I thank the Chairman and all the members for inviting us here today. The invitation comes at a very important time. We sent the committee some notes last night which I hope the members will find useful to engage today.
The questions the members have regarding employment in RTÉ are important. Over the past few years, we in RTÉ have reviewed, and changed as appropriate, the basis of engagement for a number of people whose working relationship with RTÉ had evolved over time. The Eversheds Sutherland review has been thorough and I and my colleagues are happy to answer questions on that across the next couple of hours.
At the outset, however, I thought it would be useful to give the committee some context of what is going on in our sector and within RTÉ at present. While terms and conditions of employment in RTÉ and the sector are certainly important, the broader challenges facing the sector have caused many to lose their jobs and are threatening the future of many more.
Decisions soon to be made by the Government on the future of media in Ireland will have far-reaching consequences not just for RTÉ and all who work here but the broader sector and, crucially, Irish audiences into the future. Much is at stake.
Public service media now exists in a very different world from when RTÉ was established. Audiences in Ireland now live in a transformed media and communications landscape. With unlimited choice and every interest and taste catered for, audiences enjoy a digital world - always on, accessible across multiple devices and, increasingly, delivered or mediated by global companies. Audiences today exercise much more control over when and how they consume information, journalism and programming.
RTÉ has evolved with these developments and still occupies a unique place at the heart of Irish public life. Over the past 15 years RTÉ has embraced the opportunities of digital technology. Today, while continuing to deliver the country’s leading broadcast channels, RTÉ has extended its public value with market-leading online and mobile media services, offering all of its journalism and programming on the smartphone, tablet and desktop.
These investments have ensured that RTÉ remains at the centre of Irish public life, accessed in any given week by 94% of the people living in Ireland, and many more around the world. This has never been more important than in the past year when RTÉ underpinned a shared national narrative and was a consistent and trusted source of information, analysis and news that people could rely on every day to keep themselves, their families and their communities safer. As independently tracked by Amárach every week, 90% of the Irish people are choosing RTÉ as their main source of information, news and analysis on Covid-19.
Over the next decade, as broadband speeds increase and coverage extends fully into rural areas and as digital devices become smarter and global competition becomes even greater, the effects of digital disruption on media are likely to become even more fast-moving and profound, particularly for a small country such as Ireland.
The members will see from our annual report in 2019 that RTÉ carried a deficit for the year of €7.2 million, a deficit that underscores a structural funding problem at RTÉ that has emerged in the past decade.
The financial crash of 2008-09 devastated the economy and many sectors, including media. In 2008, RTÉ had total revenues of €444 million; in 2019, RTÉ’s total revenues were €342 million.
The result has been a significant contraction in investment in Irish broadcast journalism and programming over the past decade. Investment by RTÉ in the independent production sector has reduced from over €75 million per annum in 2008 to €40 million now. RTÉ's investment in drama and children's programming has more than halved and its investment in factual programming has reduced by a third. This is not good for RTÉ, audiences in Ireland or the Irish creative media sectors.
Reform and cost-cutting has been a necessary theme in RTÉ throughout this period. RTÉ has reduced its annual operating costs by over 20%, approximately €100 million, in line with a total fall in income of the same level. Staff numbers have reduced by 22% from 2,351 in 2008 to 1,831 by the end of 2019. That is a reduction of 520 people. RTÉ has also reduced its remuneration of top talent by over 30% on the 2008 levels.
Due to ongoing financial constraints over the past decade, RTÉ has only been able to invest half of what we should in capital. In 2017, underutilised land in Donnybrook was sold to raise funds for essential capital investment in digital technology, studio infrastructure and to reduce debt and fund restructuring. In late 2019, RTÉ committed to further reducing its operating costs by €60 million between 2020 and 2022. RTÉ is on track to deliver these reductions, which include a further reduction of 15% of our top talent fees and a 10% cut to the pay of the executive board, as well as a waiving of fees by the RTÉ board. However, cuts and asset disposals cannot sustain RTÉ, let alone allow RTÉ to invest to meet the needs of future generations. Just when RTÉ’s income has sharply contracted, changing audience needs and increasing global competition demands that RTÉ increase its investment in its journalism, programming and key technology so that we can retain distinctiveness and connection with our audiences. Quite simply, RTÉ does not have adequate revenues to deliver against our remit or fulfil our prescribed role. Numerous independent reviews, including the review of the funding of public service broadcasting conducted by the joint Oireachtas committee in 2017, have identified the need for increased public funding for RTÉ and structural reform to the TV licence system.
As noted above, 94% of Irish people access one or more of RTÉ's services each week using multiple devices, yet the law still only stipulates ownership of a television as the basis for paying the TV licence. In 2019, 11% of households therefore were ineligible to pay the TV licence. The cost of collection is higher in Ireland than the European average, more than double that in the UK, and evasion levels in 2019 were also among the highest in Europe, at 12.6% of eligible households. Both the levels of evasion and the numbers of ineligible homes have significantly increased since 2019. By our estimates the evasion level rose to over 15% of homes in 2020, with the level of ineligible homes rising to 13%. As a consequence, every year the current TV licence system is now losing over €50 million. To put that in context, that is the equivalent to the annual cost of all programming on RTÉ’s radio stations and orchestra. It is more than RTÉ spends annually on news and current affairs programming on RTÉ 1 and RTÉ Radio 1. It is more than double what RTÉ currently spends on TV drama. It is more than three times the current Broadcasting Association of Ireland, BAI, sound and vision scheme, which supports independent producers. That is the amount being lost every year. The system is also unfair on those who pay. It should be a universal fee to which all households contribute and benefit, but over a quarter of households now do not pay at all. The TV licence fee system is now by some distance the most unreformed part of the public media in Ireland. Fixing this is the responsibility of Government. Persistent failures to do so have already cost jobs, both within RTÉ and the broader audiovisual sector, and hundreds of hours of journalism, creative and cultural programming.
Key decisions are now essential to secure the future of public service media in Ireland and those who work in it. Inaction will mean a decline in RTÉ’s relevance, financial sustainability and the level of services it can provide. Those who gain from this decline will not be Irish-owned media organisations but, in the main, large international media providers who invest little or nothing in Irish-focused programming or journalism or create or sustain jobs here.
Much is at risk beyond RTÉ’s own future, from Irish investigative broadcast journalism, comprehensive election and political coverage, international broadcast news coverage, to in-depth coverage of Northern Ireland and national regional coverage, a vibrant Irish TV drama sector, a viable independent production sector, distinctively Irish children’s programming, cultural and arts programming, significant investment in Irish sport and Irish-language news, current affairs and radio services. None of these services or activities is sustainable on any scale in this country without a strong and viable RTÉ. I thank the Chair. We look forward to the discussion.