Media&Marketing: BSkyB will announce its latest digital subscription figures tomorrow and, despite this week's decision to end its Irish news bulletins, the data from the Republic is likely to be very positive.

The decision to end the news service is good news for Sky's competitors - RTÉ and TV3 - but not necessarily bad news for Sky itself. The company's operations here stand or fall on the number of digital satellite subscribers it retains. The driver of growth in that area is not Sky News - in fact Sky News is included in the basic package offered by Sky's deadly cable rival NTL.

What drives growth in subscriptions to Sky is premium channels like Sky Sports and Sky Movies and high-definition television (HDTV). Sky News barely features in a lot of Sky publicity material and it has not been profitable from day one. As a result, those who made the decision to end the Irish news service, believed to be BSkyB UK executives Dawn Airey and John Reilly, did so in the knowledge that cutting the service would have very limited commercial impact.

However, the decision to axe the two bulletins - at 6.30pm and 10pm - will deprive Sky Ireland of political and media influence in Ireland and that can often be even more important. While the bulletins had small audiences, politicians were fond of the service and regularly made themselves available for interview.

For years, Sky's rivals had been able to bait the company for not putting direct editorial resources into the Irish market. Following this week's decision, that charge will be levelled at the company again. For its part, in private, the company counters that it spends millions each year on advertising and marketing in Ireland and its service is now in one in two digital TV homes in Ireland.

The key figure in all this is the almost €200 million in revenues BSkyB derives from the Irish market every year. The Irish bulletins were believed to be costing between €3 and €4 million annually, although the company has declined to disclose official figures.

While it seems perverse to ditch the Irish bulletins when the company is squeezing almost €200 million from the Irish market every year, Sky News is no longer regarded by BSkyB as some form of loss leader. It has to pay for itself, or at least go very close to doing so.

This summer there were lay-offs at the company's UK operations. While one of the largest shareholders in BSkyB, Rupert Murdoch, has always been supportive of the station and seen it very much as a calling card with politicians, it would appear this status is now under some attack.

Sky News Ireland went on air in a blaze of publicity. The head of Sky News UK, Nick Pollard, chaired a press conference in the Conrad Hotel where the station's presenters were introduced to the Irish media. There were all sorts of plans considered at that time. There was even talk about the Irish service becoming a fully-fledged Irish news operation.

While the BSkyB executives were careful to steer away from directly challenging RTÉ's dominance in news, there was an implied threat that Sky's key assets, like its extensive foreign network, could in time make RTÉ look like a small regional player.

Either way, there was a lot riding on the venture. Dawn Airey, managing director of Sky Networks, told The Irish Times two years ago that Sky News' Irish bulletins should not be compared with RTÉ or TV3's offerings. Sky News was a 24-hour news operation solely focused on news, she said. This was a reasonable view, but it was ignored by most observers and advertisers who continued to compare all three stations' bulletins.

On average, the earlier bulletin got about 8,000 viewers and the later bulletin got 17,000 viewers.

Advertisers maintained yesterday that Sky's service still needed to be judged against its RTÉ and TV3 competitors. Martina Stenson, managing director of Universal McCann, said: "It comes as no surprise that Sky News Ireland met its demise given the very low viewership figures since the programme launch. The early evening programme is up against RTÉ's Six One bulletin and it was always going to be difficult to build an audience in this time slot.

"The later programme is fighting against prime-time drama and current affairs and this is a hotly contested time period. It's clear that the investment required to produce such a programme twice daily could not be in any way covered by advertising revenue, therefore the long-term viability was always going to be in question".

The Grainne Seoige question also arises. The former TG4 broadcaster fronted the service from day one and her departure earlier this year to RTÉ robbed the service of its most recognisable personality. Sky executives say that their audiences did not drop following her departure.

Louise Fitzpatrick, of Initiative advertising agency, said it was possible Seoige's departure was the crucial factor in the ending of the bulletins. But that is now of only academic interest. Sky's decision, while shortsighted in terms of political and media influence, has clearly been made on commercial grounds and that would appear to be the only criteria that counts at present.