Media & Marketing: The abject failure of the Government to establish any kind of digital terrestrial television service has long been commented upon. The kind of dithering and foot dragging we have seen over the possible sale of Aer Lingus and the abolition of the Groceries Order is mild when compared with the indecision displayed on the issue of digital television services in the State.
Noel Dempsey, a Minister usually prepared to risk at least some political capital, has yet to make any headway on this issue. Back in June this newspaper discovered that the Government was preparing to buy millions of euros worth of equipment to enable it to offer a trial of digital television to consumers in Meath, Louth and greater Dublin. Surprise, surprise the trial has yet to begin.
Surprise, surprise, even after that we have no idea how long before the trial will be extended to the rest of the State.
Also, it is important to remember that the plan to switch RTÉ's existing analogue transmission network to digital broadcasting was first conceived in the mid-1990s.
But the Government abandoned an attempt to contract an independent operator to offer the proposed service in 2002 due to a lack of interest when the dotcom bubble burst.
The whole thing has been a shambles. The only defence put up by policy makers is that we are probably lucky we didn't rush in too quickly. Sure look at Britain where ITV Digital was an unmitigated disaster, the Government points out.
As one senior civil servant put it to me a few months ago: "A lot of people lost money in a rush to be in that first group, we can be thankful we weren't one of them."
Well all those arguments are now academic because the European Commission wants all EU states to provide a date for when they will switch off their old analogue networks. The Government has not provided a date so far - at least not one which has been disclosed publicly.
To be fair to Dempsey, the slow response on the digital television issue predates his arrival at the Department of Communications. Also, it is possible in time that the Government will get its act together and the trial will be an overwhelming success.
But the real problem is that in some ways it is too late. In the last week a survey was released which showed just how much the Government has missed the digital boat.
The TV establishment survey, which measures the level of penetration different media have in the home, found that there were now 455,000 homes in the State with digital television.
Put more starkly, that is 32 per cent of all homes. Interestingly, about 220,000 of the homes with digital television were in the high spending ABC1 category.
What this means is that an awful lot of upwardly mobile, lucrative, affluent customers have decided not to wait around for any Government-backed digital service and have opted instead for BSkyB, NTL or Chorus for their digital services.
In most cases they have opted for BSkyB, which counts Rupert Murdoch's News Corporation among its main shareholders. Up to the end of June Sky, Ireland had 363,000 subscribers and it remains the largest pay television provider in the Republic. If UGC's takeover of NTL finally gets regulatory approval, that combined entity will become the largest provider of pay television in this country.
Either way the State is now playing host to two powerful well-resourced digital providers, while the Government flounders around trying to set up its own digital alternative.
Of course the big private players like NTL and Sky have their own problems. Sky in particular has to a considerable extent built its subscription base around a heavy diet of sport, in particular English Premiership football.
The only problem is the EU Commission appears determined to share these games out to various TV companies, so Sky will have to adjust its strategy. UGC meanwhile will have to pay down the large debts it is going to incur buying NTL Ireland in the first place.
The Government-backed system will have capacity to offer up to 20 channels and while this seems a lot to anyone still watching analogue television, premium customers who are receiving at least 70 or 80 channels (and, in some cases, hundreds) are unlikely to go back to such a minimalist service.
In other words, a type of digital divide is likely to emerge, with affluent well-resourced customers (attractive to advertisers) going with private offerings from the likes of NTL and Sky, and late adopters sticking with the Government's sparser digital service.
New homes boost RTE's bottom line
Of course all of the above does not directly impact on RTÉ because whatever platforms RTÉ 1 and RTÉ 2 air on, the ratings appear to stay very solid.
However the latest figures on the number of homes with TV sets makes for very encouraging reading from an RTÉ point of view. The number of TV homes (according to the TV establishment survey) now stands at 1,421,000, up from a figure a year ago of 1,373,000 - an increase of 3.4 per cent. Every home with a TV set must pay a television licence fee, which now stands at €155 a year.
So based on these figures RTÉ can expect to take in about €217 million this year in licence fee revenue. Of course its not as simple as that. Firstly the collection agent, An Post, has to get paid. Secondly there is still a significant number of homes evading the licence fee inspectors.
Nevertheless RTE will expect to significantly increase its licence fee take of 2004 which stood at €166 million.
• Emmet Oliver can be contacted at eoliver@irish-times.ie
