become increasingly heated over the coming months. A move by the state broadcaster to a non-competitive model similar to the BBC would be the fairest outcome for commercial broadcasters, but it’s unlikely that the national station could sustain such a loss in income.
Ultimately UTV’s announcement is a positive development for brands, communications professionals and the consumer. With that said the next 24 months is likely to shine an increasingly harsh light on the role of the state broadcaster RTE and it’s commercial operations.
Brian McCarthy
Brian McCarthy is the Sales & Marketing Director with Newsaccess Media Intelligence, based in Dublin 2. For more information on Media Monitoring & Analysis contact Brian at: mccarthyb@newsaccess.ie or 01-6799403
