Mr. John Purcell:

I thank the committee for the invitation. The Independent Broadcasters of Ireland, IBI, represents 34 radio stations of all natures throughout the country. The stations broadcast to a listenership of 2.5 million people daily. We are very aware of the importance of the radio sector to Irish life. We have concerns about fairness in the sector and its regulation and funding. We want to see changes made in the public interest. I thank the members for having us today.

Let me begin by discussing radio in general. Radio was first introduced in Ireland in the mid-1920s with the launch of 2RN by President Douglas Hyde. At that stage, Ireland was a different country, and the thinking and model were different. The economy was very different. Ireland is a different place but, in many ways, the position of the State broadcaster remains the same in terms of its having a monopoly in many areas.

Since the late 1980s, with the 1988 Act, independent radio came into being. Many stations have been in existence for 24 years. Some, such as mine, are of more recent vintage. KCLR, which I operate, is in operation for just nine years. There are 34 different radio stations around the country. It is a very broad church, ranging from youth stations and full service stations to national stations. Many members will be familiar with these stations and will be regular contributors to them. On the economic side, it should be remembered that our radio stations are significant employers. We employ approximately 1,500 people in the sector and operate in every county.

People often ask about listenership in general and how it is measured. An independent survey, the JNLR, is undertaken in co-operation with the Broadcasting Authority of Ireland, the independent stations, RTE and the advertising authority. The research shows that 2.5 million listeners tune in to independent radio every day. One can compare this with RTE radio, which includes Radio 1, 2fm, Lyric FM and Raidió na Gaeltachta. Some 1.2 million people tune in to these every day. The survey shows that seven of every ten minutes spent listening to radio in Ireland are spent listening to our members, the 34 independent stations. The document we have submitted shows a breakdown by franchise area of the market shares of our members vis-à-vis RTE. In every franchise area in the country, the combined independent market share far outstrips the combined market share of RTE.

People wonder why independent radio is so successful. In many ways, we are the most successful independent sector in Europe. We believe this is because of our keen focus and awareness of what our audience wants. It is also because of the very high priority accorded to public service broadcasting by our members. We are pleased that the public service role of independent stations has been widely acknowledged by successive Ministers, including the current one.

We provide a wide range of coverage that is not available anywhere else. This includes the coverage of local elections, local GAA matches and specialist programmes. My station has an education programme. This, to the best of my knowledge, is not done by the national broadcaster. We have business and farm programmes and we are out and about at events. I refer to coverage and programming that would not be and is not provided by anybody else.

We are concerned about the future. I do not intend to go into considerable detail on the overall media landscape, nor do I need to elaborate on the difficulties that the newspaper industry is experiencing. Owing to the stress the newspaper industry is experiencing, many people are finding that the amount and extent of local coverage is decreasing in many areas.

In television, for example, the market is fragmenting considerably. While RTE enjoys a considerable share of the Irish television market, a significant amount of its coverage is actually foreign programming. Television is very challenging and it is difficult for RTE to compete with the myriad of foreign channels. We recognise that and believe RTE must be supported to survive in that environment. The Internet enjoys free access but pay walls will become an increasing feature of it as content migrates online and people seek to generate revenue.

Radio maintains its considerable popularity in the Irish market. Approximately 87% of people tune in to radio at some stage every day. In Ireland, radio provides and broadcasts approximately 100% Irish content.

The success of radio is because of the unique relationship that has existed. It is on many different platforms and universally accessible. However, nothing can be taken for granted. The radio sector needs to be nourished and encouraged so it can continue to provide the coverage it provides at present. The local radio network, in particular, and independent radio, in general, make a great contribution to the cultural identity of the country and the individual identities of the communities they serve.

This needs to be fostered and nourished.

As I mentioned, economically we are in very difficult times, and a look at the advertising revenue for most of our members will show that between 2008 and 2011 revenue dropped by around 40%. That is on average, but in some cases it has dropped by even more. At best, 2012 has been a flat year. Conditions, due not only to the economic downturn but to general fragmentation, continue to be exceedingly difficult. RTE, while also experiencing a huge drop in its commercial revenue, is cushioned somewhat because of the continuation of the licence fee. I will take a quick look at the model of how radio in this country is funded. RTE receives money from the licence fee. It also operates commercially and receives a huge amount of commercial revenue. It benefits from a large amount of funding from Sound and Vision, the fund established by the Broadcasting Authority of Ireland to do special programmes, projects and content sharing. The independent broadcasters of Ireland rely almost entirely on commercial revenue. We receive some Sound and Vision funding but this is almost negligible, a point to which I will return.

I stress that in raising the issue of the fairness of the broadcasting environment in Ireland, we want a win-win situation. We do not want to be safeguarded, nourished or protected at the expense of RTE. We firmly believe, and are pleased to go on the record as saying, this country requires a properly resourced RTE, but equally it requires a properly resourced independent broadcasting sector which is viable and sustainable, because if this does not happen, the cultural identity and the service we provide could be undermined.

We have a good relationship with RTE but I will address in some detail where we believe there is unfairness in regard to the broadcasting landscape. RTE is dual-funded inasmuch as it receives licence fee revenue and commercial revenue, which it has to earn. In the context of the model of dual funding in Europe, RTE is towards the extreme level, but the trend in Europe is in the opposite direction, with a trend towards decreasing the 50-50 mixture of commercial funding and licensed funding.

Section 108 of the Act obliges RTE to exploit commercial opportunities and maximise its revenue. We believe this damages RTE and makes it lack a clear focus entirely on public service. We believe RTE operates in an inefficient manner. Its salaries are way above those of the industry and the cost for the delivery of the service it provides is way out of line with what our members can deliver. For example, Newstalk, the national talk radio station, operates on a budget which is roughly one fifth that of RTE Radio 1.

There are two systems of regulation. We are regulated by the Broadcasting Authority of Ireland, as is RTE, but there are large areas of its operations where it appears to us that RTE can operate without recourse to the Broadcasting Authority of Ireland. In regard to the funding of the regulator, the independent sector funds the Broadcasting Authority of Ireland entirely from its commercial review. We believe the funding of the regulator through RTE is subsidised by the licence fee.

I mentioned earlier the Sound and Vision scheme, which accepted the principle that funding from the licence fee should be made available to independent broadcasters. Many independent broadcasters seek to access this funding. However, there are many shortcomings in this funding inasmuch as it is restricted to pre-recorded programming of a specialist nature. Some 80% of the funds allocated to the Sound and Vision fund, which is intended to foster independent broadcasting, find their way back to RTE, and we note with some concern comments by the director general of RTE that it intends to increase its focus on sourcing funds from the Sound and Vision scheme. This is not in line with what we believe the fund was established to provide.

We need to fundamentally rethink the role of State-owned broadcasters. They should focus on services that are needed in society which would not be provided otherwise. Among state broadcasters in Europe, RTE is towards the highest end of purchasers of non-Irish or American drama content, for example. RTE should concentrate on public service broadcasting which meets the programming, cultural and broadcasting needs that cannot be provided in a commercial setting, and it should be supported and properly funded in that regard. There is a need for debate and a radical overhaul of how public service broadcasting is funded so that a healthy broadcasting sector, both in RTE and in the independent sector, is created.

We are looking for a fair and balanced broadcasting sector that can serve the entire community. I hope I have given some indication of where we believe it is unfair. The State broadcaster needs to operate within a clearly defined mandate. Unfortunately, the Act obliges RTE to chase ratings and maximise its commercial operations and this puts undue pressure and an unfair mandate on RTE when it should be entirely focused on public service broadcasting.

We too are providers of public service broadcasting and we seek fair treatment so that we can continue to have a healthy independent sector into the future, providing news, current affairs and sport to our 2.5 million listeners and providing an alternative voice to the State broadcaster, an alternative view to a Dublin-centric national broadcaster and localised coverage reflecting life throughout the country. There are four main areas in how this can be achieved: first, the creation of a public service fund which would support public service broadcasting on independent stations; second, revenue from the uplift from the new public broadcasting charge, which we welcome; third, defining and limiting the commercial mandate of RTE; and fourth, in the interests of equality and fairness, funding the Broadcasting Authority of Ireland through the public broadcasting charge. I thank members for their attention and look forward to their questions.