But RTE has failed to articulate a strategy for coping with this new reality.

Irish software firm Cape Clear helped produce the platform for 4oD in a deal reportedly worth around 1m. "All broadcasters are going to have to do this in order to retain customers, " said chief executive Annrai O'Toole.

"It's a large complex issue to build. The generic issue here is that all broadcasters have to develop a software platform . . . need a fully featured software platform in order to retain customers.

At some point it's an existential threat to RTE", O'Toole said.

"If your viewers are going elsewhere for content. It's not going to happen tomorrow but over time people have only got so much time for TV or other forms of entertainment."

Some 2,000 pieces of content are available initially on 4oD, scalable up to 250,000 films or TV programmes.

But the principal challenge for traditional broadcasters to distribute content online is not technical but legal. Channel 4 made a deal with a third party to negotiate the ondemand rights for all content it offers produced after June 2006.

Content produced prior to that had to be negotiated separately with individual rightsholders.

Services like inDplay. com, a digital rights marketplace whose backers include Google CEO Eric Schmidt, offer a cross between eBay and imDB (the internet movie database). They may prove important tools to match up content producers and dis- - tributors, particularly for smaller players.

RTE could be making ownproduced programmes available for wider distribution in on-demand platforms such as the advanced broadband offered by Magnet Entertainment or future deployments promised by Eircom, said Magnet's Charlie Ardagh.

"The rights issues create challenges but they're not insurmountable." Magnet recently signed an agreement to offer on-demand programming from Setanta Sports.