TV3 reported a net loss of £3.9 million (€4.95 million) for the year ended August 31st, 2001, down from £8.3 million a year ago. The television station said it was ahead of schedule in reporting an operating profit of £849,000.

Market share in the peak viewing hours of its target audience of 15-44 year olds rose by 39 per cent year-on-year, TV3 said.

The audience for TV3 news has risen by 59 per cent and the company said it was viewed by close to half of the Irish population every week. Its breakfast programme, Ireland am, registered audience growth of 52 per cent over the past year to around 120,000, it said.

The station said it had invested more than £25 million in Irish-produced programming since it was set up three years ago - a figure twice as high as that spent on programming from outside the Republic.

A total of 25 per cent of TV3's broadcast hours were of Irish origin - 10 per cent above its licence requirement, the broadcaster said.

Chief executive Mr Rick Hetherington was critical of the licence fee paid to RT╔ and TG4, which he said made it difficult for TV3 to invest in Irish-made programmes. He said there were few specific programme requirements linked to the use of State aid, and said RT╔ had chosen to reduce its home-produced programming by 200 hours despite an increase in the licence fee.

"The unfair and unaccountable subsidies create massive distortions in the Irish television business," said Mr Hetherington. "The distortive effects of the subsidies have made it increasingly difficult for TV3 to invest in home-grown television productions for Irish viewers and have the inevitable result of reduced opportunities for the Irish creative community - as well as lost inward investment and employment for the Irish economy."

Mr Hetherington said the Government should consider alternatives to the current licence fee system.

These included non- discriminatory funding mechanisms to support production and distribution of Irish television programming - through direct, project-based support to independent Irish producers - so that State and private broadcasters can compete equally for broadcasting rights.