The sales house that sells advertising on behalf of 16 local radio stations, Independent Radio Sales (IRS), has received a significant boost from the Competition Authority.
Following the acquisition of FM 104 by Scottish Radio Holdings (SRH) earlier this year, the Competition Authority issued a determination which said that FM 104 should "cease any participation in advertising sales as part of IRS".
This was because the authority was concerned about SRH having too much of a presence in the advertising market.
At present, radio sales are booked through three broad blocks: RTÉ, Today FM and IRS.
The authority was concerned that the takeover of FM 104, a member of IRS, would give SRH a strong presence in two of the three blocks. This is because SRH owns Today FM and FM 104.
However, IRS was concerned that excluding FM 104 might do serious damage to its service, which involves offering advertisers the opportunity to take space across a range of local stations simultaneously.
The Competition Authority, however, has in recent weeks clarified the position for IRS. Under the clarification, IRS can buy airtime from FM 104 on a "market-price basis", but it must then re-sell this to its customers. FM 104 cannot participate in any way in the resale by IRS or in the profits accruing to IRS.
Mr John O'Connor, managing director of IRS, said the key impact of the authority's clarification was that IRS's main advertising packages, known as Bulls Eye and Drive, "remain fully intact".
A note from the agency states: "So how can the station recoup their investment?
"The show is limited to 50 minutes of advertising weekly, which, if completely sold out for an ambitious price of €150 per spot, should yield the station €780,000 annually in revenue - which would allow them to break even, if reputed costs are accurate."
It adds: "The show will become a success if it can manage to take on the competition among the morning shows, but also attract extra listeners to the station generally - increasing its overall reach and market share."
