Making capital locally
|Hugh Oram talks to David Harvey about his City Channel venture|
Broadcaster David Harvey shares something in common with Ryanair boss Michael O’Leary and former In Dublin publisher Mike Hogan. It has nothing to do with O’Leary’s brusque character or his ads ridiculing Bertie Ahern (Harvey, after all, like Hogan, was a Fianna Fail activist, albeit on the Albert Reynolds rather than CJ Haughey front).
David Harvey has extended the low cost business model to TV with City Channel, first launched in Dublin and now also operating in Galway and Waterford. A seasoned radio and TV presenter, Harvey’s experience goes back to when Chris Carey ran the Dublin pirate station Radio Nova.
Rather it is all to do with a low cost, no frills approach to a business model. Hogan called his publishing company KCD (an acronym for Keep Costs Down), while O’Leary… well there is hardly a soul in this part of the world who would not be familiar with all that is Ryanair.
Harvey is the founder and chief executive of City Channel, the TV service available to NTL and Chorus cable subscribers in Dublin, Galway and Waterford. He is convinced that its highly-localised, low cost programming format is set to extend further in Ireland.
Launched in Dublin in September 2005, on the NTL/Chorus platform, City Channel is now available to 175,000 homes in Dublin and the east coast area. It also broadcasts on both analogue and digital platforms to 28,000 homes in the Galway area and 26,000 in and around Waterford.
Running 24/7, the programmes are repeated several times. Harvey’s thinking is that because the TV market in Ireland has changed considerably in recent years, viewers are now more inclined to graze the hundreds of channels available, so new show ideas and repeats work.
The schedule covers a wide panoply of interests. Oto Polska is a Polish programme hosted by Izabela Chudzicka, while veteran 98FM presenter Jimmy Greeley does a restaurant review show called On the Menu.
Tony Colley covers the motoring world with Ignition and Cara and Gabby, aka the Backstage Blondes, are behind The Rock & Roll Show. Ray Shah, a Big Brother survivor, presents Access All Areas, covering the club scene. Alex Gibson, a lecturer at DIT Cathal Brugha Street, hosts The Media Show, which profiles the media and marketing business. The Home Improvements Show is fronted by PR consultant Kathy Hoffman.
In some cases, full-time journalists are hired, as with Cliodhna O'Donoghue, property editor of the Irish Independent, who hosts Property View. Harvey himself presents Cityline current affairs show.
“We’ve lots of coverage in areas that other TV channels don't cover, like a gay programme, a books show and coverage of awards," Harvey said One of proudest innovations is the simulcast with FM104 of the Adrian Kennedy show, where a live radio phone-in goes out live on TV.
City Channel's programming is produced in its studios just off Belmont Avenue in Dublin’s Donnybrook suburb. Harvey estimates that the average cost of producing an hour's programming is about €150, a fraction of what it costs RTE to make its own home-produced shows.
Staff numbers are lean, with 19 full-time staff and a further ten part-timers. City Channel produces a non-stop TV service, while RTE, up the road, is employing around 1,500 people to produce two TV channels and three main radio channels. Admittedly, repeats play a big role.
Five staff at City Channel are selling airtime. Harvey wonders aloud how RTE can spend such vast sums of money on its activities and like the press sector he is quick to point the finger at what he sees as the unfair advantage of dual funding from the licence fee and advertising.
Harvey believes that RTE should be dependent solely on either advertising revenue or the licence fee, but not both. He reckons that some day soon, the European Court will rule on the dual funding issue and that RTE will be found to be acting unconstitutionally.
“As for those 1,500 people on the payroll in RTE, just what do they do all day?” Harvey asks.
“We at City Channel can produce a service with just 29 people in all.” He believes that for the funding RTE gets, they could be running 20 TV channels out of Montrose.
City Channel makes a large portion of its output and it only uses outside broadcast facilities when it is covering an awards event, like the Advertising Festival in Kinsale or the Digital Media Awards.
It is constantly developing new programming ideas and themes. It has just started broadcasting daily local news programming in Galway and Waterford. With Galway’s water contamination crisis caused by the outbreak of crytosporidium and general election campaigning in full swing nationwide, the expansion in news services is timely.
Harvey says he is open to new ideas and they avoid going through all the auditioning palaver used by national stations. "For the In Print books programme, I knew that Owen Dawson would be perfect, so we just decided on him and it's working well. Anyone is welcome to walk in here with a programme idea and we'll take it from there," Harvey said.
Not only has Harvey gone for a new model in programme production, he has gone after a new form of advertising. As only around the top four per cent of companies in Ireland can afford to advertise nationally, City Channel targets the other 96 per cent with modest budgets.
Advertisers recruited by City Channel are selling everything from flooring to furniture and conservatories (Harvey has voiced the ads for Senator Windows for more years than Harry Moore cared to remember).
An advertiser can be on air with City Channel for about €200 a week. The basic spot rate is €50, so with discounts, a package of 120 x 20 second spots for a month will cost around €2,400.
Harvey says that it can be time consuming but worthwhile persuading smaller companies to use TV and then going through the production process for getting the commercial to air.
"We could have just sat back and waited for the agencies to buy time for their clients and just send us the tapes," Harvey said. By taking the bull by the horns and doing the ‘complete deal’, agencies – always a hard nut to crack - are now starting to buy airtime for big brands.
But as things stand, around 90 per cent of City Channel's ad revenue comes from smaller firms.
Sponsorship comes into the mix too, with the likes of Dublin City Council supporting the Cityline show.
City Channel’s website features the views of Colm Gaffney of the Smart House in Ballsbridge, where he says: "We were very surprised at how many people saw the programme in which we were featured. The quality of the pictures and the production were top class."
Harvey says that a typical City Channel viewer is aged 25 and lives in a new estate with cable TV. Most viewers would be upwardly mobile and when it comes to TV viewing they like to flick around the channels.
As to weekly audiences, Harvey says they only have reach figures for Dublin. Tracking indicates a 34 per cent weekly reach of available audience on digital cable. He claims the figures for Galway and Waterford would be much higher due to the analogue platform.
The upshot of all this is that City Channel has been profitable since the end of last year. "We broke into profits quicker than we expected,” Harvey said. “We reckoned it could take two to three years. But we trebled our revenues from January 2006 to the same time this year.”
The company is capitalised at less than €1 million and he draws a comparison with Channel 6 where the budget was pitched far higher. For NTL/Chorus itself, the success of City Channel has been a worthwhile addition to its range of localised services. The cable network itself is soon to be re-branded as UGC by its Liberty group owner.
Looking ahead, Harvey says that the way TV technology is progressing, within a few years mobiles and laptops will have perfect quality live TV pictures, opening up a whole new marketplace.
One of the latest developments comes from the North, where both the Irish News and the Belfast Telegraph have launched their own TV channels, which can be accessed online.
Harvet believes Ireland needs more free enterprise TV and he is puzzled by the fact that more channels have not started up. City Channel has the technology to run three channels. He hopes to bring City Channel to every city and large town in Ireland.
Some of the cities are still in the making, like Athlone and Drogheda.
He is quick to praise what Setanta, TV3 and Channel 6 have done to make an impact on the local scene and provide more choice.
With the explosion of niche channels on Sky and elsewhere, Harvey reckons that this is the path forward and that the low cost model pioneered by his City Channel is the way to go.