Oireachtas Joint and Select Committees

Tuesday, 10 December 2019

Joint Oireachtas Committee on Communications, Climate Action and Environment

Future Funding of Public Service Broadcasting: Discussion

Ms Dee Forbes:

I thank the committee for inviting us. The invitation came just before we made announcements on our revised strategy, but the indicated topics the committee asked us to discuss, around the future funding of public service media and the value for money of our indigenous and acquired programming, are important and timely considerations.

First, let me address the Report on the Future Funding of Public Service Broadcasting, published by this committee in November 2017. As members will recall, we welcomed not only the findings of this report but also the depth and breadth of the committee’s research, engagement and consideration of this topic. The report was based on original research, data analysis, a wide-ranging stakeholder consultation, a full day’s conference and debate, and substantial discussion and consideration by the committee members. The report made a number of clear and well-informed recommendations that were widely accepted and endorsed within the broader media sector.

In 2018, a decision was taken by the then Minister, Deputy Naughten, to set up yet another working group to look at the future funding of public service broadcasting, and the findings of that group were presented to the Minister, Deputy Bruton, earlier this year. In August 2019, the Minister, Deputy Bruton, made a formal statement in this regard, acknowledging the importance of the protection of public service broadcasting, stating:

Public service broadcasting is more important now than ever. Independent, objective reporting of domestic and international affairs is crucial.

He also acknowledged that audiences were increasingly moving online for their media consumption and that the licence fee system would need to adapt accordingly. However, the remedy proposed was that the licence fee collection would be put out to tender and that the term of contract would be for a five-year period. Given that the collecting agent would likely be contracted from 2021 onward, this would, in effect, delay the transition to a media charge for close to seven years from the point of announcement. That is completely untenable.

Evasion is now almost 13%, resulting in the loss of some €25 million per year. By virtue of outdated legislation, a further 11% of households, and the figure is growing, do not pay the television licence and yet can consume public service programming on their online devices. By way of example, for the recent Ireland v. Russia Rugby World Cup match, we had near equivalent viewership on the RTÉ Player live streaming as we had watching the match on RTÉ 2. This lag in legislation is resulting in a further loss of €20 million in public funding annually. Licence fee receipts are down against forecast for this year, and have been for the past number of months, making a difficult financial situation even more acute for us and for the industry. Ireland’s television licence system is irrevocably broken and is no longer capable of properly sustaining public service broadcasting or Ireland’s broader audiovisual and creative sector.

All that said, against this reality, RTÉ is clear that it must also take action to change to remain sustainable and relevant for Irish audiences. RTÉ has already made significant changes to the organisation in recent years, but the way media is being consumed by audiences everywhere is changing and we need to evolve even further if we are to meet audience needs effectively. The challenges that lie ahead are many and include the following. With regard to global trends, the media landscape worldwide is changing at a pace that has exceeded all forecasts. The rise of the media superpowers and the potential impact on dilution of national culture within a small country like Ireland should be a matter of real concern. The next challenge concerns audience shifts and patterns.

Audiences, especially younger people, are changing the way that they select and access media, and we need to meet these audiences where they expect to find us, especially in terms of our online services. Wide-ranging budget adjustments are required to stabilise RTÉ’s finances and ensure increased investment to deliver the type of service and content that we know our audiences want. This means creating greater efficiencies within the operating costs, new work practices, more efficient use of the regional studios and other pay-cost related measures. As I have said on a number of occasions, it is not possible for RTÉ to continue to operate from a position of deficit. We need to reduce projected costs by €60 million over the next three years. This is in addition to the reductions of 23% on operating costs achieved between 2008 and 2018. To be clear, many of these changes need to happen and will happen irrespective of licence fee reform. RTÉ’s programming and service choices will also need to be refreshed and be under constant review to ensure that these remain relevant and impactful for audiences. This leads me to this committee's secondary point of interest, namely, value for money and indigenous and acquired programming.

The current licence fee costs the equivalent of 44 cent per day, of which RTÉ receives the lions’ share, with the BAI's sound and vision scheme also receiving support. For this 44 cent per day, RTÉ deliverscomprehensive local, national and international news in both English and Irish. We retain the largest network of regional correspondents of any media outlet in the country. We also provide dedicated reporting from London, Brussels and the US. RTÉ provides all Irish language television news for both RTÉ and TG4. In terms of investigative reporting, this year alone RTÉ has brought to public attention investigations into crèche standards and regulation, animal welfare issues within the greyhound industry, child sexual abuse allegations in certain scouting organisations, and challenges to the regulatory standards by some quarry companies and their impact on the Irish landscape.

We have covered essential national moments on a free-to-air basis, from the big wins at tournaments such as the Rugby World Cup in Japan, the GAA finals in Croke Park, the Irish women’s hockey win in Donnybrook and the women’s Rugby World Cup journey this summer.

Culture Night, Wexford Opera and next year’s Galway 2020 partnership are all testimony to our support and commitment to the promotion of national arts and culture, as is our ongoing RTÉ Supporting the Arts scheme, which promotes and supports approximately 150 arts and culture events throughout the country each year.

We can shine a spotlight on key public issues such as health and well-being with shows like "Ireland’s Fittest Family" and "Operation Transformation"; the value of family, community and the development and well-being of children through a series like "Raised by the Village"; or the recent focus on climate change with RTÉ 's climate week, culminating in a debate in this house with young people from every constituency in the country, which was a global first.

RTÉ hosts Ireland’s only national dedicated Irish language radio service, Raidió na Gaeltachta, and the strengthening of our broadcast partnership with TG4.

We offer a wide ranging celebration of music of all forms,from the Choice music partnership and the 2FM Rising initiative, the 2FM Studio 8 sessions, and Other Voices, all of which support and promote new young Irish acts. We provide support for traditional music through Ceili House on Radio 1 and the recently launched Irish Folk Awards, and for classical music through Lyric FM, and the RTÉ National Symphony Orchestra’s Music in the Classroom initiative, to name just a few.

We support discussion and debate, whether that is on any one of our radio service which reach more than 2 million listeners each week, with audience participation programmes such as "Liveline" with Joe Duffy or "Claire Byrne Live", or the topical discussions that feature on flagship entertainment programmes such as "The Late Late Show". All of these programmes elevate awareness and engagement on the topics that matter most to Irish audiences every day. Beyond these, RTÉ provides many more moments of entertainment, celebration, revelation and reflection.

It is fair to say that aforementioned represents good value for 44 cent a day per household, especially in comparison with the subscription costs to other media services, none of which offers anywhere near this level of Irish perspective or output. In terms of value, it is also useful to compare RTÉ's spend and services with other international public service media providers. In terms of our nearest counterpart, BBC 1 costs were £1.106 billion and BBC 2 costs were £381 million, consuming the bulk of the £1.678 billion spent by BBC on its television output in 2018. All of RTÉ's services are delivered for less than the BBC spends on its secondary television channel. The total revenue available to the Norwegian public service media provider NRK is €600 million while the Finnish public broadcasting service YLE revenue in 2018 was €475 million. RTÉ is providing a public service offering of equivalence with much less revenue. There is no doubt that national media services are struggling with the haemorrhaging of commercial income to the large-scale digital players in particular. This should be a matter of concern for all of us. It is a false comparison to perceive RTÉ as being exempt from that struggle or well-off by comparison. Our remit is different, our responsibilities are greater, and our costs reflect that.

There will always be things that our audiences would like to see us offer more or less of, depending on personal tastes and interests, but in overall terms, RTÉ offers a broad range of services with good levels of cost efficiency. RTÉ has exercised significant cost control, resulting in its 2018 costs being almost 25% lower than a decade ago. While RTÉ’s costs in the past three years have increased by a modest 6%, this reflects increases in the cost of making programmes and in the cost of competitive rights, both of which outstrip typical inflation, as well as significant public service obligations. Cost efficiency is routinely scrutinised by our regulator, the Broadcasting Authority of Ireland, and on more than one occasion by NewERA. On each evaluation, the organisation has met the metrics and the standards that were set.

The following is the breakdown of acquired programming versus home-produced programming within RTÉ’s overall output and spend. In RTÉ One, the total spend on indigenous Irish programming was €110.4 million and the spend on acquired programming, including a portion of spend to Irish acquisitions, was €14.7 million or approximately 12% of the overall spend. In RTÉ 2, the total spend on local programming was €42.2 million and the spend on acquired programming was €9.5 million or approximately 18% of the overall total of €51.7 million. RTÉ’s use of acquired programming within its schedules is considerably less than many other public service media organisations of equivalent scale. For example, the Swedish, Danish and Finnish public broadcasters feature international programming as more than 50% of their overall schedule. It is a criteria that the BAI tracks within its assessment of performance every year. On RTÉ One, the number of hours of local content was 76%, a little over the target of 75%. On RTÉ 2 it was just under 40% which was also within the target range. Acquired programming has an important role to play in all public service media schedules. It brings high-quality content of all types from around the world at a very competitive price. Integrating programming from other countries can add to the diversity of the schedule and enhance our perspective on the world. For a smaller country like Ireland, acquired programmes can help balance the running costs of individual service and enhance complementarity and choice within the overall live viewing offerings in particular.

As the RTÉ Player continues to evolve, we have been increasing the rights access to international programming and we have been increasing our video-on-demand access within all new negotiations, offering additional value and opportunity to view for our viewers, and this will continue as on-demand becomes ever more popular. In this way, some of the best content created on an international basis is made available on a free-to-air basis, to Irish audiences. However, it is indigenous Irish programming that ultimately is of most value in terms of helping to define the character and distinctiveness of national public service broadcasting, and it is the area in which we have ambitions to invest more in the years ahead. As noted in the Broadcasting Authority of Ireland's Mediatique report of 2017, the most recent comprehensive report on the overall national media market, expenditure on original Irish TV content is dominated by the public service broadcasters, led by RTÉ. Although some of the other commercial services such as Sky would have a larger overall spend on content offerings, only a very small percentage of this is on original Irish production. Investing in Irish programming is also the way in which RTÉ can most meaningfully contribute to the ambitions of the national audiovisual action plan and how it can help create real stimulus within the creative economy.

Ireland punches above its weight with regard to the talent that is available, internationally recognised independent production companies, BAFTA winning directors, and Academy Award winning animation. Over the years, RTÉ has been privileged to work with some of Ireland's finest actors, directors, writers, producers and independent companies. In 2018, RTÉ invested just over €40 million in the independent sector, but that pales in comparison with what our spend once was.

Apart from the impact on RTÉ, this sector has also been severely adversely affected by the moneys lost through Ireland's outdated and inefficient collection system. Although RTÉ remains the largest commissioner of indigenous Irish content, spend on this important element of national storytelling lags behind its potential. The real cost is the lost opportunity. The effects of this are threefold. The creative economy is deprived of much-needed stimulus. Public service broadcasters are a key investor in and showcase for independent production companies. Many of most talented programme makers, screenwriters, actors and comedians leave for the UK, US and beyond. It is a drain in talent that a small country like Ireland cannot afford. Perhaps most importantly, Irish audiences lose out. Indigenous programming and journalism suffer, repeats become a feature of schedules more than is desirable, and audiences switch off from national services in favour of international competitors, which means less engagement with national topics and national culture. Ultimately, this encapsulates the nub of the current position and what is at risk.

The challenges being faced are a serious threat to the future of public service broadcasting at a time when public service media, with a publicly owned national service to reflect Ireland's voice and identity, have never been more important. It has material consequences for the audiovisual, sports and cultural sectors of the country. RTÉ has a plan to address this, but unless there is commensurate policy and legislative action, then public service media will potentially be weakened irrevocably. Less than two weeks ago, "The Late Late Toy Show" attracted a live audience of more than 1.3 million viewers, or 1.7 million in total when one adds worldwide streaming. That show was about many things. It was a big show with brave voices, electric performances and a lot of fun. At its core were the stories and experiences of some remarkable Irish kids. The nation listened and we witnessed a huge outpouring of support for this incredible showcase of talent, diversity and inspiration. It showed yet again that coming together as a community is a big part of who we are. That is something that we should all fight for.

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