Proposal to enhance RTÉ’s Portfolio of Services
June 2018
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Contents
1. Introduction ...... 3
Context ...... 4
2. Proposals and Public Value ...... 7
Rationale and Fit with RTÉ Strategy ...... 8
3. Fit with Public Value Criteria as per S.103(8) of the Broadcasting Act 2009 .. 15
4. Impact on the Market ...... 23
5. Conclusion ...... 27
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1. Introduction
This document sets out an application to make changes to RTÉ’s portfolio of services. RTÉ is seeking ministerial approval, as it wishes to vary the number of public broadcasting services and make a change to an existing broadcasting service. Any such changes are subject to a Section 103 process, in line with the provisions of the Broadcasting Act 2009 (the Act).
Strategic Context
RTÉ Strategy
RTÉ has recently published its strategy setting out its plans for the coming five years, in Renewing RTÉ for the next generation, 2018-20221. This strategy was formulated pursuant to the requirements of the Act2 and following an extensive market and environmental analysis; and audience and output review, across all services.
RTÉ’s new Vision: To champion Irish culture by captivating audiences with trusted, engaging and challenging content; celebrating our country’s rich diversity; and cultivating Ireland’s talent.
The strategy sets RTÉ on a sustainable path where public service media (PSM) will be re- imagined for a new generation. RTÉ’s aim is to connect with and engage all Irish people, wherever they are.
On this path, RTÉ will continue to deliver high-quality, distinctive Irish content across its traditional channels and services, while it grows and experiments in the digital space. In an increasingly global and more competitive market, RTÉ will continue to put audiences at the centre of its thinking and will adapt to remain relevant to all audiences, into the future. RTÉ sets out to meet these audience needs and its legislative obligations to reflect and connect with the lives of all the people, by offering a comprehensive portfolio of services.
1 https://www.rte.ie/strategy/ 2 Section 124(8) of the Broadcasting Act 2009 3
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RTÉ’s strategy outlines how the organisation aims to evolve its services and content offering to meet changing audience needs, remain relevant to audiences, and exploit new opportunities that arise from changes in the market. RTÉ aims to give people more choice and control as to how, when and where they consume its content and services. The over-arching intention behind RTÉ’s content, services and distribution strategies is to put the audience first – knowing audiences, analysing their behaviours and anticipating their needs are critical to fulfilling RTÉ’s public service remit and implementing the strategy.
RTÉ’s services will be accessible on multiple devices and platforms to give people more choice of how, when and where they connect with and consume content.
In progressing delivery of its overall strategy RTÉ submits this proposal under Section 103 of the Act, to specifically address television broadcast services. Fundamental to the value proposition that publically funded content be easily accessible; an extended RTÉ One and RTÉ2+1 will serve to address the principles that underpin the service and distribution plans that RTÉ’s content and services are: • Universally available to Irish audiences • Available in a way that is convenient to audiences • Branded, easy to find and navigate • Delivered to the audience at the highest quality available
Context
Media consumers are faced with an unprecedented choice of global content, platforms and devices. This is creating a new, radically different and dynamic media landscape. New distribution models and a drive to control the provision of services are defining the business strategies of media companies, large and small.
While the wide and growing choice of content, channels, devices and platforms has driven a surge in media consumption and increased connectivity, this is not about the demise of linear media in favour of an on-demand world, now or in the future. A recent analysis by Mediatique (commissioned by the BAI) has predicted that Live TV will remain the major component of all TV viewing in 20223. Recent industry data on Irish viewing indicates that consolidated TV Viewing
3 Source: A report on market structure, dynamics, and developments in Irish Media – Mediatique 4
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accounted for 3 hours, 13 minutes a day of the average viewer’s TV consumption in 2017 – 5 minutes a day more than 10 years ago4. Viewing to broadcaster content (live + recorded TV and viewing to Broadcast Players) remains in excess of 85% of all daily Audio Visual (A/V) viewing5. There will however be continued pressure from new alternatives and RTÉ like many media organisations must adapt and develop an agile approach to survive and thrive into the future.
The range of devices available is creating the expectation that content should be available anytime and anywhere, yet research indicates audiences consume certain types of content over certain devices and this varies with life stage and high-speed broadband availability.
Television services will remain the backbone of media production and consumption for the foreseeable future. There is a greater need now more than ever to invest in and support the development of quality Irish content to serve all citizens of Ireland with home-grown content and Irish editorial sources. In order to support and sustain Irish culture and Ireland’s creative sector, quality local content and editorial coverage should be at the centre of the media ecosystem in the Irish market, within the wider context of a globalised media value chain.
The investment required to develop this indigenous content does not always make business sense for commercial services, as the yield or value returned may not be viable. Quality, home- grown and live Irish content carries a high cost. The contribution that a public service broadcaster makes to this is paramount and this objective is central to RTÉ’s public service remit (see also section 3(h) Media Plurality and Diversity).
Proposal
RTÉ will maintain the portfolio of digital television services it currently offers. This report elaborates further on RTÉ’s proposal for enhancement to an existing service and a proposed new service.
The following table summarises the proposed enhancement and change that RTÉ submits for approval.
4 Source: TAM Ireland Ltd, Nielsen TAM/AV mins per person, Adults 15+, Total TV, Consolidated, National 5 Source: TAM Ireland, A/V Data Solution data, all adults, TV households, all day, 2017 - Format by minutes across all devices 5
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Existing Channels and Services Proposals RTÉ One +1 To extend the broadcast hours of the existing service* Proposed New Channel RTÉ2 +1 To make a +1 service of RTÉ2 available
Research demonstrates that there is a clear demand for these services from audiences and the future success of Ireland’s national free-to-air media service, Saorview depends on an appropriate range of quality Irish content and services (see section 2. Proposals and Public Value, Meeting Audience Needs).
RTÉ has significant responsibilities in this context and is required to maintain and operate a national television multiplex (Saorview), as set out in legislation6.
* Note: The RTÉ One+1 channel will not become a separate and distinct channel with its own schedule; rather it will remain a stagger-cast channel and an exact replica of the parent channel, RTÉ One.
6 Section 130 of the Broadcasting Act 2009 6
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2. Proposals and Public Value
The following is a description of the proposed changes to RTÉ One+1, and RTÉ’s proposal to introduce a new +1 channel, RTÉ2 +1.These descriptions consider the public value of the changes and include a rationale as to how these services fit with RTÉ’s objects and strategy and meet audience needs.
RTÉ One+1
Description of proposed change to service
RTÉ One +1 is an exact replica of the RTÉ One channel, with a one hour delay; and currently broadcasts between the hours of 19:00 and c02:00 daily.
RTÉ is seeking the flexibility to extend the broadcast hours of the RTÉ One+1 channel to provide access to the off-peak schedule, where there is an audience need.
RTÉ proposes to extend the broadcast hours of the RTÉ One +1 channel on Saorview and other television platforms up to 24 hours. The minimum broadcast hours will be 06:00 to c02:00 daily, which would be an exact replica of the RTÉ One channel (from 05:00). However, RTÉ would like to retain the flexibility to scale the broadcast hours of the channel within the above parameters, subject to audience and scheduling considerations.
Impact on DTT multiplex Currently RTÉ One +1 shares a 24 hour broadcast channel slot with RTÉjr on the DTT Multiplex, with both channels operating part time hours. This proposal would necessitate the decoupling of RTÉ One +1 from RTÉjr in order to facilitate the increased hours to be broadcast by RTÉ One +1. Both channels would then be assigned their own 24 hour channel slot on the Saorview platform. There would be no impact on the provision of the RTÉjr service.
Clarification For the avoidance of doubt, the changes to the RTÉ One +1 channel do not involve the evolution to the “RTÉ Plus” channel proposed in 2010. The RTÉ One +1 channel will not become 7
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a separate and distinct channel with its own schedule; rather it will remain a stagger-cast channel and an exact replica of the parent channel RTÉ One.
RTÉ2+1
Description of proposed new service
RTÉ is seeking approval to establish a +1 service of RTÉ2 available to audiences on Saorview and other television platforms. The channel will broadcast between the hours of 19:00 and c02:00 on weekdays and up to 24 hours on Saturdays and Sundays.
RTÉ proposes to make a +1 service of RTÉ2 available, which would be an exact replica of the RTÉ2 schedule in peak-time (from 18:00) Monday to Friday, broadcast 19:00-c02:00 and initially broadcast from 12pm to c02:00am on Saturday and Sunday with a one hour delay. However, RTÉ would like to retain the flexibility to amend the broadcast hours of the channel subject to audience demand and for special events, particularly sporting events where the schedule requires this flexibility. Scenarios where this might apply include major sporting events and tournaments such as World Cup, Olympics or golf coming from other time zones.
Impact on DTT multiplex RTÉ 2+1, as a new service, would be assigned its own 24 hour channel slot on the DTT multiplex. This will allow the channel to broadcast in peak time Monday to Friday and 24 hours at weekends.
Rationale and Fit with RTÉ Strategy
It is important that RTÉ continues to bolster its linear schedules, while experimenting in the digital space, in pursuit of its public service objects. It is RTÉ’s view that the enhancement of RTÉ One +1 and the proposed new RTÉ2+1 service is both warranted and desirable and forms part of a wider strategy to enable multiple points of engagement with a broad portfolio of services.
The extension of the hours of RTÉ One +1 will increase the opportunity to access this flagship public service content, by widening it beyond the peak time schedule. 8
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RTÉ2 +1 seeks to address a demonstrable audience need and expectation (see section 2. Meeting Audience Needs) by creating increased opportunities to view RTÉ2 programming, as RTÉ One +1 currently does in peak time.
It is RTÉ’s responsibility to the licence fee payer to continue to keep RTÉ One +1 and the proposed RTÉ2+1 under review and to ensure any proposed enhancements are proportionate and sustainable, in an environment where media consumption habits continue to evolve and change.
The proposed extension of RTÉ One +1 and the provision of an RTÉ2+1 channel is consistent with RTÉ’s obligations; complements RTÉ’s portfolio of services offering; reflects the range and diversity of content; increases efficiency and value for money; and potentially generates a net contribution, before broadcast charges (see also section 4: cost and revenue projections and impact on existing public service provisions).
Meeting Audience Needs
These proposals strengthen the offering on Saorview, Ireland’s free digital television platform An extended RTÉ One +1 and RTÉ2+1 offers greater access to a range of culturally relevant content and more choice to the audience in the 661,000 Irish homes that have Saorview. Of these, some 188,000 are Saorview only homes7 (see also section 3(h) Media Plurality and Diversity).
+1 channels provide value, by offering the convenience of a form of time-shifted functionality RTÉ’s 2018-2022 strategy puts the audience first and aims to let audiences choose how, when and where they view, listen or consume content. In the current broadcast landscape +1 channels play an important role, offering a specific form of time-shifted functionality, which allows viewers to watch linear channels an hour later than the initial broadcast; providing another opportunity to view programmes at a time more suited to their lifestyle.
7 Source: Nielsen Establishment Survey, January 2018 9
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Despite the increased uptake of on-demand services including Web TV (Netflix, YouTube etc) and the ubiquity of PVR devices, live and near-live viewing remains the most important and frequently used method of audiovisual (AV) consumption for the majority of people. Live viewing accounts for 72%8 of the total "video day" for an Adult aged 15+. This reflects the fact that linear channel scheduling and marketing are designed to encourage linear viewing: programmes continue to be scheduled and promoted to appeal to specific audiences, at different times of the day (see also section 3(d) Meeting the Cultural, Social, Democratic and Other Needs of Irish Society).
Research demonstrates that life-stage is the key differentiator of the media needs of Irish people9. These life-stages or phases in people’s lives are drivers of attitudes and behaviour. There is a spectrum of needs, which vary across distinct audience segments. +1 channels can respond to some of these needs, such as the need to relax and unwind or to be empowered and up-to-date. For example: the parents in a busy family (with small children) might only get to sit down and watch TV after 9pm, on a weekday night. RTÉ1+1 enables them to watch ‘Home of the Year’ at 9.30pm; knowing that they could then easily tune into RTÉ2+1 to watch ‘This Crowded House’ at 10.30pm (no need to pause or record, etc), or earlier in the day, a young woman (under 45, with no dependent kids) would now have the opportunity to tune into ‘Today with Maura & Dáithí’ on RTÉ One+1 (which she would otherwise have missed), when she returns home from work at 5.30pm.
+1 channels provide a convenient catch-up service to meet the needs of people who do not use online catch-up services like RTÉ Player or do not have access to broadband. Although RTÉ Player uptake has been growing, recent research indicates that 47% of Irish adults (18+) have ever used the Player for catch up, with 25% using it on a weekly basis10. Furthermore, 12% of Irish households do not have a broadband subscription (fixed or mobile)11, so could not use online catch-up even if they were so inclined.
8 Source: TAM Ireland A/V Data Solution data – all adults, TV households, all day, 2017 – includes all forms of video, e.g. short form) 9 RTÉ Audience Segments 2017/2018 10 Source: B&A RTÉ Player Research October 2017 11 Source: https://www.comreg.ie/publication/quarterly-key-data-report-q4-2017 10
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RTÉ One and RTÉ2 offer a range of diverse public service content. RTÉ One is a focal point for major events, while RTÉ2 brings the nation and local communities together for the greatest sporting events. It is important that the digitally disenfranchised are included and served by the national broadcaster; and an extended RTÉ One+1 and RTÉ2+1 are key to this (see also section 3(f) Reaching Underserved Audiences).
+1 channels have become an audience expectation As the broadcast market evolves viewers experience a greater choice over when and where they can watch video content and +1 channels are seen as another viewing option, alongside catch-up and demand. Since Analogue Switch Off (ASO), increased spectrum availability has enabled the launch of many new +1 channels. In 2010 there were approximately 72 +1 channels available in Irish TV households. In 2018 this has risen to 104 +1 channels, one +1.5 channel, five +2 channels and one +3 channel. TV3 launched TV3+1 on Virgin Media in December 2014 and on Sky in April 2015. Such is their pervasiveness; these channels have become an expectation of the viewing public (see also section 3(g) Innovation).
Sky has recently made some changes to channel listings in the TV Guide, grouping all the +1 channels together in one place and under a dedicated menu. This was in order to improve the viewer experience and to make +1 channels easier to find on their platform, providing viewers with a second chance to view their favourite programmes12.
These proposals will facilitate greater access to indigenous media and a diversity of Irish content, strengthening RTÉ One and RTÉ2 in pursuance of RTÉ’s public service objects In the context of the changing broadcast landscape, quality live and narrative Irish content is important and remains an audience need. A flexibility in the broadcast hours of RTÉ One+1 would enable parts of RTÉ One’s daytime schedule to be broadcast, giving access to regional programming such as the Today Show, as well as special event or seasonal programming such as horse-racing, political party Ard Fheiseanna and other national events. The proposed RTÉ2+1 service would complement RTÉ One +1 in peak-time, by offering audiences increased access to a variety of programming in key genres such as sport, Irish comedy and factual, while at weekends access will be increased to the best of documentaries, the best of Irish feature films and weekend sport. The +1 proposals will strengthen RTÉ One and
12 https://www.sky.com/help/articles/changes-to-channel-numbers-on-the-tv-guide-roi 11
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RTÉ2 as channels in pursuance of RTÉ’s public service objects, helping to secure important cultural and social goals, by broadening the availability of Irish originated content (see also section 3(d) Meeting the Cultural, Social, Democratic and Other Needs of Irish Society).
These proposals help RTÉ to bolster its linear services and protect the visibility of Irish public service media on digital platforms In an increasingly fragmented and competitive market RTÉ One+1 and the proposed RTÉ2+1 can assist in stabilising RTÉ’s share of viewing and strengthen the RTÉ channels as a whole, by presenting more opportunities to view flagship Irish programming and news; and as such helping to sustain the relevance and visibility of public service programming (See also section 3(h) Media Plurality and Diversity).
Over half of adults claim to watch RTÉ One +1 at least once a week in 2018 – an increase of 20 percentage points since 2015 Research conducted on RTÉ’s Audience Reaction Panel13 in February 2018 found that 64% of those surveyed watched +1 channels at least once a week. Over half or 52% claimed to watch RTÉ One+1 at least once a week, an increase of 20 percentage points since Feb 2015 (32%), while this figure rises to 62% of over 55s (see also section 3(d) Meeting the Cultural, Social, Democratic and Other Needs of Irish Society).
There is broad audience support that it is important for our society that channels like RTÉ One +1 and RTÉ2+1 are available free to air When surveyed, the audience who watch +1 channels support this view, with eight out of ten (82%) agreeing that it is important for our society that a channel like RTÉ One+1 is available free to air and six in ten (61%) agreeing that a channel like this is a good way of using the TV Licence fee – see chart below.
13 An online research panel, independently managed by GFK on behalf of RTÉ – nationally representative in terms of age, gender, social class, region and TV reception type 12
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Chart: Attitudes to RTÉ One+1, Source: RTÉ Audience Opinion Survey, February 2018
The research also found that three in four (77%) agreed that it is important for our society that a channel like RTÉ2+1 would be available free to air, with six in ten (61%) agreeing that a channel like this “is a good way of using the TV Licence fee”, thus enabling more viewers to benefit from RTÉ’s investment in Irish content.
Chart: Attitudes to RTÉ2+1, Source: RTÉ Audience Opinion Survey, February 2018
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The majority (64%) of respondents also agreed that if RTÉ2+1 could be made available to RTÉ at a low cost that they would be in favour of the service being available on weekdays at peak time and all day on Saturdays and Sundays.
If RTÉ 2 +1 could be made available at a low cost to RTÉ, would you be in favour of making the RTÉ 2 +1 service available on weekdays between 6pm and 11:30pm, and all day on Saturdays and Sundays? Yes No % of respondents 64% 11% 25% Can't say/Don't know
Chart: Attitudes to RTÉ2+1 (2), Source: RTÉ Audience Opinion Survey, February 2018
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3. Fit with Public Value Criteria as per S.103(8) of the Broadcasting Act 2009
Public Value Criteria
The principle of the public value of a +1 service was first established when RTÉ One +1 was originally approved; and re-affirmed under the ministerial review, in 2016 as follows:
• 2010 - RTÉ One+1 was approved under Section 103 of the Broadcasting Act.
• 2015 - As part of the review of the approved services required under the Ministerial conditions, RTÉ submitted the Report on the Performance of Digital Services 2011-2014.14
• 2016 - the minister having reviewed the RTÉ report and “based on the performance of each service to date and the importance of ensuring the (Saorview) platform remains competitive and relevant “ considered that “the 2011 services should continue in operation and to serve their respective audiences”.15
This submission proposes to extend the hours of availability of RTÉ One+1 and to make a +1 service of RTÉ2 available. RTÉ has considered the public value of the proposals as a package, but where appropriate has identified the public value associated with each proposal, as follows: a) Fit with RTÉ Public-Service Objectives
The importance of these proposals in pursuance of RTÉ’s public service objects and audience appeal has been addressed in section 2. Proposals and Public Value, above. b) Compatibility with EU Legislative and Regulatory Frameworks The proposals are compatible with EU and the Council of Europe Recommendations The vast majority of public service broadcasters have introduced +1 services, in order to maintain relevance and brand prominence in an increasingly globalised and fragmented media environment; and have done so in a way that is compatible with EU and council of Europe
14 https://www.dccae.gov.ie/documents/Report%20on%20Performance%20of%20RTE%20Digital%20Services%20201%20- %202014%20Part%201.compressed.pdf 15 https://www.dccae.gov.ie/documents/160901%20Letter%20to%20Moya%20Doherty%20Performance%20of%20RTE%20Digital%20Services. pdf 15
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recommendations. An extended RTÉ One +1 and a new RTÉ2+1 will help to deliver RTÉ’s public service remit, providing greater access to public service content and choice, particularly in Saorview homes. c) Costs & Revenue Associated with Proposals and any impact on existing public service provision
The costs and revenues associated with the proposals and market impact are detailed in section 4. Impact on the Market. d) Meeting the Cultural, Social, Democratic and Other Needs of Irish Society
The proposals will strengthen the parent channels in pursuance of RTÉ’s public service objects, by broadening the availability of RTÉ’s content The parent channels, RTÉ One and RTÉ2 continue to deliver high-quality, trusted, distinctive Irish content, responsive to the interests and concerns of the whole community. These proposals offer value and convenience to those viewers, who might otherwise miss these programmes, by delivering a second opportunity to view, rather than perhaps being compelled to switch to non-Irish content.
The +1s proposals will strengthen RTÉ One and RTÉ2 as channels in pursuance of RTÉ’s public service objects, helping to secure important cultural and social goals, by broadening the availability of original Irish drama and comedy, high quality documentaries in the Irish and English languages, moments of Irish entertainment; and balanced, impartial and independent news, current affairs and investigative journalism on RTÉ One +1; and the availability of great sporting moments, special events and new Irish voices, through compelling factual and new comedic talent on RTÉ2+1.
Greater representation of Irish Identity against an array of international offerings In 2017 89%16 of RTÉ’s programme content spend was on Irish originated content, made or commissioned by RTÉ (investing in Irish journalism, Irish culture and programming and the Irish independent production sector). Therefore leveraging its visibility and accessibility is fundamental to the promotion of Irish content, and the work of the Irish creative sector.
16 Source: RTÉ Annual Report 2017, Note 2. Principal Activities and Segmental information 16
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Current research suggests that the audience recognise the impact of this content, with 77% of adults agreeing that ‘RTÉ reflects Irish society’17
+1 channels offer the convenience of a form of time-shifted functionality to better suit lifestyle needs. RTÉ’s 2018-2022 strategy puts the audience first and aims to let audiences choose how, when and where they view, listen or consume content. In the current broadcast landscape +1 channels play an important role, offering a specific form of time-shifted functionality, which allows viewers to watch linear channels an hour later than the initial broadcast; providing another opportunity to view programmes at a time more suited to the needs of their lifestyle. For example, 90% of adults agreed that “+1 channels are a convenient way of seeing TV programmes that are on at the same time as another programme I want to watch”18 (see also Chart ‘Attitudes to +1 Channels’ included under section 3 (e).Improving Accessibility)
RTÉ2+1 will better serve younger Irish audiences. RTÉ2+1 would better serve younger audiences in Ireland. Younger viewers who might otherwise miss Irish sport, entertainment or young people’s content on RTÉ2 will have a second opportunity to view, rather than potentially switching to non-Irish programming, which would in turn limit their access to culturally relevant content.
The growth in reach and share of viewing demonstrates the demand for +1 channels among the Irish public and therefore a societal and democratic need is being met Audience figures19 demonstrate that almost 3.5 million Irish individuals tuned into RTÉ One+1, in both 2016 and 2017. The audience has increased significantly since the channel become more widely available, following its launch on the Sky platform in late 2015.
RTÉ One +1 Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec ( 1 min Consecutive Reach) 2012 2013 2014 2015 2016 2017 1,941 2,075 2,026 2766 3,437 3,436 National Individuals 4+ (47.2%) (50.9%) (48.9%) (67.1%) (84%) (80.3%) Table: RTÉ One +1, National Individuals 1 min cons. Total Reach by Year
17 Source: REDC RTÉ Brand & Reputation Tracker 2017 18 Source: Attitudes to +1 channels; RTÉ Audience Opinion Survey, February 2018 19 Source: TAM Ireland Ltd/Nielsen TAM 17
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As the following chart demonstrates, share of viewing to RTÉ One+1 has trended upwards since 2012. Nationally, share in 2016 and 2017 has quadrupled since 2012 from 0.21% to 0.83% in 2017. While this may seem small, it makes an impact in terms of share of all Irish channels (~50%). Share is significantly stronger, up to 1.82% in 2017, in homes with Saorview as the main (only) reception type – see chart below.
Chart: Share, RTÉ One+1, National Households and Saorview homes by household main reception type
e) Improving Accessibility
An extended RTÉ One+1 and RTÉ2+1 will be widely available on all main TV platforms and this forms part of a wider strategy to enable multiple points of engagement for all audiences, within a diverse portfolio of services. RTÉ One+1 launched on Saorview in May 2011 and on Saorsat in May 2012. The channel launched on UPC (now Virgin Media) in March 2012 and the Sky Platform in December 2015. It is now available in approximately 90% of Irish TV households. It is RTÉ’s intention to make RTÉ2+1 available on Saorview and under the ‘must carry’ and ‘must offer’ provisions of Section
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77 of the Act, this service will be offered to all television platforms, including Sky, Virgin Media, Eir, Vodafone TV and Aer TV.
An extended RTÉ One +1 channel and an RTÉ 2+1 channel will provide value to those people who do not or cannot access online catch-up services like the RTÉ player The proposals provide a cost-effective catch-up option for the 71%20 of households who do not use the RTÉ Player or the 12% of homes who do not have a broadband subscription.
A survey conducted on the RTÉ Audience Reaction Panel21 during February 2018 (which followed an initial survey three years ago), demonstrates the continued value the public places on +1 channels. Audiences rate these services primarily for their convenience in the case of simultaneous programming and as sources of additional viewing choices. These findings confirm that these channels are important at a societal level for those who do not or cannot use online catch up services. Detailed findings can be seen in the chart below (see also section 2. Meeting Audience Needs).
Chart: Attitudes to +1 Channels, Source: RTÉ Audience Opinion Survey, February 2018
20 Source: Nielsen Establishment Survey January 2018 – base is households, not adults 21 An online research panel, independently managed by GFK on behalf of RTÉ – nationally representative in terms of age, gender, social class, region and TV reception type 19
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f) Reaching Underserved Audiences
RTÉ One +1 has broad appeal with universal reach. It is expected that RTÉ2+1 would appeal to the often difficult to reach under 35 audience segment. Four in five (80%) individuals were reached by RTÉ One+1 in 2017 indicating a significant demand for the service – see chart below. Reach is highest among farmers (adults f1f2) at 96% and people aged over 35.
While RTÉ One/RTÉ One +1 content is not directly targeted at 15-34s, seven in ten (74%) did tune into RTÉ One+1 in 2017. This therefore suggests that RTÉ2+1, which would provide programming that appeals to younger adults, would attract a high level of interest from this key audience, thus better serving this often difficult to reach audience segment.
RTÉ One +1, 2017 Reach and Share Consolidated by audience
120 1.6 1.8 1.6 100 88 96 80 84 82 82 82 80 1.4 74 79 79 80 1.2 0.9 0.9 0.9 1.0 1 60 0.8 0.8 0.8 40 0.6 0.8 0.8 0.7 0.6 0.4 20 0.2 0 0
Reach % Share %
+1 channels offer extra choice and convenience to households without high speed broadband access In order to load internet pages instantaneously and enjoy online video streaming without buffering, a high speed broadband connection is required. This is defined as broadband with at least 30 megabits per second (Mbps) download. Currently 30% of premises in Ireland do not
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have access to high speed broadband22. Without high speed broadband and until fibre broadband is rolled out across the country, consumers have a limited set of online services to choose from and therefore cannot access streamed video services such as the RTÉ Player or subscription TV services. RTÉ One +1 and RTÉ2+1 can provide extra value to these households, who would otherwise be less well served than the majority, through the convenience of access to time shifted RTÉ schedules.
The proposals offer value to those who cannot afford to or do not wish to opt for Pay TV Consumers have greater choice and control, in the context of the shifting dynamics of the TV landscape. Some choose not to subscribe to Pay TV. Saorview offers Ireland’s only free digital television service. The proposed channel choice and accessibility to RTÉ content is increased in the 188,00023 Saorview only homes. g) Innovation
The plus one channel is one of the early technological innovations in digital convergence and it remains a valid and much used functionality Since Analogue Switch Off (ASO), increased spectrum availability has enabled the launch of many new +1 channels. See also section 2. Meeting Audience Needs, +1 channels have become an audience expectation).
The introduction of RTÉ2+1 would be the first such Irish public service +1 channel serving content specifically to younger Irish adults.
h) Media plurality and diversity
The proposals strengthen the visibility of public service media on digital television platforms The increased convergence of media and telecommunications industries on a global scale has resulted in significant market fragmentation. This is resulting in increased concentration at each stage of the audiovisual value chain; production, broadcasting, distribution. It is essential that a
22 https://www.dccae.gov.ie/en-ie/communications/topics/Broadband/national-broadband-plan/high-speed- broadband-map/Pages/NBP-Map.aspx 23 Nielsen Establishment Survey – January 2018 21
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strong independent, indigenous media and diversity of Irish content is secured; in a world increasingly inhabited by internationally-owned media organisations, social media platforms and international programming and content. As Ireland’s main public service media organisation it is important that RTÉ remains at the centre of Irish public and cultural life. These proposals help RTÉ to protect overall audience reach and share, ensuring that public service media remains visible on digital television platforms. (See also section 2. Meeting Audience Needs)
RTÉ One +1 and RTÉ2+1 provide the audience with an extra opportunity to easily access the range and diversity of quality Irish content, helping to ensure that a more diverse range is consumed, than may otherwise have been the case RTÉ One +1 and RTÉ2+1 provide the audience with an extra opportunity to easily access the range and diversity of quality RTÉ content, helping RTÉ to sustain a vibrant and diverse indigenous culture and to develop and support local programme makers. This also helps to ensure a strong distinctive Irish voice and identity, in the Irish media landscape.
The proposals strengthen the offering of the Saorview platform, in a highly competitive environment, otherwise controlled by large international media groups The +1 proposals help to secure a healthier future for Saorview, Ireland’s free digital service. Saorview is in 661,000 Irish homes. Of these, some 188,000 are primary homes, meaning that they are Saorview-only homes. Approximately 200,000 pay-television homes also have Saorview as a secondary box. The remaining homes combine Saorview with UKDTT or Free-To- 24 Air satellite (see also section 2. Meeting Audience Needs).
24 Source: Nielsen Establishment Survey – January 2018 22
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4. Impact on the Market
The following details the value for money and potential market impact of the proposals; the potential reach of the services; how the services will be funded and cost and revenue projections.
Value for Money, Increased Efficiency, Quality and Distinctiveness +1 channels enable audiences to more easily access content that their licence fee has paid for, thereby enabling them derive greater value from their contribution. Providing additional viewing possibilities increases efficiency and optimises RTÉ’s investment of public service funds in home-produced programmes, sports rights and acquired series. Some potential revenue may also be generated which can be reinvested in RTÉ’s portfolio of services. Any additional revenue will serve to improve the range and quality of RTÉ’s content offering to the audience, particularly as regards home grown content and therefore delivers improved value for their licence fee.
Market Impact will be minimal in scale and proportionate to public value; and will not inhibit the growth of Irish operators A shift towards digital advertising and media convergence has resulted in the competition for audiences and revenue being more intense than ever, with global players, such as OTT services and Internet giants, now increasingly operating in local markets. At the start of 2001 there were just eight television channels selling advertising in the Irish TV marketplace, of which four were from outside Ireland. There are now a total of 50 channels directly targeting audiences in Ireland, with UK channels accounting for 41 of those – these are channels with little or no commitment to Irish content or the Irish creative sector. In the context of ongoing financial constraints RTÉ believes it is appropriate to seek to enhance and where possible generate some additional commercial value from its services, which can contribute towards the maintenance of RTÉ's public services.
Pay TV Operators will benefit from access to an extended RTÉ One +1 and RTÉ2+1, helping to sustain the revenues they get from their subscribers. The content provided by RTÉ’s linear services is fundamental to the value proposition that is offered by pay TV operators, to their consumers (see also section 2. Meeting Audience Needs, +1 channels have become an audience expectation). 23
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The appeal of +1 channels can be demonstrated by the growth in reach and share of viewing to RTÉ+1, since its launch (see also section 3(d) Meeting the Cultural, Social, Democratic, and Other Needs of Irish Society).
Potential % Share - Commercial Impact
RTÉ One+1 will continue to be available on Saorview, Virgin Media, Sky, Eir, Vodafone TV and Aer TV (Magnet). In extending its broadcast hours from the current 1900 to 0200 (7 hours) to 24hrs it is anticipated that RTÉ One +1 will increase its audience share from 0.82% (in 2017) to almost 1%.
RTÉ2+1 will be available at peak time Mon-Fri and up to 24hrs Saturday to Sunday. RTÉ anticipates that the channel will grow over a couple of years to achieve an audience share of 0.5%.
Currently over 75% of commercial impacts (and therefore revenues) are generated during peak time, meaning that extending the hours on RTÉ One+1 to 24 hours will not add a similar level of ratings in off peak time. RTÉ2 has a lower audience share than RTÉ One, and therefore does not generate as many commercial impacts, but it can be assumed that the impact of a +1 channel will be similar, proportionate to the broadcast hours. It is assumed that the audience to RTÉ2+1 will grow over a few years, based on the experience of RTÉ One+1.
Potential Revenue - Effect of Longer Hours on all Platforms
Incremental revenue due to change in broadcast hours for RTÉ One +1 = circa €300k pa Incremental revenue due to addition of RTÉ2 +1 = circa €500k in year 1, growing to circa €900k in year 3.
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Cost and Revenue Projections and Impact on Existing Public Service provisions
RTÉ1 +1 24 Hours 2018 2019 2020 2021 2022 €000s €000s €000s €000s €000s €000s Income Advertising / Sponsorship 78 311 314 318 321 Content, merchandising and related sales Other Income 78 311 314 318 321 Expenditure Set up costs Technology Infrastructure 151 151 Ongoing Expenditure Infrastructure Support & Maintenance 3 11 11 11 12 Audience Research1 1 5 5 5 6 Music Rights 8 30 30 30 30 Operating Costs 12 46 47 47 47 Depreciation of Set up Costs 8 30 30 30 30
Net Contribution before RTÉ DTT broadcast charges (Note pg. 26) 59 235 238 241 243
DTT Multiplex Broadcast Charges (net incremental cost of moving RTÉjr to separate channel) 163 650 650 650 650
Net Incremental Contribution/(Deficit) (104) (415) (412) (409) (407) 1 Audience research costs for RTÉ One +1 represent the incremental costs for extending the broadcast hours.
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RTÉ2 +1 2018 2019 2020 2021 2022 €000s €000s €000s €000s €000s €000s Income Advertising / Sponsorship 87 523 697 872 872 Content, merchandising and related sales Other Income 87 523 697 872 872 Expenditure Set up costs 0 Technology Infrastructure 117 117 Ongoing Expenditure Infrastructure Support & Maintenance 3 11 11 11 12 Audience Research1 11 46 47 48 49 Music Rights 8 30 30 30 30 Operating Costs 22 87 88 89 90 Depreciation of Set up Costs 6 23 23 23 23
Net Contribution before RTÉ DTT broadcast charges (Note below) 60 413 586 759 758
DTT Multiplex Broadcast Charges 168 670 670 670 670
Net Incremental Contribution/(Deficit) (108) (257) (84) 89 88 1 Audience research costs for RTÉ2+1 are higher than RTÉ One +1 because they include set up costs in relation to audience measurement for a new service.
Note: RTÉ charges each service to broadcast on the Saorview platform; however these DTT multiplex broadcast charges do not represent an outflow of funds from the RTÉ Group. Consequently they do not impact on the capacity of RTÉ to maintain its existing services. In both proposals RTÉ is expecting to generate a net contribution annually before the DTT broadcast charges.
The DTT multiplex broadcast charges are based on the regulated tariff, determined under ComReg Decision No. D11/13 25.
2018 projections are representative of Q4 2018, only. This timeframe is dependent upon the outcome of the Section 103 process.
25 https://www.comreg.ie/csv/downloads/ComReg1371.pdf 26
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5. Conclusion
The enhancements to RTÉ’s portfolio of services set out in this proposal, subject to the outcome of this Section 103 process, would be introduced in tandem in a coordinated way, ideally from Q4 2018.
RTÉ envisages an overall added public value of an extended RTÉ One +1 and RTÉ2+1 to achieve the following:
Improved convenience and accessibility of Irish content to audiences and a stronger RTÉ presence on digital platforms; including an enhanced offering on Ireland’s free digital television service, Saorview.
These improvements would bring added value in a way that generates minimal risk to RTÉ’s current activities or budget for existing services. Such enhancements will have a minimal impact on existing players in this market and are unlikely to inhibit potential growth in these areas by other Irish operators.
Any additional revenue generated would deliver added valued to Irish licence fee payers through the growth and development of compelling Irish free to air content which is central to RTÉ’s public service objects; and to help protect the longer term relevance of public service broadcasting in Ireland.
This proposal supports the delivery of RTÉ Strategy 2018-2022, Renewing RTÉ for the next generation26.
26 https://www.rte.ie/strategy/ 27
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