Thursday, 14 November 2019
Financial Challenges Facing RTÉ and its Revised Strategy 2020-2024: Statements
I thank the Business Committee for scheduling this important and necessary debate. This has been a period of profound challenge for media, both local and national. Everyone in this House, as evidenced in repeated debates, recognises the important role of broadcasting in delivering a vital public service in terms of facilitating political debate, reflecting the concerns of communities and providing a forum where issues of an Irish interest can be discussed, as well as reflected creatively through drama. There is a strong desire to see media supported in delivering that important public service.
We are currently witnessing a profound change in the way people are consuming media and this is having an enormous impact on broadcasters of all types. In the case of RTÉ, Members will be aware that in the past five years, the organisation's costs have increased significantly, by approximately €28 million, but it has not been able to grow its non-licence fee or commercial revenue. What was a break-even point for RTÉ in 2013 or 2014 has now become a deficit.
Clearly RTÉ has a financial challenge facing it as well as this deeper challenge of how to reposition a public service broadcaster to offer vibrant services to an audience whose methods of consumption of media are changing very quickly. That is why I welcome the work the management and board of RTÉ have put in to develop the plan they now have. I know a lot of attention has been placed on the elements of cost containment and cost reductions that have been a part of this but equally important are the efforts by RTÉ through this plan to reposition its offering and to strengthen areas such as its online presence and its capacity to reach new audiences and provide the flagship product that can attract audiences in an increasingly competitive environment. That presents a challenge for all broadcasters.
As Members know, it has been working on the development of its plan for a number of months, during which time I have met with RTÉ. Unfortunately, the plan was leaked prematurely, which unsurprisingly created difficulties for workers who were hearing from the public media, rather than directly from RTÉ. That will always leave a bad taste. The plan is important in its capacity to reposition RTÉ. The plan also looks to Government to provide additional resources. In the last five years, Government has provided increased resources. In 2018, €10 million went into RTÉ and the House will be aware the only way Exchequer money goes into RTÉ is through the social welfare Vote where a payment is made by the Exchequer in lieu of the licence fee that would be paid by social welfare pensioners who have the benefit of a free TV licence. That is the only area in which Government, under current structures, provides direct Exchequer support.
The House will know from previous debates that the position of Government has been that we had a working group appointed by my predecessor, Deputy Naughten, to examine the licence fee. There is no doubt the licence fee is no longer the sort of long-term foundation we can have for funding broadcasting. It has a couple of problems with it, one being the high evasion rate, which went as high as 14% at one point and is now in or around 13% and has seen some improvement. The other problem is confining the licence fee to the traditional ownership of a television set. What has been proposed by the working group and accepted by Government is that we should immediately tender out the collection of the licence fee to bring down that evasion rate from 13%. Where that has been done in other jurisdictions, the evasion rate has come down to around 7%. That is one immediate source of improvement we can develop. The working group was also honest in advocating for us to move to a device-independent charge and that such a change would represent a significant shift in the way we approach charging. It said time would be needed to work out the detail of it and to work out its acceptance at a broader level of the expanded base that would be proposed. The working group has proposed that the licence fee contract would be for five years and that in the intervening period, work will be done to put in place that long-term, device-independent charge that would be a firmer base for the licence fee. That would extend the base of the licence fee by about 10%, according to estimates.
We are faced with a number of issues. One is the long-term direction of travel for public service broadcasting and to evaluate if RTÉ has got that direction of travel right and if this is a secure base on which to build a new public service broadcasting model that will see its capacity to grow revenue. We also need to continue to repair the funding part of it. Government recognises there is a role for it and for this House in reforming that funding base. In previous debates we have had here, there has been a very strong belief in the House that as well as the funding of RTÉ and TG4, the 7% of licence fee money that currently goes to the sound and vision fund, which is available to fund non-public service or publicly owned broadcasters to support innovation and content and individuals within the private delivery of content, should also be expanded. A desire has been expressed in the House that we would have a broader base of support, where public service elements of a wider range of broadcasting could be supported. That is another challenge we need to factor into the work we are doing. As Members know, the Broadcasting (Amendment) Bill 2019 is before the House and that will provide for some easing in the fees that are paid by broadcasters. It will also provide the legal underpinning to contract out the licence fee collection.
This is the start of a process and Government is committed to working closely with RTÉ in the development of a long-term strategy that will work for the public who want to see high quality broadcasting. There is also a challenge in understanding the changes that are happening and how public service broadcasting can reposition itself. This is not a challenge that is unique to Ireland. We are seeing similar challenges facing other public service broadcasters, particularly public service broadcasters that, like Ireland, have a mixture of licence fee income and commercial income. The reality with commercial income is that the lion's share of growing advertising spend is increasingly going to the online alternatives, rather than to traditional media advertising. That is putting a squeeze on the sources of funding for the current model. This is a time when we need to give considerable thought to how we proceed with these changes. There is no doubt RTÉ's plan is an important contribution from those charged with defining a pathway for public service broadcasting and an important first step. We need to evaluate that in the first instance and we also need to look to the future and look to how we can build a broad base to support the sort of content everyone in this House believes we need to see for the Irish citizen. That poses a challenge in a world increasingly dominated, as Deputy Lawless will know, by fake news and alternative sources whose validity is often open to question and whose capacity to manipulate people from behind the scenes is undoubtedly a worrying trend and feature of modern social and alternative media.
I thank the Business Committee for the opportunity to debate this and I look forward to hearing the views of colleagues.