For Irish broadcasters, Netflix has one saving grace: it is an ad-free zone. The on-demand television company may or may not be stealing eyeballs (industry statistics report an “additive” effect on screen time), but it is not, at least, stealing advertising revenues. If only all competitors were so thoughtful.

RTÉ’s biggest commercial nemesis in recent years has not been Netflix and its ilk, but the panoply of UK channels that sell advertising in this market. Challenge. Pick. Alibi. W, formerly known as Watch. Our old friend Dave. Insignificant minnows in their own right, they form part of a long tail of channels headed by Sky 1, Sky News, Sky Sports, Channel 4 and E4. These are all channels of UK origin that operate dedicated Irish advertising feeds, or “opt-outs”.

The Department of Communications is now on the hunt for consultants to review the impact of opt-out advertising on the Irish broadcasting sector.

It will already have a pretty good idea, as a 2014 report by Indecon found that, in 2013, UK opt-out channels held a combined 23.5 per cent share of “commercial impacts” (a measure of how many times a 30-second TV ad is viewed) in Ireland, and that their share had almost doubled from 12 per cent in 2006.

Indecon concluded that the most significant change in the Irish television market, apart from the general recessionary plunge in ad revenues, was this surge in the number of UK opt-out channels.

New competition

The new competition chipped away at RTÉ’s then comfortable position, with the share of commercial impacts held by RTÉ and TG4 dropping from 51 per cent in 2006 to 39 per cent in 2013.

Although TV3 Group increased its share over the period, this was largely due to gains for 3e. It too would have been affected by a swelling in the number of opt-out channels from 2012.

The big new player was Sky, a big employer in its own right. It advertising sales wing, Sky Media Ireland, sells Irish ads that run on the channels it owns, including the various Sky Sports channels and Sky Atlantic, its home for Game of Thrones. But it also represents channels such as Nick Jr, Comedy Central, MTV, Discovery, At the Races and Kardashian-pushers E!.

For Sky, it’s all gravy. The bulk of its revenues come from subscriptions, so it can afford to compete aggressively on ad prices. Some campaigns that make their debuts in RTÉ’s premium, peak-time slots, for maximum impact early in their life later move on to cheap, high-frequency bookings on Sky.

The other opt-out player is Channel 4. It began selling Irish ads on E4 way back in 2002, later adding More 4. In 2014, through its Irish sales partner Medialink, it launched an opt-out for Channel 4 itself, meaning advertisers no longer had to rely on an “overspill” effect from ads that ran in Northern Ireland.

Channel 4’s official market entry was a headache for RTÉ. But it is Sky’s ability to use exclusive content to attract subscribers with disposable incomes – who advertisers naturally love – that really crystallises the commercial challenge it faces.

Lonely lobbying

And now that TV3 is part of Virgin Media, the business of lobbying against the purchasing power of multinational media empires may be a little lonelier for RTÉ. (On the push to legislate for the power to charge retransmission fees to pay-TV platforms, it may be similarly alone.)

RTÉ’s lament has always been that, the occasional Moone Boy aside, these channels do not spend money on Irish programming, and that the great opt-out advertising drain is a form of globalisation that hurts Irish culture. They are backed up on this by Screen Producers Ireland (SPI), which represents about 130 independent film and television production companies.

“It is currently unfair that broadcasters based in dominant media territories are permitted to sell opt-out advertising into small territories like Ireland but are not bound to re-invest in the territory from which they receive this income,” SPI states in its pre-budget submission.

Producers want commissions. They don’t want an estimated €48 million in income leaking away from the Irish market, via the coffers of companies that are not regulated here and are not obliged to either make local content or pay the industry levy used to fund the Broadcasting Authority of Ireland.

The consultants who win the Government’s tender will be asked to recommend “new or altered approaches” that might lessen the impact of opt-outs and “improve the funding of Irish broadcasting content”.

Workable solutions to the problem are not obvious. But the Government appears to regard almost every idea as less radical than the idea it might simply increase public funding. And, to be fair, it’s probably right.