Buyer Profile: RTÉ’s Dermot Horan

December 3, 2010 World Screen
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PREMIUM: Dermot Horan, the director of broadcast and acquisitions at RTÉ, talks about the challenges of running competitive channels as the Irish Republic faces a severe economic crisis and advertising downturn.

Horan is responsible for the acquisition of more than 11,000 hours of international material for the Irish public channels, RTÉ One and RTÉ Two, ranging from movies and prime-time series to factual and children’s programming. He also sits on the RTÉ Television board, where he represents all broadcast matters, including scheduling, promotions, press and publicity and marketing.
 
WS: Was your budget this year the same or larger than last year’s?
HORAN: The budget was slightly smaller than in previous years and that was due to the fact that the Irish economy has taken a bit of a pasting. And our advertising revenue—we are a public broadcaster but like a lot of public broadcasters in Europe we are not only funded by a license fee, but also by advertising—since the autumn of 2008 has gone down significantly and hasn’t really recovered, therefore all departments in RTÉ were forced to cut their cloth accordingly.
 

 
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WS: Despite the cutbacks, what did you consider to be must-have programming, where did you spend your money?
HORAN: At the end of the day, acquisitions are cheaper than commissioning programming. We have a number of key Australian and British soap operas. We continue to buy EastEnders and we continue to have a large deal with the BBC that includes everything from preschool programming through to natural history programs to drama, as well as EastEnders. We have been very happy to continue that deal. We have a large volume deal with Disney and we are very happy with that. Desperate Housewives continues to perform extremely well for us, as does Grey’s Anatomy. We still do deals with all the major Hollywood studios and so we do take a long-term view on our relationships with all of these distributors and they take a long-term view with us. Some people have been relatively accommodating, which is important in this particularly difficult time for the Irish economy.
 
WS: Do you think your budget for 2011 will remain at the level it is now?
HORAN: Yes, thereabouts. We’re trading at a level that I don’t like to see us trading at. We don’t seem to be going further down, but we are basically trading at 2003 levels of income. What’s not appreciated [is that] we’ve gone back about seven years: taxes have been raised and salaries have been reduced. Anybody working for the government—if you are a nurse, or a policeman or a doctor or a public servant—your salary was cut and your pension was cut. And most people in the private industry have had their salaries cut, nobody seems to get bonuses anymore, and taxes were increased, so there is a lot less discretionary income around.
 

 

 

WS: Does that bode well for free TV—are people staying home and watching television?
HORAN: In one way it does. Pay television seems to be extremely robust during these difficult periods because one of the last things people will do, even if they are made redundant, is give up their pay-TV subscription. The cable and satellite services, like Sky and UPC, seem to be holding up rather well. Most of their income comes from subscriptions, so their revenue is actually safer than revenue that is associated with advertising.
 
But yes, certainly we have seen figures for television go up and particularly on certain nights of the week, like Friday and Saturday, which were traditionally nights that during Celtic Tiger period [a time of rapid economic growth between 1995–2007] the networks would not put a huge amount of time and effort into. And now the people are in and we’ve seen figures go up. We’ve seen it in the U.S. this year with CBS being able to launch successful shows like CSI: NY and Blue Blood on a Friday. And that probably tells its own tale about the American economy as well.
 

 

 

WS: How does your buying cycle work?
HORAN: We have a certain number of overall deals with the Hollywood studios, so that when we go to the Screenings we already have a deal in place, and it’s a matter then of picking and choosing the programming. With some of the other studios, we literally go to the Screenings with our checkbook in hand, but invariably we don’t just buy individual series, in the way that perhaps they are bought in the U.K. We’re much more like most of the other European countries, where we tend to do packages with the studios, so that would include movies as well.
 
As soon a movie has its life in the theaters we can actually track its success and then we can also try to ascertain as to whether that movie’s success in the cinema will translate into television—and it doesn’t always. Certain genres—like horror and zombies and subjects that are geared to the younger males, because those are the kinds of people go to the cinema but they don’t necessarily watch a lot of free-to-air television—don’t work very well on free TV. Whereas there are other movies that wouldn’t have done massively well at the box office, but are maybe romantic comedies or human dramas more geared to women 30+ and they will often hold their own very well on television, so we’re making those assessments all the time.
 
Some of the big blockbusters that are action orientated, and are shown in the cinemas in 3D on very big screens in full Dolby surround sound, don’t necessarily work when they eventually become available to free television. We are talking to distributors about this—they are often asking us to pay a premium price for a product that is actually two years old. Not just two years old, but it has been exploited in all sorts of other windows and may in fact be in [the local discount store] in a basket for €5.99 and you are asking us to pay a premium price for it. Whereas when we buy a television series in the States, we can often run it a couple of days after U.S. transmission and it’s fresh because people haven’t seen it.
 
There are movies like Mamma Mia, which we’ll show within the next few months, which will continue to perform each time we show it because it attracts women who don’t necessarily have the time to go to the cinema because they are very busy raising children and juggling career and home. And certain types of romantic comedies will work well.
 
Sometimes distributors are trying to get large amounts of money because of how well something did at the box office, but I think they are beginning to understand that big money at the box office does not necessarily translate into a successful free-to-air showing two years later.
 
WS: How are your catch-up TV services?
HORAN: We are doing well with those and most of the studios are engaging with us on those and that’s working very well. We have a 21-day catch-up service, so it would allow somebody who had perhaps gone away on holiday for a fortnight to catch up on up to three episodes of, say, Desperate Housewives or Grey’s Anatomy or The Good Wife. It hasn’t affected our television audience. In fact, it does appear to be bringing people back to television, because it gets people back on track.
 
We are also measuring in our Nielsen figures what we call VOSDAL video on same day as live. So our overnight ratings now will include people who watch live and also people who watch on their DVRs later on that night. So we can capture people watching within 24 hours, and we can also capture people within seven days.
 
WS: What is DVR penetration in Ireland now?
HORAN: It’s probably around 40 percent or 45 percent.
 
WS: What kinds of programs do well on catch-up TV?
HORAN: Appointment-to-view programs do extremely well. The top-rated ones tend to be big reality shows, like The X Factor. It’s a watercooler show and if you haven’t seen it that night, you are not at the races the next morning during coffee break.
 
The big series like Desperate Housewives and Grey’s Anatomy are also doing well. What is doing less well would be news and current affairs because people watch those live, they lose their currency almost immediately.
 
WS: What would you say are the main issues confronting the Irish TV market right now?
HORAN: With the advertising downturn, it’s the conundrum of trying to maintain the uniquely Irish look of your channels, and that comes from commissioning local programming, but local programming invariably will cost more, particularly if it’s the upper end of the entertainment genre or the upper end of the drama genre. They are very expensive programs to produce and yet they really do deliver in spades in terms of audience. What we’ve been doing—we’ve all been taking salary cuts and RTÉ was one of the first companies to do so across the board, quite significant ones, and that was to keep the money on screen because if you begin to weaken your schedule, then you are just going to manage decline. We need to maintain as much money on the screen as possible. So I think that’s one challenge.
 
The other challenge to the Irish market will be the analogue switch off and full digital by the end of 2012 and it will be interesting to see how we all do in the fully digital environment. The good thing is at the moment in digital homes in our Nielsen figures we are actually up year on year, which is interesting, because that is the most competitive environment. But in that competitive environment of 600 channels, one of the unique of the unique selling propositions that RTE offers is something distinctly Irish. That is where you need to maintain your uniqueness, your Irishness, or your Frenchness or your Norwegianness, or whatever. And then my job will be to complement that with some of the best acquisitions out there and to try to have a potent schedule that people will watch. But if we allow our channels to become too international and not significantly Irish then I think we will see in a decline. That is why every attempt is being made to maintain the Irishness on screen.
 
WS: What are some of RTÉ’s most successful locally produced shows?
HORAN: We recently did a really good drama series called Love/Hate. Aidan Gillen is one of the actors; he was in The Wire. Love/Hate is a drama set in tough gangland Dublin, but also has romance and relationships and has performed extremely well for us. And we’re just about to launch a new series of a show called Single Handed, which is a crime procedural drama set in the west of Ireland, and actually this year is being fully co-produced with ITV in the U.K. They bought the first couple of series from us last year and ran them very successfully and liked it so much that they said they would co-produce it. That’s a win-win for both of us because it means we both have a show we’re are happy with and we’re sharing the cost.
 
And we saw a little of this back in 2008-2009 with the Canadians, especially after the Writers Strike in the U.S. when there was a shortage of stock. Suddenly you were seeing shows that were co-produced with CTV or Global TV or whatever. And I think here co-productions can be very successful. It’s not dissimilar to Canada in that if a drama is shot in the west of Ireland, to someone living in London, it is no more alien than a drama set in the highlands of Scotland. We speak the same language, we have a slightly different accent but somebody in Scotland would have a different accent to somebody in London as well, so it actually works. So Love/Hate and Single Handed are two of our big hits at the moment and they are local.