The potential of digital television was highlighted at a recent conference in Dublin, but its economic viability in Ireland at present is highly questionable.
The irony was quite clear given that the major foreign stakeholders in digital television, BSkyB and Channel 4, were present and our national broadcaster, RTÉ, and Ireland’s two cable companies, NTL and Chorus, were noted for their absence. This should come as no surprise given the financial crisis in RTÉ and state of the global telecommunications market.
The conference itself rightly considered the enormous potential of interactive television using digital technologies such as short messaging services, but the prospects of a full Irish digital terrestrial television (DTT) service are not good in the current climate.
Digital television offers customers better picture quality and can supply a range of interactive services such as betting or sending emails.
The promise was clear for digital television in Ireland or so we were told. The idea has been around since at least 1997. It was specifically provided for in the Broadcasting Act, which finally passed into law in 2001 following a year-long delay caused by squabbling over the ownership of the proposed network. More than two years later, the Government has still not awarded a licence to operate the service in Ireland, despite running a 12-month tender.
The sole bidder for the licence, a consortium known as It’s TV had not been able to satisfy the Government that it had the necessary financial muscle to fund a network. According to Peter Branagan, formerly RTÉ’s head of digital development, who headed up the consortium, DTT on its own would not be a viable commercial proposition: “From the outset we said that we wanted to provide broadband and the internet as well as digital television, so we didn’t think that DTT on its own would be a viable commercial proposition … but they [the Department of Communications] could not issue the license in the form that could be commercially viable.” He adds that at some stage in the future, the Government may re-run the competition. There is, however, no confirmation that this will happen.
It seems that an Irish DTT network is now little more than a dream. Media analysts believe that it would cost up to €120m to fund the construction of a digital terrestrial network, subsidise set-top boxes for consumers and market the digital television service.
The difficulties in establishing a DTT network have also impacted on RTÉ. It was running a separate tendering process for the sale of a stake in its transmission network. Despite attracting a shortlist of three firms, the tender has stalled, with most analysts believing that it cannot sell the network before establishing whether a DTT is feasible.
RTÉ’s cash crisis has left its own digital plans – such as a 24-hour news channel and a youth channel – in disarray. These new channels would have cost RTÉ about €72m by 2006, but were put on hold last year when RTE’s director-general Bob Collins said that he could make ‘no prediction’ about digital television amid the station’s worsening financial position. It seems that an Irish DTT network is narrowly clinging to life.
According to the Commission for Communications Regulation’s (ComReg) quarterly report, more than a quarter of Irish householders now subscriber to digital television services. The report shows that the number of cable users has slumped to 552,000, down from 615,000 a year ago. The huge drop in subscribers to cable television systems has been accompanied by a comparable increase in the number of people subscribing to BSkyB. The report says 272,000 people now subscribe to BSkyB, an increase of about 79,000 users in just 12 months.
The success of BSkyB’s digital presence in Ireland was highlighted at the conference, which was organised by Digital Media Intelligence. Mark Deering, BSkyB Ireland manager, confirmed a €100m investment by the firm into the Irish market. “Ireland is behind in the digital television revolution but it can benefit from experience,” he said. BSkyB’s operation was also given a major boost last year when RTÉ signed a controversial deal for carriage on its satellite platform.
The company is beginning to deploy its interactive television services such as GamePad, SkyBetLive and Sky News Interactive in Ireland, which was launched last November. “At the moment, we have 750 calls a day and 1,000 at the weekends. And by all means that is a very good start,” Deering added.
BSkyB is gaining a greater share of the Irish market and it looks set to dominate digital television services in Ireland, that is, unless the Government rapidly revives its DTT plans and ComReg proceeds speedily with an EU directive on regulatory control.
Stemming from the EU, ComReg ruled earlier this year that all broadcast service providers in Ireland, including BSkyB, will be subject to Irish regulatory control. BSkyB is challenging this ruling. If unsuccessful, it will have to pay regulatory costs to ComReg (3.5pc of their Irish sales) and will be subject to Irish law. If successful, BSkyB will continue operating in Ireland and will not be subject to Irish regulatory control. Many stakeholders in the Irish digital television market, not to mention BSkyB itself, are eagerly awaiting this decision.
The Minister for Communications, Marine and Natural Resources, Dermot Ahern TD, has floated the idea that Irish DTT might be re-launched using a similar business model to that employed by the UK’s Freeview. “An all-island service based on the existing UK Freeview model or on a new satellite platform offers the synergies we need. We must work towards that goal despite the changing broadcasting landscape,” Ahern said at the Celtic Film and Television Festival in Belfast last week.
It is believed that studies are under way at the department re-examining exactly how DTT can be financed from a proposed commercial TV licence. Ahern has previously mooted the idea that customers could pay a once-off fee of €160, with nothing further to pay. A new commercial licence that would be paid by all premises such as pubs and hotels showing television to the public has also been suggested.
However, the decision by the BBC to roll out free services on satellite from next month means that the minister and his officials will have to review their plans. People in Ireland will be able to receive eight BBC digital television channels and all its radio stations free of charge from 30 May if they own a satellite dish. This will increase competition in the market, but it may undermine the cable and satellite firms, NTL, Chorus and BSkyB.
“The delivery of television services is changing. The BBC decision has serious implications for Ireland as the footprint or coverage area of the satellite services would include Ireland. We have to factor the BBC decision into our considerations when looking at the options available,” the minister said.
By Lisa Deeney
Pictured: Mark Deering, BSkyB Ireland manager: ‘Ireland is behind in the digital television revolution but it can benefit from experience’
