Rupert Murdoch's satellite television company BSkyB has its sights set on Ireland's booming economy. The satellite giant is hoping to start screening separate Sky's plan to screen separate Irish ads alarms TV3 commercial breaks in Ireland, a move which threatens to divert revenue from domestic broadcasters.
Executives at TV3, the new terrestrial channel due to come on air in the autumn, are so alarmed at the prospect of losing advertising revenue that they have sought protection from the industry's regulators, the Independent Radio and Television Commission.
Yesterday, the IRTC said it had no jurisdiction over BSkyB. However, it would bring the issue to the attention of the office of the director of telecommunications regulation if it was established that Sky was intent on going ahead with its plan.
Media buyers in Dublin estimate that Sky One and Sky News might together cream up to £5 million per year off the Irish market. That is half of TV3's estimated first year ad revenue target and could be achieved by Sky with a modest financial outlay.
Mr Rick Hetherington, TV3's chief executive, admitted he was worried about the effect on his fledgling venture if this State's small media marketplace becomes even more crowded. "From a pure business standpoint, the more competition you face, the more difficult your life becomes," he said. "Sky has significant ratings at certain times of the day."
Mr Hetherington, a Canadian appointed by TV3's major shareholder CanWest, added: "I don't know what their plans are, but I've heard the rumours and referred the matter to the IRTC. The issue is this: should someone not providing a primary service in a country be allowed to sell commercial air time in that country?
"I'm certainly not aware of any application by Sky to offer a separate service in Ireland for Ireland. If they don't set up a broadcasting facility here, we doubt that they'll be able to operate."
BSkyB made a bid to insert separate commercials for Ireland six years ago, said Mr Hetherington, but RTE managed to block it. As a major shareholder in Cablelink, which carries Sky channels, the national public broadcaster had some sway over the satellite service at that time.
But RTE is set to relinquish its stake in Cablelink. That development appears to have reactivated Sky's interest in Ireland. Like UTV, which doesn't have a licence to broadcast in the Republic, it is hoping to cash in on the economic boom. Digital technology will make it easier to transmit a different signal to Ireland. According to media buyers, BSkyB sent a delegation across to Dublin recently to sound them out. Mr Aidan Dunne, media director of McConnells, would welcome a wider range of advertising outlets. "If Sky can give us access to more of the audience and the market here, that has to be a good thing. If it increases the supply of air time, the cost of commercials should come down all round".
But Mr Dunne acknowledged that there could be a downturn in the long-run. "Ireland's media market has been growing dramatically in recent years in line with GNP, but it is still small. A weakened RTE or indigenous newspaper sector wouldn't be in our long-term interest".
Mr Steve Shanahan, media director of QMP, said: "Our natural instincts are to favour Irish media providers as much as we can. Like everyone else, we want to keep jobs here. But if Sky offers us a cost-effective alternative, we'll certainly look at it". Mr Shanahan forecast Sky could take up to £5 million a year, giving it a 5 per cent share of the Irish TV market. "That's a nice little earner if you're not spending anything on separate programming and have just a three-strong sales force in Dublin. It could be a headache for TV3".
BSkyB declined to comment, but it apparently indicated to media buyers that it planned to screen separate Irish commercials as early as January next year.