Dáil Éireann Debate, Tuesday - 11 June 2013
55. Deputy Michael Moynihan asked the Minister for Communications, Energy and Natural Resources the actions he has planned to ensure that RTÉ has a sustainable future; the reforms he intends to bring to the current licence fee system; and if he will make a statement on the matter. [27900/13]
View answerRTE is an independent national public service broadcaster whose remit and obligations are set out in section 114 of the Broadcasting Act 2009. RTE has a direct obligation under section 105 of the Broadcasting Act 2009 to ensure that its revenue is, at the earliest possible date, at least sufficient to meet all sums properly chargeable to its current account and to make suitable provisions with respect to capital expenditure. I am satisfied that RTE management is fully cognisant of this obligation and is taking all the necessary steps to ensure that the company continues to be in compliance with the terms of the provision.
I have had cause to meet with senior management in RTE on several occasions during the last 18 months and I have made it clear that a continuing deficit position in the corporation is unacceptable. RTE is in agreement with this and has assured me that as a result of the restructuring programmes the organisation has undertaken and continues to undertake, a break-even position is targeted for the end of this year.
One of RTE's key challenges is managing its commercial revenue, which is declining as a result of increased levels of competition in a challenging and fragmented economic environment. RTE's commercial income totalled €156.3 million in 2012, compared to €167.3 million in 2011. This represents a decrease of 7%. The organisation's commercial income has fallen by 35% since 2008. In the first quarter of 2013, I understand that RTE's advertising revenues were weaker than expected for this year.
With regard to reform of the current licence fee system, the Deputy will be aware that the programme for Government commits to examining the role and collection of the TV licence fee in light of existing and projected technologies and to transforming the TV licence into a household-based public broadcasting charge to be applied to all eligible households and applicable businesses, regardless of the device used to access content or services. I recently received the completed report of the value-for-money review group on the proposal to introduce such a charge. The independently chaired review group, which was established under the auspices of my Department, examined a range of issues relating to the proposal, including the efficiency and effectiveness of the current licensing system. I am currently considering the contents of that report. I expect to be in a position, subject to Government approval, to initiate work in the autumn on the legislative and other work necessary to implement the household-based public broadcasting charge.
On the last point, the Minister stated that he had received the report and was considering it, and indicated that the work would commence in the autumn. Is he talking about the early autumn or about having something in place by the end of the year?
With regard to RTE's revenue, we recently received and examined the value-for-money report. The State broadcaster has an important role, and it is important that the public have faith and confidence in it. The Minister stated that commercial revenue is weak again this year because of the operating environment. I presume RTE has lowered the cost of advertising in accordance with demand. Independent broadcasters who talk to us at committee meetings or privately refer to the cost of producing current affairs programmes, documentaries and other programmes. The cost of production is cut to a minimum, whereas RTE seems to have many backup staff and considerable technical advice for all programmes.
Media outside RTE have always commented on the cost of stars to the State broadcaster. This issue has been debated in the broadcasting and print media for a long time. A fundamental issue arises in regard to RTE, as its production costs seem to be at variance with those in the private sector and with what is considered best value throughout the country.
The record will show that RTE has led the way among the State corporations in grappling with the implications of the economic downturn and attempting to provide feasible solutions. One should bear in mind the reduction in the number of staff, for example. Three hundred and fifty staff have left voluntarily, including 270 in 2012 alone. In the past four years, the headcount has been reduced by 493. This big drop, from 2,351 to 1,858, represents a reduction of 21%. Unfortunately, the fact of the matter relates to the collapse in commercial revenue. The collapse in advertising has been more dramatic than anybody had forecast. This is not significantly due to the recession but to advertisers' migrating to other platforms and companies, where they can tailor their advertising to particular segments of the market that they want to target. The fall in the licence fee is not very significant or serious but the fall in commercial revenue has been quite dramatic. The cost of operating activities has decreased by 24%, or €104 million, from €439 million in 2008 to €335 million at the end of 2012.
On the Deputy's central point, which concerns efficiency and value for money, there have been very serious cutbacks. We must, in the interest of fairness, have regard to quality also. The national broadcaster will not get away with quality lapses, and if they arise they will be quickly highlighted and scrutinised. We have to take that into account as well.
We expect the highest standards from the national broadcaster and have seen the disastrous consequences when it has not adhered to best practice. That is a debate which has taken place in committee rooms and elsewhere. As the Minister said about the licence fee, society is changing and RTE, for all its technical advice and backup systems which were seen as the leaders in technology, seems to be somewhat behind the curve. Advertisers have moved away from it. Huge changes will take place in broadcasting in the next five to ten years. We often hear commentators in RTE talking about fat in the system in other businesses or State bodies. Are the Minister and the Department completely satisfied that every efficiency has been achieved in RTE, in terms of backroom staff, producers, researchers and so forth working on particular programmes? After his discussions with RTE and given the changing face of broadcasting, is the Minister satisfied that it is up to speed in what will be a completely changed system in the next five to ten years?
It must be very disappointing for senior management in RTE that, having engaged in the serious restructuring it has carried out in the last couple of years and having had pay reductions and redundancies before similar companies, first quarter revenue income from commercial advertising has fallen. In the discussions I have had with the director general and the chairman of the board I have emphasised that the break-even objective for the end of this year has to be met, and the board accepts this. Unfortunately, this may mean management will look for more efficiencies. It is important to acknowledge the progress that has been made, at a cost of some hardship for persons who have left employment prematurely and those who have had changes in income and so on. However, the board and the director general are aware that they have to effect efficiencies wherever they can. It is also important to point out that they have used online services in coping with the changes in technology to which the Deputy pointed and have been doing so from the beginning. They are focused on the digital future of the company. My answer to the Deputy's question on whether there is an awareness and appreciation of the fact that they have to continue to make savings and achieve efficiencies where they can is yes. However, we come back to the net point that it is the diminishing commercial revenue that is causing the problem for the company.
