Oireachtas Joint and Select Committees

Tuesday, 15 July 2014

Joint Oireachtas Committee on Transport and Communications

25 Years of Independent Broadcasting: Independent Broadcasters of Ireland

1:00 pm

Photo of John O'MahonyJohn O'Mahony (Mayo, Fine Gael)
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We will resume in public session. On behalf of the committee, I sincerely welcome Mr. John Purcell, Mr. Scott Williams, Ms Lisa Ní Choisdealbha and Mr. Tim Collins from Independent Broadcasters of Ireland as well as chief executives from independent radio stations throughout the country. Obviously, it is a milestone in broadcasting in Ireland and we look forward to engaging with the delegation and welcome it to a reception afterwards. The purpose of this meeting is to engage with the Independent Broadcasters of Ireland in order to consider its many achievements over the past 25 years and to outline the strategic initiatives which will ensure the industry's continued success.
I draw witnesses' attention to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence in respect of a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any persons or entity by name or in such a way as to make him, her or it identifiable. Any submission or opening statement they have submitted to the committee will be published on the committee website after the meeting. Members are reminded of a long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or any official by name in such a way as to make him or her identifiable. I call on Mr. Purcell to make his opening remarks.

Mr. John Purcell:

I thank the Chairman and the members of the committee for inviting us here today. I am very glad to be here. Many of us have been involved in independent radio for most of the 25 years, which have gone by very fast. I am particularly pleased to be joined by colleagues from around the country. We are delighted to have this opportunity to come before the committee because we see that it has a very important role in the formulation of policy and has a particular understanding of the impact of our members' work throughout the country, which we appreciate that.
As the Chairman mentioned, it is a very important anniversary - 25 years. In his public notice of the meeting, the Chairman referred to independent radio playing an indispensable role in public life. We hope that the occasion of our 25th anniversary will be an opportunity for us to look back, as the Chairman indicated in his opening remarks, but also to look forward and to see what steps need to be taken to ensure that the successes of independent broadcasting can continue into the future. We last addressed the committee in February 2013 and I feel a certain sense of déjà vubecause while we outlined many of the challenges and issues we face, we feel that the time since then has been characterised by an unfortunate lack of progress so there is a certain amount of frustration on behalf of our members and an impatience to proceed with the work of securing the future.
We represent a diverse group of stations throughout the country - two national, four regional, one multi-city and 27 local radio stations. We are an alternative voice and I think we have introduced an alternative view that is not just Dublin-centric, which is hugely important in the Irish media landscape. The committee will see from our presentation that the media landscape in 1984 was a very simple place. The turnover of Irish media was in the region of £57 million. Fast-forward to 2011, which is the last year for which we have figures available, and one will see that a revolution has taken place. The media landscape in which we operate is hugely complex. It is not longer just Irish media with a few isolated channels such as BBC1, BBC2 and Channel 4 coming in. We are now in a globalised media marketplace.
Over the past 25 years, independent radio has played a unique role in protecting and nurturing Ireland's unique identity and personality. However, we have faced upheaval over the past number of years due to the economic downturn. I want to be clear that the changes that have overtaken our industry are not just due to the recession and will not change when the economy, hopefully, recovers. While listenership endures, and our members enjoy very strong listenership, the economic basis upon which we operate has changed. In 1988, independent radio meant some pirate broadcasters who operated outside the regulatory framework and RTE. Next week marks 25 years since the first voice on independent radio went live on 20 July on what is now FM104. The man who spoke the first words in Irish on that day - we might have a prize - is in a photo contained in our presentation. He is actually sitting beside me. Mr. Scott Williams was the first voice on independent radio in Ireland under the current framework.
Today we have RTE, as we did 25 years ago, but we also have a rich tapestry of independent stations. Members can see them in our presentation. We have been hugely successful. We feel we have been successful because of the access to the airwaves we provide. There are studios the length and breadth of the country because of the relevance of what we broadcast, because we respond to the needs and interests of our listeners, because we are flexible and nimble and adapt to the situations we face and, importantly, because we provide an important platform for local democracy and coverage of local issues, which I am sure is appreciated by the members of this committee and indeed the wider Oireachtas.

They are some of the changes that have happened culturally over the last 25 years, but a revolution in listenership habits has taken place. The next slide provides a very stark illustration of radio listenership. The nosediving line in red is the listenership of RTE stations and the rapidly rising line shows listenership of independent stations, be they national, regional or local. The market share, which is time spent listening to radio, again shows that independent radio has surpassed the national broadcaster. Almost 70% of time spent listening to radio in this country is spent listening to independent stations.

While there has been a revolution in the listening habits of Irish audiences in the past 25 years, there has not been a revolution in how broadcasting is looked at, regulated or legislated for. The pitch is still very sloped towards RTE. It appears to us that RTE, with its dual funding and range of services, is undoubtedly a public service broadcaster in large elements of what it does, but stations such as 2FM cannot be described as public service. That contributes to a situation in which we are on an unfair playing field and RTE can have its cake and eat it. There is a certain amount of frustration among our members because we are repeatedly told what a great service we provide, but we have been particularly frustrated in recent months by the lack of progress. The statements of support have not been backed up by practical means. It appears to us that RTE continues to operate on a different playing field. We are governed by a very stringent licensing regime but, unfortunately, the decision on whether to create new services for RTE lies very much within the ambit of RTE. I mentioned 2FM already, but public money is also going to RTE Gold, Pulse and 2XM. They are services which receive millions in public money but are not providing a public service.

There is a great need to act. On the occasion of our 25th year in operation, we feel that the public service we provide cannot be taken for granted and is in danger of being slowly eroded. The situation is being exacerbated by RTE's unlimited commercial mandate, which is damaging our members. We question the appropriateness of some trading practices of RTE, which are effectively being undertaken with subsidy from public money. It appears to us that all resources go to RTE. While I have made critical remarks about RTE, I am not anti-RTE, nor are the independent broadcasters unduly critical of RTE. The Government must act and the Legislature must act to ensure a win-win situation in public service broadcasting for the State broadcaster and for independent broadcasters. We believe a win-win situation is possible.

I have outlined my frustration at what has happened the recent past. In the past week we have seen the appointment of a new Minister, Deputy Alex White. On behalf of the members of the Independent Broadcasters of Ireland, I wish him well and I welcome him to his job. We are encouraged by the fact that he has worked as a broadcaster. We hope he understands that public service broadcasting is not purely the preserve of RTE but is also provided by independent broadcasters. We feel that he needs to hit the ground running and take action before the next general election. His priorities should be to recognise the unique role of both local and independent radio and RTE and the contribution of everyone; to take practical action to ensure that the contribution we have made over the past 25 years has been protected and also that RTE can protect and focus on key elements; and to have the courage to introduce the reforms that are needed.

Our long-standing policies which we have outlined to the committee previously remain in place. We remain consistently committed to these areas - namely, the recognition of our public service contribution; a fund to support independent broadcasters in the provision of public service broadcasting; the amendment of section 108 of the Act to define and limit the commercial mandate of RTE; and the funding of the BAI from the public service broadcasting charge or from the television licence. We have developed a practical and workable model in relation to the public service fund which we believe can be introduced without undermining RTE. In relation to the commercial mandate, we understand that Indecon consultants have undertaken a report, which is with the Minister. The way RTE is regulated is an essential issue to address.

Radio faces a future of change. We have made an enormous contribution over the years through coverage of local politics, local life, civic society and local sport and by providing a voice for people who would not dream of phoning a national station or who would not be considered by the national broadcaster. We are very willing to change and we have worked flexibly to change our practices in recent years. We want to protect our unique relationship with the Irish people. We are all Irish-owned and we want to continue that way. We want to remain universally flexible and accessible and we are willing to be regulated and to operate as responsible broadcasters. We seek courageous, creative and determined political action to bring about positive change.

We hope we can work further with the committee to ensure that change for the better can be brought about in Irish broadcasting so that in 25 years' time somebody else can sit in this seat and look back over half a century of successful independent broadcasting in this country. The jury is out on that at the moment. We are at a fork in the road. It is a case of a breakthrough or a breakdown. We very much hope it is a breakthrough. We look with hope to this committee because we know it is respected widely by the decision makers in the Department and by the Ministers. We assure the committee that we will work unstintingly with the members, individually and collectively, to bring about positive change in the future. I thank committee members for their time.

1:10 pm

Photo of John O'MahonyJohn O'Mahony (Mayo, Fine Gael)
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I thank Mr. Purcell. He has given very robust reasons for the need to support the independent broadcasting sector.

Photo of Michael MoynihanMichael Moynihan (Cork North West, Fianna Fail)
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I welcome the witnesses and those in the gallery to the committee. I congratulate the members of the Independent Broadcasters of Ireland on what they have achieved in the past 25 years. It was a challenging time, and many fine radio stations, as mentioned by Mr. Purcell, have set up a service. We can all name the ones in our own areas. They have a proud record of broadcasting on political, sporting and civic life. There is not a home they do not go into. Given the starting base they had, they are to be congratulated on reaching the milestone of 25 years. I say very well done to them, because much work has gone into all the radio stations to bring them to their current level.

Mr. Purcell is correct in the points he made in his presentation. We are at a crossroads and decision making is required. I looked at the figures over the past two years in particular. On the one side there is the national broadcaster, which receives significant funding from the licence fee, or broadcasting charge, as it will shortly become. On the other side are the independent radio stations and other independent networks, including television, but we are focusing on radio today. Independent radio stations have built themselves up on a commercial level. They fought for their business and they provide what the market wants. Difficult decisions were required in recent years when advertising revenues fell. We could talk for hours about the benefit.

I suppose the IBI has considered how licence revenue should be divvied up in the context of the new broadcasting legislation. Will the delegates expand on section 108 of the 2009 Act which gives a commercial mandate to RTE? The IBI is celebrating 25 years, which is to be marked at a reception later. We need to think about the revenue from the licence fee and determine who is giving best value for money. We have had many discussions with RTE. There are large background teams associated with some programmes of the national broadcaster, but, where some independent programmes are concerned, there is only one broadcaster and perhaps a background team of one or two. The independent broadcasters are providing the service with a skeleton staff. Will the delegates outline their position on section 108 of the 2009 Act to empower us in deciding on our approach?

I congratulate the delegates on a massive job well done. I am delighted Mr. Williams is present. I hope to God that when we celebrate another anniversary, the delegates will be able to say the same again. I congratulate all of them sincerely on what they have achieved. Here is to the next 25 years.

1:20 pm

Mr. John Purcell:

I appreciate very much what Deputy Michael Moynihan said. With regard to the commercial mandate, it is a case of having one's cake and eating it. Mr. Williams will address that issue. We believe 2fm is the clearest example of RTE not operating according to a public service broadcasting remit. In 2013, as I understand it, 2fm received €6 million from licence fee revenue. RTE stations such as Gold and Pulse received approximately €3.2 million. That amounts to €9 million for these stations which have a negligible listenership. While 2fm has a bigger listenership than the others, it does not engage in public service broadcasting.

With regard to the specifics of the Act, I will ask Mr. Williams to comment.

Mr. Scott Williams:

It is our silver anniversary. While we are silver of hair, we are gold of achievement. I thank Deputy Michael Moynihan for congratulating us.

I will make some introductory remarks before answering the question. We are not anti-RTE, which has come across clearly to the committee. We require RTE to be strong and vibrant because we are all part of one sector. There are many initiatives that we conduct with it for the betterment of broadcasting in its many facets. The real elephant in the room is non-indigenous broadcasters. In 2011 there was €879 million worth of television revenue in Ireland, of which a full 43% or €382 million went to Sky Television. Some €225 million went to RTE. At the heart of the point I am making is the fact that we are indigenous. We are just one half of the indigenous equation in the country; RTE is the other half. We very much share its views on that point. We share views on many other points also.

RTE is required under section 108 to maximise its commercial opportunities. That is a statutory requirement. We do not blame RTE for this as it operates under statute. However, we believe it is now inappropriate. RTE's report for 2013 is a long document and contained in it is a lot of fine detail. I found it quite interesting to consider how the allocation of licence fee revenue was achieved. RTE allocates public funding to individual services proportionate to the net cost of the service. The net cost is the gross cost after deducting the contribution from commercial activities. In other words, public funding fills a hole in the budget for a service. We believe this is intrinsically wrong. In other words, whatever is short is made up with public money. When times were good — we hope they will be again at some time in our lives — RTE produced huge surpluses. For what was the licence fee money being used? One should make the analysis and think it through.

Section 108 requires RTE to maximise its commercial mandate. All broadcasting in Ireland is both commercial and public service in nature. Why is it a public service? In this regard, members will have heard the chairman's points. They will agree with us that we provide a very valuable public service throughout the country. We are also commercial. When the Radio and Television Act 1988 was being introduced, the then Minister described the new sector as something that would be akin to public service broadcasting in private hands. How right he was. That is what we have achieved in 25 years. This is the time to rebalance.

We need a level playing pitch as we proceed. When we started, the level was tilted in the State broadcaster's favour. We have managed to bring the listenership over to the other side, but, unfortunately, the funding is still all going in the other direction. We want a level playing pitch in order that the entire broadcasting sector, including RTE and independent broadcasters, can thrive, perhaps not as brothers but certainly as valuable colleagues. We will always compete.

Let me make a point on value and changing section 108. Only last week the former Minister, Deputy Pat Rabbitte, spoke about evasion in the order of 15% of licence fee revenue which is the equivalent of €25 million to €30 million. He referred to "valuable revenue lost to RTE." I was horrified. Why should RTE receive another €25 million to €30 million when it has just produced a small profit for the first time in seven years? The €25 million to €30 million in additional funding is where there is an opportunity for legislators to rebalance. It is from the additional money found that we believe action can be taken and moneys apportioned.

With regard to the licence fee, when €9.72 goes to An Post for the collection of the licence fee, somebody needs to ask why it is so expensive to make us all pay up.

Photo of Patrick O'DonovanPatrick O'Donovan (Limerick, Fine Gael)
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I welcome the representatives of the independent broadcasters. All of the members present are from rural areas, which is no coincidence because of the service offered outside Dublin, especially in rural counties. I remarked on my local commercial station this morning that, prior to 1988, the only voices one heard on radio were Dublin voices. Until that year, one would certainly not have heard backbench Members, nor would one have heard an Opposition Deputy, unless he was Leader of the Opposition. With regard to public service, the case of the independent broadcasters has been well proved during the years by virtue of their listenership.

Regarding State revenue, I have questioned IBI's main competitor at numerous meetings of the committee about its commitment, even to reporting the proceedings of the Houses of the Oireachtas. I have said here before that unless a person has a sleeping ailment, works at night, has a child that will not go to sleep or is being turfed out of a pub at an ungodly hour, he or she does not see the proceedings of the Houses of the Oireachtas because RTE has decided to confine broadcasting them to insomniac's hour. Without the commercial radio stations around the country, people would not know what we do here. They would probably believe we did nothing. From that perspective, the IBI has proved its service.

With regard to section 108 and the opportunities the IBI envisages, the delegates' report states "IBI proposes that the Broadcasting Act should be amended to remove the commercial mandate under Section 108 and replace it with a limit on the commercial reach of the state broadcaster". It also states, "An examination should be undertaken to determine how efficiently the revenue from the Licence fee is utilised". Do the delegates have a figure in mind for the limit on the commercial reach? Do they have proposals in that regard?

When one turns on a digital television, one can tune in to hundreds or thousands of stations all over the world.

What impact does this have on commercial operators?

How might not-for-profit community radio stations be factored into any changes that our guests might envisage in the context of the legislation? The document presented to the committee makes reference to a fund to support public service broadcasting. The committee discussed that matter at length with the previous Minister and RTE in terms of the sound and vision fund. Will our guests expand on how they envisage the fund being used to provide the support in question?

I echo the comments made by the previous speaker in the context of the work done by the Independent Broadcasters of Ireland. There may be further opportunities for the commercial sector to show up the State broadcaster in terms of the deficiencies in its coverage of the democratic process at work in the Oireachtas.

1:30 pm

Mr. John Purcell:

With regard to the impact of hundreds of international stations being available via digital platforms, we are confident that we can continue to compete with those stations as long as we continue to provide a service that is localised, relevant and responsive. However, this ties into the sustainability of the market in respect of our activities. Mr. Collins may discuss the fund to support public service broadcasting in more detail, but I can state that since the previous occasion on which we appeared before the committee, we developed a very detailed proposal for such a fund, which we presented to the previous Minister in February. We did so in the aftermath of discussions with him over a number of months. We took on board his reservations and those very understandable reservations voiced by those concerned with regard to the allocation of public money to private companies, and designed a fund to take account of these. I understand members may have already received copies of the information document relating to the fund.

Mr. Tim Collins:

The proposal relating to the fund is fairly straightforward. When we began to examine this matter, we decided not to consider the possibility of taking funding away from RTE because we were of the view that this would not, perhaps, be helpful. We are of the view that the commercial mandate of RTE needs to be pegged back, both in terms of a more refined definition of what constitutes public service broadcasting and what it, as a State-owned public service broadcaster, should be doing. As independent public service broadcasters, we were also of the view that some State funding should be provided to assist us in financing the element that we are mandated to broadcast under the 2009 Act. The Act essentially states that any organisation that obtains a licence must broadcast 20% news and current affairs. This means that all of the local and national stations have significant news, current affairs and sports coverage operations in place. All of the local stations carried extensive local and European election debates during the recent campaign. We provided 30 or 40 hours of coverage of local election counts with a staff of only 20 people. One of the great difficulties we have encountered in the past four to five years relates to funding this element of our work. Although we are not short of listeners, our funding model is broken.

The only way we can maintain and grow the service into the future is by putting a fund in place to help us to support this element of our output. We envisage that a new fund - separate from the sound and vision fund - would be set up and financed using 7% of the licence fee, which would amount to €14 million or €15 million. We are of the view that the new household broadcasting charge will result in an upswing in revenues as a result of less evasion and fewer collection costs. The previous Minister, Deputy Rabbitte, envisaged that the extent of this upswing would be of the order of €25 million to €30 million. Under our proposals, approximately half of that amount would be invested in the new fund. The process relating to that fund would be very straightforward. The stations would apply to a central body, perhaps the BAI, for funding on a three-year annual budget basis. The fund would be audited and would only be used to support specific programming commitments mandated under the Act, namely, news and current affairs, certain speech programming, local sports coverage and so on - in other words, the public service broadcasting element of what we do. In addition, the fund would be independently audited. We are quite happy to enter into very detailed commitments in the context of the plan we have put forward. Under our proposals in this regard, each broadcaster would be obliged to put together a plan that would be very carefully measured via the use of key metrics, etc. What we suggest in this regard would involve going into far greater detail than RTE is currently obliged to.

We are of the view that this fund would not only guarantee the continuation of the very good work that local and national stations do in the independent sector into the future, it would also allow us to create jobs in communities throughout the country where, quite frankly, it has been extremely difficult for qualified people to obtain employment as a result of the pressures on local media. It is our view that the proposed fund could be extremely positive for communities throughout the country and that it could help to guarantee the future of local radio stations.

Mr. John Purcell:

I referred earlier to the fact that ours is a very diverse organisation. In that context, not every broadcaster would wish to access the proposed fund. For those who would wish to do so, it could prove to be the difference between allowing them to continue to provide the local services which have characterised the success of independent broadcasting during the past 25 years and facilitating the development of a consolidated, regionalised and centralised model such as that which obtains in the UK.

Photo of Patrick O'DonovanPatrick O'Donovan (Limerick, Fine Gael)
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How many members of our guests' organisation would buy into such a fund if it became available?

Mr. John Purcell:

I would say that the vast majority of local stations would do so and many of the regional and national stations would look on it positively. The issue that arises is that if we apply for funding, we guarantee levels of service. In other words, our members would be prepared to access funding and then give a commitment to continue to cover local authority meetings, local sports events, local issues, etc., in return.

Photo of John O'MahonyJohn O'Mahony (Mayo, Fine Gael)
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It would actually be in addition to what our guests are doing at present?

Mr. John Purcell:

No; it would underwrite what we are doing at present. If a fund were established, it would put us in a position in which we could guarantee that we could continue to provide the services that we are all celebrating and that we have been providing for 25 years. Such a fund would also allow us to enhance our services and provide coverage of greater depth. As the Deputy pointed out, we sometimes operate on very scarce resources and with an extremely limited research capability. The provision of a fund would enable us to provide more comprehensive coverage. Failing the establishing of a fund, the appalling vista could be consolidation and regionalisation. As Mr. Williams will attest later, there is a Heart radio station in every town in the UK. The shows on these stations are syndicated from a base in London. We are of the view that it would be appalling if such a model developed in Ireland. We cannot guarantee that the latter will not happen unless drastic action is taken.

Photo of Michael ColreavyMichael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I welcome our guests and wish them a happy 25th anniversary. I understand their frustration and I know that they need much more than patronising comments from members. However, it would be wrong of me if I did not state that the area in which I live would be so much the poorer without independent radio. The loss of the independent radio would be massive to both public service and general broadcasting in every area throughout the country. The fact that listenership figures are on the rise is evidence of that.

Our guests' words did not exactly fall on deaf ears in 2013, because we proposed that a certain proportion of the licence fee should be set aside for local and community radio. Unfortunately, our proposal was not accepted. When the discussions relating to the introduction of the broadcasting charge began, we made the same proposal. I do not know what is going to be contained in the Indecon report but I look forward to reading it. I do not know whether it is intended that Indecon should put forward recommendations in respect of the mix of funding models that exist. However, I am sure it will examine the public service content of independent radio. I spoke to a number of backbenchers when we were drafting our proposal to assign some of the licence fee to local and community radio in order to discover what people think of this matter. I received a fairly standard range of responses from those who would oppose such a development.

There is the idea that money should not be taken from RTE because advertising revenue has gone south for it as much as for anybody else and it is struggling badly. Interestingly, the second point was that these people are in it to make money and there is the question of whether we would subsidise newspapers if their revenue was declining. There are people who do not understand that a big element of what local radio does is public service broadcasting in the truest sense of the term. It caters for local areas.

When Mr. Collins argued that the funding model was broken, I take it he was referring to the reduction in advertising revenue, which has declined almost 50% since 2008. In 2007 and 2008 a report was completed indicating a profit margin of 4%, on average, across stations. What is the level now? I am afraid it could be near zero. There is something wrong with a situation in which the number of customers is increasing but income is going down. That is illogical and we cannot get a complete picture from such a jigsaw.

The statement argued that there must be balance between RTE and independent broadcasters. I would hate to think that we could not have a straight broadcasting service as we need it. In general, RTE does a very good job. Nonetheless, I agree that there are elements being supported financially which are not public service broadcasting, as any fair-minded person would say.

1:40 pm

Photo of John O'MahonyJohn O'Mahony (Mayo, Fine Gael)
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We are under some time constraints so perhaps the witnesses could be brief.

Mr. John Purcell:

We await the Indecon report with anticipation. We were alarmed at the question it appeared to us they were asked to examine, which was whether, if we gave more public funding to RTE and allowed it to take less advertising, a solution would be to increase the statutory number of minutes of advertising for independent broadcasting from ten minutes to 12 minutes per hour. It appeared to us that this came from the idea that if RTE cannot sell advertising, we will allow it to have less advertising and give it more money, while independent broadcasters will be forced to sell more advertising. There is no market to sell more advertising and we cannot sell the ten minutes per hour we currently have. I suggest that if we had 12 minutes of advertising per hour on independent stations, it would go against the wishes of our listeners.

The Deputy mentioned people who argue that money cannot be taken from RTE as there is an underlying point of not damaging the public service. We suggest examination of the stations we mentioned, such as 2FM, RTE Gold, RTE 2XM or RTE Pulse. RTE 2FM received €6 million from the licence fee in 2013 and our argument is that either 2FM should be made a public service broadcaster, or it should not be given any public money, meaning it would have to survive commercially on its own. It is an example of people having their cake and eating it. In the good times we were told that 2FM did not receive any public money.

Photo of John O'MahonyJohn O'Mahony (Mayo, Fine Gael)
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Will Mr. Purcell clarify why he believes 2FM is not a public service broadcaster? We have had the argument with RTE but I would like Mr. Purcell's definition of what it is not doing and should be doing.

Mr. John Purcell:

It seems to me to be largely a pop music station seeking to provide music and entertainment to a younger audience.

Photo of John O'MahonyJohn O'Mahony (Mayo, Fine Gael)
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I notice sport has moved to the station recently.

Mr. John Purcell:

There is some sport on it.

Photo of John O'MahonyJohn O'Mahony (Mayo, Fine Gael)
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I am not defending it.

Mr. John Purcell:

I would venture to argue that there is not €6 million worth of sport on the station.

Photo of Patrick O'DonovanPatrick O'Donovan (Limerick, Fine Gael)
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Will it cover the Connacht final?

Photo of Timmy DooleyTimmy Dooley (Clare, Fianna Fail)
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The Chairman dealt with bias regarding the GAA earlier.

Photo of John O'MahonyJohn O'Mahony (Mayo, Fine Gael)
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I merely chase sporting programmes across local stations.

Mr. Scott Williams:

The RTE report from last year is interesting, taking in arts, education, religion, factual drama, entertainment, music, news, current affairs, etc., across the services. There are entries for RTE Radio 1 but no entries for 2FM. It has €560,000 for "other factual" content and the rest concerns entertainment, music, news, current affairs, etc., on the station. Those of us of a certain vintage might remember that 2FM was set up as the State's antidote to pirate radio, the buccaneers of the airwaves, in the late 1970s, although all we did was give people what they wanted at the time. That is another day's work, but it has led to the sector we have. The brief of 2FM was to be a pop station for those aged between 15 and 34. Approximately five years ago, on the day of a report from the JNLR giving listenership data for radio, we read a press release indicating that RTE was to change the focus of 2FM to those aged between 25 and 45. We could not do this on any of our stations without approval from the BAI, but RTE could do that because it felt like it. The station changed without reference to the BAI because it deals with the Minister. It is a pop station and it receives €4.49 from every licence fee. Its ratings are low and it is not widely listened to. It faces much competition in the pop radio business from both music stations such as mine in Dublin and those across the country, as well as the likes of Today FM. It struggles to pull in a listenership.

I mentioned earlier cost of service, revenue inwards and holes being filled with public money, and this is intrinsically linked to that. The worse RTE fares in ratings with 2FM, the more public money will have to be poured into it in order for it to pay its way. It costs €11 million, but the new head of 2FM, a former colleague of ours, Mr. Dan Healy, stated that there are only 27 people in 2FM, with a running cost of €6 million. It does not stack up.

Photo of John O'MahonyJohn O'Mahony (Mayo, Fine Gael)
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We need to be out of here as close to 6 p.m. as possible.

Photo of Noel HarringtonNoel Harrington (Cork South West, Fine Gael)
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I congratulate the IBI on 25 years of operation and I apologise for being a little late for the presentation. I have been a postmaster and I have benefited from the fraction of the licence fee about which witnesses have complained. It maintains much business in rural areas and we feel strongly about it. That is another day's work.

Will the witnesses flesh out the idea that funding as described would not fall foul of State aid restrictions for commercial entities and how this compares with RTE? There is another minor issue to do with public funds. Quite often, local authorities, State agencies and Departments place public service announcements or emergency information as advertising on independent, local and regional stations. They are charged for that, but I would see those as part of a public service. They would not happen every hour of every day in the week. If public funding came into the private companies, would there be a provision for this so that the public would not have to pay twice to get essential information out there?

Photo of Timmy DooleyTimmy Dooley (Clare, Fianna Fail)
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I welcome Mr. Purcell, Mr. Collins, Mr. Williams and Ms Ní Choisdealbha. It is worth recognising that we regularly have representatives of the IBI before us and they do exceptionally good work on behalf of the independent group of local radio stations. It is nice to have them here to celebrate something.

It is rather rare for members, as public representatives, to invite the Independent Broadcasters of Ireland, IBI, to a reception. As public representatives, they are normally invited to things and, consequently, it is probably in recognition of the work the IBI does that its members are guests of the joint committee on this occasion. I am certainly delighted to participate in its celebration of 25 years service. The stations with which I am most familiar do an exceptionally good job from my perspective. This is not to take from the national broadcaster in any way, but over 25 years the local sector has established itself with an integral mix of news, current affairs and entertainment programmes. I, for one, have never been able to differentiate where the public service remit of the national broadcaster ends and that of the independent sector begins. As far as I am concerned, there is a continuum of public service provided by both entities, if one takes the IBI's members as one. One need only consider the efforts made and the cost associated with the provision of sports coverage by the station with which I am most familiar, Clare FM. Every event possible is covered, which costs a lot of money. To me, that constitutes public service broadcasting at its best and the documentaries produced by local stations are what public service broadcasting is about. There are podcasts available, as well as material that protects and retains cultural identity in certain areas around some national pastimes. There are music and arts programmes all produced to a standard that is comparable with what one would receive from the national broadcaster. This comes at a huge cost that is not and could not be reflected within the sector's commercial remit.

The IBI has a challenge it regularly makes of members about how it can get a piece of the broadcasting charge. It is accepted and recognised that so doing would provide an additional flow of revenue. The joint committee previously heard presentations that appeared to suggest RTE would need more of it, if it was to enhance what it did. That is fine and I do not have a problem with it. RTE will need more money if it is to grow and develop as it should as a national broadcaster. However, I see no reason to believe the independent sector should not be entitled to its fair share of the charge in recognition of its work. The IBI should continue with its work and highlight as much as possible what the local stations do on the ground to preserve and protect communities' identity, which would never be preserved otherwise but which are preserved for eternity because of the work these stations do. This includes the development, recording and reporting of our sporting endeavours, as well as on news and current affairs which do not make it to the national headlines but which are so important to the listenership, often to a much greater extent than what emanates on a national level. Like Mr. Purcell, I would be deeply concerned if, ultimately, one only received syndicated news and content, albeit through local affiliates. Members know to where that ultimately would lead. It would be a regressive step and see us going full circle over 25 years. The point was to devolve effort to local entities and it would be both sad and regressive to see it go full circle. As legislators, members have a significant role in this regard. The IBI has recognised that it is the Minister's call to an extent and, undoubtedly, will be as robust in its presentation. Certainly, however, as a member of the joint committee, I will use every opportunity to preserve and protect the work of the IBI and lobby as hard as I can to ensure it gets a slice of that pie.

1:50 pm

Photo of Brendan GriffinBrendan Griffin (Kerry South, Fine Gael)
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I welcome the delegates and thank them for their attendance. I look forward to seeing the highlights of the meeting tonight on "Oireachtas Report", as I am sure it will be broadcast.

I agree with every member present on the value of independent broadcasters. I can only speak from a County Kerry perspective on the job done in the county by Radio Kerry, a marvellous station that celebrated its 24th birthday last week. Within half an hour in the morning, one can know who is dead, who has been born, whose First Holy Communion or birthday it is, as well as the price of cattle and everything else. It is a fantastic service that is invaluable to communities throughout the county. Moreover, this is not unique to County Kerry because while driving between County Kerry and Dublin twice a week, I get to tune in to all of the other local stations as I pass through the country and the quality and standard are just as high elsewhere and a huge service is being provided.

I have one or two questions. First, is there an estimate of how much advertising is lost by the independent sector because of competition from the subsidised State broadcaster? Does the IBI have figures for an annual value in that regard? I raised the issue of 2fm earlier this year when RTE appeared before the joint committee. As for the public service value of "the Golden Hour", for example, while I do not wish to pick out anything in particular, questions must be asked about the amount being spent on something being provided by independent broadcasters. I do not want this to be perceived as an RTE-bashing episode, as I certainly believe some of the service provided by that organisation is excellent for a small national broadcaster. When one considers what RTE does in a global context, it does an excellent job, but that said, there must be fairness in this regard. I also appreciate the prop being brought in because it makes things very simple and visualises matters. I also agree that as a committee, members should work more towards achieving fairness in this area.

I have one final question which may be somewhat outside the scope of this discussion. Looking to the future and considering how far we have come in 25 years, do the delegates perceive local television to be an opportunity or a threat? As broadcasters, is it something they could consider developing or could they consider moving into that area? Alternatively, is it a completely different field in which they have no interest?

Mr. John Purcell:

I thank members for the range of questions and positive remarks made about the service. On the issue of sport and the coverage we provide, I was speaking to Mr. Tim Collins beforehand - Deputy Michael Colreavy will appreciate this point - who was wondering about the logistics of getting a commentator to Scandinavia to commentate on the Sligo Rovers game. That is not something that will make money for Ocean FM. It will cost a significant amount of money, but it is a service that will not be provided by any other broadcaster in the State. I thank Deputy Timmy Dooley; we truly appreciate the reception aspect, as the turnout from our colleagues around the country shows.

As for the resources in RTE and the resources that would be taken from that organisation, in its review of RTE's funding, Crowe Horwath found it had sufficient resources to deliver the level of service outlined in its five year plan. The director general of RTE, Mr. Noel Curran, is on public record as stating the organisation only needs modest increases in funding to continue to provide the services it provides. We argue that an increase of €25 million to €30 million in additional licence fee revenue or public service broadcasting fee revenue from a total pot of €180 million would not be modest and that, consequently, RTE should not receive it all. I refer to Deputy Michael Colreavy's point about some people asking why should one give money to independent broadcasters which, after all, were businesses. I note ours are businesses that have undertaken something that is the equivalent of a public service obligation, inasmuch as we enter into contracts and state we will deliver a service. Our point is that it is proving increasingly difficult to maintain the service.

If the public wants the service, it would seem fair that if the market cannot support it, the public would.

A point we have not mentioned a great deal is the fact our sector employs approximately 1,500 people throughout the country. In the south east, for example, there are KCLR in Carlow-Kilkenny, WLR, Tipp FM and South East Radio. RTE employs a small regional staff in the area, based in Waterford, whereas we have operations in Kilkenny, Carlow, Wexford, Waterford and Clonmel. We provide very significant employment. On the basis of employment alone, we are worthy of support.

I will ask Scott Williams to address the question of how much revenue is lost to RTE shortly but first I will ask my colleague, Tim Collins, who has done a huge amount of work on the issue of the public service broadcasting fund, to address the issue of State aid. It is something we have looked at extensively in respect of the scheme we put forward.

2:00 pm

Mr. Tim Collins:

I will address the issue of local television because it is interesting. Media are moving together and we are now content producers. Many radio stations will produce content on video. In fact, our station produces content for Irish television which is on the Sky platform. We do reports every month for Sligo and Leitrim. Our station and many other stations put video up on the web. Local television will probably not be broadcast on any other platform aside from the web because it is so expensive to get onto the satellite platforms or any other platform. However, it is certainly something of which many stations, both nationally and locally, will do more. They will start to produce content on many different platforms to try to reach the maximum number of people.

The state aid issue is somewhat ironic. RTE and TG4 are both commercial entities so the Government must apply, under the state aid rules, to allow itself to give them licensing revenue. The irony is that the same state rules are being used against us, so what is okay for RTE and TG4 is not okay for us. We have taken the trouble to get a great deal of legal advice on this. The advice from what are probably the best competition and EU lawyers in the city is quite clear. They are of the firm view that there is no state aid bar to funding the public service content on local and national stations in the independent sector. That is because we have a public service obligation under the 2009 Act. We are obliged by that Act to produce a certain amount of public service content, so it is perfectly within the ambit of the treaties as they now stand for the State to apply to the European Commission for a scheme that is either state aid or a scheme that does not come within the definition of state aid. There are a number of different ways we can do it. Article 107.3.c of the treaty would allow the State to put together a scheme which would not fall foul of the state aid rules. We can provide the committee with a copy of the legal advice we have, which is very clear on that.

Photo of Noel HarringtonNoel Harrington (Cork South West, Fine Gael)
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Where public bodies would broadcast notices through the broadcasters, if the broadcasters got public money on the one hand and got paid on the other, it would be a double payment.

Mr. John Purcell:

We would be open to looking at such issues. However, it points out an anomaly. Earlier there was a question about why we should get support from public money. That highlights the type of role we could play, but it would be out of the question. A huge number of organisations are obliged to advertise in newspapers and people never ask about that. The newspaper industry is non-regulated. The newspapers can publish whatever they wish and are not governed by a regulator. We would be very open to it, but there are certain ironies and contradictions inherent in it.

Photo of Paschal MooneyPaschal Mooney (Fianna Fail)
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My apologies for my absence earlier. There was a series of votes in the Seanad which I had to attend. I must also declare an interest. I present a programme on Ocean FM and also on Sunshine radio, so I would be seen as a biased observer.

Photo of Michael ColreavyMichael Colreavy (Sligo-North Leitrim, Sinn Fein)
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It is a very good one.

Photo of Paschal MooneyPaschal Mooney (Fianna Fail)
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I thank my constituency colleague. It is nice to know he is watching my back. I compliment Mr. Tim Collins and Ocean FM on winning an international award recently for a documentary. Two matters arise from the comments that have been made. I believe this committee should support the view expressed by Tim Collins, that there are no barriers to providing state aid for public broadcasting obligations at local level. The committee should support that and when the time comes, we should make a decision on it.

Does the group collectively have a policy on the promotion of Irish artists? I am not talking about what RTE interprets as Irish artists, which is anything that is close to U2. Beyond that, it does not consider them. There is an indigenous country and Irish music industry and a strong lobby for its promotion. The fact that 400,000 people bought tickets for the Garth Brooks concerts surprised the Dublin 4 set. It proves there is a huge market for that type of easy listening, country and Irish music. I applaud those stations, many of which are represented here today, that have a policy of promoting Irish artists. I will not single them out, but they know to whom I am referring. I am talking about daytime promotion. However, there appears to be a perception that not all local stations are subscribing to that and that some go some of the way and some do not. That is the reason I ask if the group has a policy in that regard.

The local radio set-up has maintained, enhanced and provided valuable entertainment and, importantly, employment for the Irish music industry. Without it over the past 25 years, the industry would have died long ago. There is no question about that. I believe this is important now, particularly with a newer generation of country and Irish artists who have gone mainstream. Nathan Carter is able to come to a Dublin city theatre and fill it, as can Derek Ryan. Ten years ago that would not have happened. That is primarily due to the guys and girls in local radio. The network of Dublin stations does not necessarily promote it, but the stations have acknowledged it, at last. Building on that, has there been any serious debate about it within the representative group and does it have any policy on it?

Ms Lisa Ní Choisdealbha:

We do not have a policy on it but the reason so many country and Irish artists are promoted on local radio stations is that the stations reflect the interests of the people who are listening. The Senator mentioned Nathan Carter. I assume Midwest Radio was probably the first station in Ireland to broadcast Nathan Carter, long before the stations in Dublin ever heard of him. That is because the listeners of the area are interested in that. In addition, we do a great deal of work with the Irish Music Rights Organisation, IMRO, and the Irish Association of Songwriters, Composers and Authors, IASCA, on the promotion of Irish music. The biggest problem we found with them is exactly as the Senator mentioned, that they tend to focus on musicians and Irish artists that are more mainstream as opposed to the country and Irish artists.

Photo of Paschal MooneyPaschal Mooney (Fianna Fail)
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They do not even focus on folk and traditional, apart altogether from country and Irish.

Ms Lisa Ní Choisdealbha:

Then one sees Clare FM, which has an hour or probably more of traditional music every night. That is what the people of Clare wish to hear. The stations reflect what the listeners want. In Dublin, listeners to FM104 probably do not wish to hear Nathan Carter, but Dublin listeners also have Sunshine radio instead.

Photo of Paschal MooneyPaschal Mooney (Fianna Fail)
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I am trying to find out if there is a policy that could be brought forward that might bring pressure to bear. I fully appreciate that local radio must be concerned about commercial realities. I am not suggesting going so far as a quota, but merely pointing out that some stations have a daytime policy of including it but that many others do not. They do not feature these artists on their daytime schedules. They do it at night, but most stations probably do it at night.

Mr. John Purcell:

All stations will play between 25% and 30% Irish music. There is a lack of uniformity around the country as different people respond to the markets in different ways. That is part of the richness and diversity of what is happening with the stations, but it is an area we could probably investigate.

Photo of John O'MahonyJohn O'Mahony (Mayo, Fine Gael)
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Perhaps this discussion can continue at the reception or in another forum.

I thank Mr. John Purcell, Mr. Tim Collins, Mr. Scott Williams and Ms Lisa Ní Choisdealbha for their presentations, as well as for their robust defence and advocacy of their requirements. If they keep banging on the door long enough it will fall in at some stage. We wish them well for the next 25 years.

I thought at one stage that Senator Mooney was making Garth Brooks an honorary Irishman.

2:10 pm

Photo of Paschal MooneyPaschal Mooney (Fianna Fail)
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I am not so sure after the last few days.

Photo of John O'MahonyJohn O'Mahony (Mayo, Fine Gael)
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If the Senator had been here earlier, he might have solved another problem we were discussing then.

Photo of Paschal MooneyPaschal Mooney (Fianna Fail)
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Is the Chairman taking up the suggestion I made? Can we do that? Legally there is no barrier, but the Government seemed reluctant to move in this area.

Photo of John O'MahonyJohn O'Mahony (Mayo, Fine Gael)
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We can discuss this at an appropriate meeting and the Senator will certainly get the floor then.

Photo of Paschal MooneyPaschal Mooney (Fianna Fail)
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Okay. That is fair enough.

Photo of John O'MahonyJohn O'Mahony (Mayo, Fine Gael)
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As there is no other business, we will now adjourn the meeting until 9.30 a.m. tomorrow. At that time we will have concert promoter, Mr. Peter Aiken, and the GAA representatives in before us. We will finish on that note.

We will now proceed to the plinth for a photograph before moving on to the Members' private dining room for a reception afterwards. I ask all members to proceed out to the plinth. Is that agreed? Agreed.

The joint committee adjourned at 6.22 p.m. until 9.30 a.m. Wednesday, 16 July 2014.