Seán Canney (Galway East, Independent) | Oireachtas source

I will keep going. It is accepted that all media, whether public service broadcasters or other local and national media, are experiencing profound financial challenges as the public and consequently commercial advertising revenues move away from traditional linear TV schedules towards content streaming services and social media. In the past, improvements in economic growth would have generated an increase in commercial revenues through advertising but this is no longer the case due to the shift towards digital advertising, of which Google and Facebook absorb an estimated 73% of revenue. RTÉ continues to face myriad national and international competitors, many of which are resourced to produce high-quality content and compete for premium content. In the advertising market, the challenge of UK opt-out channels remains, and there is an ongoing impact due to uncertainty on advertising spend caused due to Brexit.

These trends, alongside evasion rates and challenges relating to the TV licensing model, are having a critical impact on RTÉ's revenue and financial sustainability. Operating losses have been recorded in each of the last four years. RTÉ has been unable to grow its commercial revenue since 2014 while its costs have grown by €28 million. While revenue from the TV licence increased by €10 million over the same period, RTÉ's financial position has deteriorated.

In submitting its revised strategy, RTÉ has sought assistance and additional support from the Government. In August, the Government accepted the recommendations of the working group on the future funding of public service broadcasting for reform of TV licence collection. In line with the recommendations, TV licence fee collection will be put out to tender when the enabling legislation, the Broadcasting (Amendment) Bill 2019, is enacted. This recently passed Second Stage in the Dáil. An amendment to the current legislation is required to allow a collection agent to be appointed by way of public tender and this will be brought forward on Committee Stage.The working group's report suggests competitive tendering for licence fee collection has the potential to bring greater efficiency and effectiveness and thereby improve compliance. A five year contract for the service will be put in place, allowing the successful bidder the opportunity and incentive to invest in the system of collection and reduce the evasion level from its current rate. The Government has also agreed that at the end of the five year contract period, the licence fee should be replaced by a device independent broadcasting charge which would take account of technological change and enable the sustainable funding of public service content in the long term. It is estimated that 10% of homes access content on alternative devices for which one does not require a television licence under the current regime.

RTÉ is funded by a combination of licence fee income and commercial revenue. The only element of Exchequer funding is that which comes from the Department of Employment Affairs and Social Protection for free television licences. The recent budget was drawn up against the background of a hard Brexit, with the consequence that the Government was constrained in the choices it could make. RTÉ management has submitted its proposals which we are in the process of evaluating. As has been widely reported, the proposals involve reducing costs by €60 million over three years, reducing staff costs and staff numbers by approximately 200 next year. Service changes include the closure of the current studio in Limerick, although Lyric FM and a mid-west news service will be maintained.

The board and management have acknowledged the need for RTÉ to transform itself and address the challenges it faces to bring financial stability and continue to fulfil its role in the long term. There is no doubt that it will be extremely difficult and that RTÉ will need to balance staffing and cost reductions with the need to satisfy the demands of audiences and operational requirements. The board engaged external assistance to consider the strategy and has also met the Broadcasting Authority of Ireland. NewERA was asked to consider the financial implications of the revised strategy and prepare a report, which has been received and is being assessed by the Department. The Minister, Deputy Bruton, met the chairperson and the director general earlier this year, as well as a delegation from the board in October to listen to its proposals. He will continue to engage with RTÉ on its proposals. Broadcasting legislation provides a role for the Minister where there is a variation in channels or new channels are being introduced, but, ultimately, operational decisions are matters for the board and management of RTÉ. RTÉ is committed to discussing the impact of the changes with those directly affected via their unions. The organisation recognises, however, that it must be financially viable, while also developing a strategy that will reposition it to take up opportunities in a rapidly changing media world.

In budget 2019 the Minister secured an increase in overall public funding for broadcasting of €9.245 million, comprising the replacement of TG4's share of licence fee income of €4.245 million with Exchequer funding and a €5 million increase in the amount paid by the Department of Employment Affairs and Social Protection for television licences. RTÉ is receiving €8.6 million of the increased allocation in 2019. It builds on the increase in Exchequer funding for broadcasting in 2018, funded through a €1.64 million increase in the Department of Employment Affairs and Social Protection's contribution for free television licences. In total, RTÉ has received an increase of €10 million in Exchequer funding in the past two years. TG4 was allocated an additional €443,000 in Exchequer funding in 2019, in addition to the additional €2 million in current and capital funding it received in 2018, bringing the total increase since the start of the five year period to €2.443 million. It was also allocated a once-off capital grant of €985,000 in 2018 to cover its expenditure in Bliain na Gaeilge.

The Government is committed to supporting other broadcasters and independent producers. The Sound and Vision scheme which is financed by 7% of television licence fee receipts and administered by the Broadcasting Authority of Ireland assists in the funding of high quality programmes on Irish culture, heritage and experience, as well as programmes to improve adult literacy. It also funds the archiving scheme to preserve Ireland's broadcasting heritage and benefits the broadcasting sector as a whole by supporting independent production. In its latest funding awards made in March €5.738 million was awarded to 119 radio and television projects under the scheme. A sum of €5.1 million was awarded for 29 television projects, while 90 radio projects will receive €633,000. The Government recognises the profound challenges facing both commercial and public service broadcasters and is committed to charting a sustainable future for the sector as a whole.