Joint Committee on Communications, Climate Action and Environment díospóireacht -
Tuesday, 22 Nov 2016

Public Service Broadcasting: Discussion (Resumed)

I wish to advise the witnesses also that any submission or opening statement they have submitted to the committee may be published on the committee website after the meeting. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him, her or it identifiable.

The committee decided to prioritise public service broadcasting as part of its work programme for 2016. The committee decided to review the current funding model for public service broadcasting, the effect of advertising opt-out on broadcasters and to consider other related broadcasting matters. The committee may also examine media ownership in Ireland. The committee is aware of the difficulties with the current television licensing system, and of the rapid changes in technology with a reduction in funding through commercial revenues available to all broadcasters. Although this is the second meeting at which the committee will consider public service broadcasting, we have engaged with the Minister during previous meetings on its funding. The opening statements have been circulated and I propose that the three main witnesses will contribute for five minutes each, followed by a question and answer session where each member may ask questions for a period not exceeding three minutes. Is that agreed? Agreed.

We will have two sessions. Session B will take place at 6 p.m. approximately when we will meet representatives of RTE, TG4 and the Irish Film Board. Is that agreed? Agreed.

I welcome Professor Kevin Rafter, School of Communications, Dublin City University, DCU; Mr. John Purcell, chairman, Independent Broadcasters of Ireland, IBI, and chief executive officer of KCLR 96 FM; Mr. Tim Collins, director, IBI, and chief executive officer of Newstalk FM; and Ms Lisa Ní Choisdealbha, executive director, IBI; and Mr. Larry Bass, Screen Producers Ireland board member and ShinAwiL Productions and Ms Jennifer Kenneally, policy and communications manager.

I invite Professor Rafter to make his opening statement.

Professor Kevin Rafter

I am grateful for the invitation to contribute. I welcome the committee's decision to prioritise public service broadcasting as part of its work programme and also the positive engagement of the Minister with the topic.

By way of background, I am currently Professor of political communication at DCU. I was previously head of the department of film and media at IADT, Dún Laoghaire. I have been associate dean for research and chairperson of the MA programme in political communication at DCU. My statement draws on some of the research I have undertaken in DCU. Several members of the committee will recall that prior to 2008, I worked in the media as a political journalist based in Leinster House with a number of newspapers and also with RTE. I also produced a number of radio documentaries for Newstalk. I am, therefore, alongside my academic work, drawing on this substantial professional media experience in my contribution to the committee's deliberations. The statement is based on a longer submission made to the committee in the past few days.

All broadcasters, irrespective of ownership type, face funding challenges. Recent changes in communication technologies and public consumption of media have had a dramatic impact on the media sector. Global media has become local and the related impact on audience, advertising and content has been significant. In October 2011, the then director-general of RTE, Mr. Noel Curran, delivered a speech in DCU where he recounted how it was possible to go through a normal day consuming a great deal of media beginning with "Ireland AM" on TV3 and continuing with independent radio, Sky News, using Google, tweeting, posting on Facebook, watching the BBC and listening to Today FM. As he said at the time, this type of media consumption was, "an Irish audience in a single day, any day, of any month, of any year [...] an average day of viewing, listening and web browsing — where you don’t use any of RTÉS services". It is now possible to go through an average day of viewing, listening and web browsing without using services of an Irish broadcaster, be they publicly or privately owned. That is evidence of the scale of the global transformation in media in recent years and the challenges faced by Irish broadcasters.

RTE has a special place in the Irish broadcast landscape. Given its Irish language remit, TG4 fills a unique space, but when we talk about public service broadcasting, we can no longer confine the discussion to RTE and TG4. If the committee took that on board, it would be a major advance. A considerable volume of research has focused on the difference in programming between public broadcasters and their privately-owned counterparts. We have done research on that in DCU, which challenges the idea that RTE provides the only substantial news content in the country given that private broadcasters also produce public service content. In a democracy, it is important to have multiple sources of news and current affairs and ensuring all sources are financially viable is hugely important. We need to recognise the changed landscape in which broadcasters exist. It is important to support RTE and TG4 and that is a viewpoint I hold strongly. Private broadcasters, particularly those producing news and current affairs content, need public policy support. We, in DCU, produced major research last July, which examined Irish journalism, and the findings were bleak. The profile of journalists has become younger, mid-career journalists have exited the profession, the pressure to sensationalise news has increased and research times on stories has decreased. If we believe that when journalism fails, democracy suffers, it is important that all journalism is respected.

Under the Sound and Vision Fund, 7% of the licence fee is available to produce programming on private and publicly-owned stations. While this has been important, news and current affairs programming is excluded. This exclusion means that the 20% news and current affairs statutory requirement on privately-owned stations, which is public service content, receives no licence fee support. That is deserving of consideration by the committee. It is a shame that the broadcast charge has gone off the agenda. Nevertheless, in the short term, the committee and the Minister can make huge advances by looking at evasion. The evasion rate is approximately 15% whereas it is 5.5% in the UK. Database access to digital television services is hugely important. That legislation has been long promised and it should be acted on. A commercial licence fee alongside a residential licence fee is worthy of consideration and I refer to that in the submission.

RTE also has to take responsibility for its own finances. It is curious to say the least that it reported that it had its finances in order but that by the end of 2016 they have deteriorated to such an extent, notwithstanding well-flagged events this year. While the new DG bears no responsibility, the mess that is now again RTE's finances is hers to clean up. RTE needs to cut its cloth to the resources available. The committee should pay attention to the singular asset available to RTE to make a dramatic impact on its finances. Just as the arrival of television in the 1960s meant a departure from the GPO in Henry Street, serious consideration should be given to RTE exiting its current campus in Donnybrook. This was referenced in the NewERA report in 2014. Much of the site is not used for broadcasting purposes with 21% used for car parking and 20% underdeveloped. There is a resource available to RTE to deal with its own capital investment needs alongside having the ability to put aside a significant sum for programme commissioning.

These issues are dealt with in greater depth in the submission and the background research we have produced in DCU is also available to members. Private broadcasters are sometimes referenced as the "competing commercial sector". This limits their value and fails to acknowledge that RTE is a ruthless commercial entity, especially in how it chases ratings and advertising. The Broadcasting Act 2009 needs to be amended to recognise that public service broadcasting is no longer the preserve of RTE and TG4. Dealing with evasion and introducing a commercial television licence fee would be positive advances. RTE should be encouraged to look at its own campus as an asset in addressing its own funding needs. If a percentage of licence fee revenue is made available to privately owned stations to support, in particular, their news and current affairs programming, it is vital that updated broadcasting legislation is more explicit in requiring increased public service obligations from them.

I would say the same about RTE. The committee has many items on its agenda, but if it can broaden the discussion on what we refer to as public service broadcasting, it would be a significant advance. I thank members of the committee for the invitation to speak here this afternoon. I am available to take any questions.

Mr. John Purcell

Professor Rafter has considerably shortened many of my remarks because I was going to perhaps labour the fact that we are public service broadcasters as well. That is a very important point and a shift in the debate in that regard is important. Much of the debate tends to be RTE-centric and we need to move beyond that because our members who represent the 34 independent stations have 66% of prime-time listenership in the country.

We welcome this debate at a crucial stage in Irish broadcasting. We are approaching, if not on the precipice of, a tipping point. We are frustrated. Politicians have for years recognised the value of what we do but action has been scarce. In the midst of a communications revolution we are mystified that there has been no action on broadcasting legislation, which is urgently required. I am sure my colleagues in RTE would share the view that this debate is timely and there is an urgency about it.

There has been much discussion about what public service broadcasting is. It should not be defined in terms of ownership structures, rather in terms of content. The value to a democracy of public service broadcasting has been further emphasised by events in recent weeks and months. Professor Rafter referred to journalism. The importance of public service-type journalism is that it reflects the communities to which it broadcasts; is reliable, balanced and fair; and sees the broadcaster as a responsible member of the community rooted in the long-term interests of the community to which it broadcasts rather than simply accumulating clicks on a website and generating revenue. These are characteristics beyond the "inform and educate" mantra that we have heard for years.

Regarding our obligations as public service broadcasters, much has been made in the debate over the years of RTE's statutory obligations. However, independent broadcasters have detailed legislative obligations under the 2009 Act and also laid down in our broadcasting contracts. The reality around the country is reflected in last Friday's broadcast schedule for Clare FM. The print on the slide I am showing may be a bit small. There was an outside broadcast from Ballyea; traditional music; coverage of local sport; and local discussion. This is not competing with RTE or other broadcasters, but it is providing unique broadcasting to the area, which, if Clare FM were no longer in a position to provide it, would not be provided by anybody else.

The success of Irish independent radio and RTE is reflected in the JNLR results showing that 82% of the Irish population listen to radio on a daily basis. In almost every county, the market leader is the local independent radio station. We have compared those figures with RTE Radio 1 on a county-by-county basis. For example, the share of the market in Waterford enjoyed by the local radio station is 38.8% compared with 18.4% for RTE Radio 1. On this day, as we address the committee, one of the true stars of Irish radio, Billy McCarthy, was laid to rest. The reaction in Waterford to his passing reflected the importance in which the radio station was held. Virtually the entire community came to a standstill to honour the voice of Waterford, as he was known.

Every three months when the broadcast listenership figures are released, we hear about the top ten most listened to radio programmes in the country being largely RTE programmes. However, in Carlow and Kilkenny, for example, during peak listening time between 10 a.m. and noon, "KCLR Live", which is our talk programme, has an audience of approximately 15,000, while its competitor on RTE Radio 1 has in the region of 5,000. We believe that is because we supply content that is relevant to people; reflects their lives; covers the issues that concern them; responds to the issues they want to talk about; involves them; and gives them the opportunity to express themselves.

On a national basis, my next slide compares the morning broadcasts of RTE Radio 1 and Newstalk. It is untenable to argue that one is public service and one is not. The debate needs to reflect the reality that public service broadcasting goes across the spectrum.

We face many threats to the market. The fallout could be an erosion of Irish culture and identity. Professor Rafter referred to Noel Curran's remarks on how it is possible to spend an entire day without any Irish media input if one so wished. It is essential to have a diverse, sustainable and viable Irish-based broadcasting sector with a strong RTE, and a viable and strong independent sector as well. At the core of this is the funding model.

The recent BAI strategy statement placed sectoral sustainability at the core of what it wants to do. If this means changing the legislation to increase our advertising time allowance to 12 minutes per hour rather than ten minutes per hour as it currently is, it will not work. The threats are very real. The independent radio station, TXFM, recently closed. We need fundamental shifts in understanding and action. We have been critical of inaction. Based on our interaction with the Department we feel that its orientation continually focuses on the survival of RTE. We need survival of the cross-sectoral radio industry.

We need to recognise the challenges and recognise that the solutions must be on a win-win basis for independent broadcasters and RTE. Equally, where resources are at stake and funding is to be provided, accountability, transparency, value for money and clear commitments are essential. That model has already been shown in the "sound and vision" scheme. As Professor Rafter pointed out, there are limitations to that scheme, but it clearly shows how public money can be entrusted to private operators to provide public service broadcasting.

We have designed a model to fund public service broadcasting on independent stations. We can provide a copy to members of the committee if they wish. Taking all the arguments on board, we have related the public money specifically to the 20% news, current affairs and talk content that broadcasters are required to provide under current legislation and our contracts. Ultimately, this will come from the licence fee. We believe the collection of the licence represents the potential for approximately €30 million to €50 million in additional revenue. Given that our members represent approximately 66% of the Irish radio industry, we believe a fund such as the one we have outlined needs to be adopted and we urge the committee to examine it.

Failure to act presents an appalling vista where there will be an erosion of use, influence, depth and quality of locally based media across radio and television that will lead to the lowest common denominator and the constant search for clicks and quick revenue.

We have been frustrated. There is a funding crisis. We believe that this will generate an editorial crisis, which will have deep negative impacts for Irish society. We do not want to see the degradation of our sector and we are willing to be very constructive. We have presented this scheme. We have presented research over the years. We are willing to be a very constructive partner but I would like to stress the urgency of the situation. We look forward to working with the committee members. We will be happy to take some questions.

Chairman

I thank Mr. Purcell. Our third witness is from Screen Producers Ireland. I invite Ms Jennifer Kenneally to make her contribution.

Ms Jennifer Kenneally

Thank you, Chairman and thank you for the opportunity to address the committee. I am joined by Screen Producers Ireland board member, Larry Bass. Larry is CEO and founder of ShinAwiL productions, one of the largest independent production companies in Ireland. We are delighted to be here this evening on behalf of Screen Producers Ireland to discuss funding for public service broadcasters, PSBs, and the nature of the relationship between independent producers and PSBs.

Screen Producers Ireland is the national representative organisation of independent film, television and animation production companies. We promote the growth and sustainability of a working environment conducive to a strong independent production sector for our 130 members and for the industry as a whole. Screen Producers Ireland members produce programmes such as "Vikings", "Room to Improve", "Red Rock", "Ros na Rún", "Ear to the Ground", "Dragons Den" and "What are you Eating?". They have produced Oscar nominated films such as "Brooklyn" and "Room" and are also responsible for GAA and rugby coverage on TG4.

It is imperative that policy makers understand the importance of public service broadcasters to the independent production sector. PSBs nurture growth within the sector and give our creative talent a platform to present their work. Security of funding allows RTE to commission independent productions. That, combined with Irish Film Board and BAI funding, ensures an active independent production sector which allows Irish producers to gain experience and skills. RTE and TG4 act as incubators for Irish production talent. TG4's operation as a publisher and broadcaster is particularly beneficial to regional independent producers.

The audiovisual sector is currently experiencing many disruptive challenges in the form of new technologies and changes in consumption patterns. Viewing patterns are increasingly favouring on-demand content via Internet streaming over traditional cable viewing. Ireland’s public service broadcasters need to be adequately resourced to adapt to this new environment. We are aware that the Minister, Deputy Naughten, has stated that he will not be pursuing the introduction of a household media charge. We believe that this is a misguided and short-sighted choice and urge the committee to recommend that the Minister reverse the decision. The current TV licence fee is no longer fìt-for-purpose. Consumers are moving from traditional television viewing to streaming content from digital platforms. In 2009, 2.5% of Irish households did not own a TV. That figure increased to 8% by 2015. Additionally, Ireland has one of the highest TV licence fee evasion rates in western Europe. It is currently estimated to be 13.7%, amounting to €40 million in lost revenue per annum. The Minister is seeking to address evasion but we are concerned that, even if evasion rates decline, the growing number of households opting to not own a TV will off-set any gains made. In the five years between 2009 and 2014, the number of TV-free households grew by 5.5%. If the trend continues the number of households who legitimately do not require a TV licence will almost equal the current evasion level by 2019.

The introduction of a household media charge is the ideal solution to the problem. However, an alternative would be to amend Statutory Instrument 319 of the Broadcasting Act to expand the definition of a television set to include new screen technologies. Screen Producers Ireland also believes we should move towards the European norm where PSBs are funded principally from licence fee or media charge revenue with little or no reliance on advertising and commercial revenues. The current dual funding model leaves Ireland’s PSBs open to significant fluctuations in their annual budget, creating uncertainty in the sector.

If our recommendations are to be implemented, and a household media charge and elimination of reliance on commercial income are introduced, then efficiencies and value for money must be a condition of the changes. For that reason, we believe RTE should move towards the emerging trend of the publisher-broadcaster model. That would be a better use of funding and would result in a greater volume of quality, original Irish programming.

In conclusion, the continued success of the Irish independent production sector is very reliant on a strong public broadcasting service. Protecting PSBs is critical for preserving democracy, social cohesion and for providing a trustworthy platform for public debates and national conversations. Their funding base must be protected and increased and that increase would have a positive knock-on effect on the indigenous production sector.

Chairman

I thank Ms Kenneally. I also thank all the witnesses for their opening statements. Before I go to members I have a number of questions. The first is for Professor Rafter. I wish to concentrate on his reference to the ability to go through an entire day browsing the web or watching television without using any of the Irish broadcaster services. That is globalisation at its most obvious. Could he outline the challenges that poses and explain whether they are all financial in terms of advertising? Could he also expand on the print media and the possibility of affording some State funding to newspapers, which also provide a public service, and they now broadcast through the web by means of podcasting and website videos. Advertising revenue is now moving to digital media at a very fast pace, which is causing huge problems for newspapers.

I note that the Independent Broadcasters of Ireland, IBI, defined public service broadcasting in its presentation. What programming can the market not support in terms of public service broadcasting? Is there an accepted list or are there particular types of programming that cannot be supported? Given the fact that advertising revenue is decreasing and moving to digital, am I correct in understanding that the IBI is essentially asking for more State funding?

Professor Kevin Rafter

Thank you, Chairman. In response to the question on the availability of public moneys for print media, and privately owned print media, there is an important distinction between broadcast and print and the statutory obligations on RTE, TG4 and the private broadcasters in terms of fairness, balance and impartiality. Newspapers, as private entities, can adopt an editorial line as they so wish. In terms of that distinction the defining line for me is why public money, through the licence fee, would not be available to the broad newspaper and print sector. The argument I would make and that I put forward in the submission to the committee on expanding the availability of public money into news and current affairs coverage of private broadcasters is because of the importance of having a viable sustainable alternative to RTE. The legislative underpinning of their output and the requirements through the Broadcasting Act 2009 and the regulatory guidelines that the BAI publishes put the broadcasters in a different place.

On the challenges in the sector, I will go back to my opening comment that all broadcasters in Ireland, irrespective of their ownership type, face funding challenges. The closure of a significant player such as Newstalk would have a huge impact on democratic discourse in this country. Likewise, we heard reference to Clare FM, or indeed any of the stations in the local areas of members. They know the value of the local stations and what would be the effect of their closure. In this debate we must be conscious that when we talk about public service broadcasting, public service media and public service content, it is no longer about RTE and TG4. There are other players in this market and they have a value in terms of their public remit.

The audience needs to have local choice as well as global media such as Sky and Google and tweeting and Facebooking, as I referred to in my submission, but it also important that there is a sustainable and viable financial model in place. If the conversation about public service broadcasting focuses exclusively on RTE and TG4 we are neglecting a huge amount of content and there is a responsibility on those who are looking at the 2009 Act, which is really not fit-for-purpose any more and does need to be revised. There needs to be a broader definition of public service broadcasting. The BAI in its annual and five-year reviews of public service broadcasting must cast its own net wider than RTE and TG4 in looking at content and put it up to private broadcasters in the independent commercial sector. There need to be very defined criteria and obligations on them if they are to receive increased licence fee money for news and current affairs output.

Chairman

Perhaps someone from the Independent Broadcasters of Ireland would like to respond.

Mr. John Purcell

In regard to the type of programming, if one looks at the staffing of a radio station the most concentration of staff is in the area of news, current affairs and sports coverage among other areas.

If I look at my own radio station, I have about eight full-time employees between news programme presenters, producers and sport. That is the most expensive part of the schedule to maintain. It is also the most public service part of the schedule. If you look across the water to the UK, a commercial radio station serving what we would consider to be a large urban area like Sheffield or Southampton may not have more than three or four staff, which would consist of somebody on sales and somebody managing syndicated content. If the failure of the market and the failure of us to sustain news, current affairs and sports coverage happens because we can no longer afford it, it would mean that we would be looking towards syndicated models of programming. What is at risk is the unique local flavour offered by stations like Clare FM, KCLR, Highland Radio or Midlands 103, which have fully developed and staffed broadcasting outlets in their local areas that reflect those areas. I could run a music radio station with half the staff I have. The half I would lose would consist of news, current affairs and sports, which is the rich content that provides the local identity and the public service content.

Mr. Tim Collins

The Chairman asked about print. One of the contrasts between print and us is that most print media are paid for. In contrast, radio as a medium is quite robust so audience levels have been largely unchanged for the past ten years. Almost 90% of people tune into radio every day so it is a very strong and intensely local and personal medium. The fundamental change that has taken place in the radio market is not an audience problem but a funding problem. The funding problem is down to structural changes that have taken place in the market. They are not temporary changes because advertising is a bit rocky this year. They are structural changes that have seen a drift in revenue to digital media. Digital has now overtaken television as a proportion of the revenue that is spent in the market. The largest media in the market by revenue, let alone audience, are Google and Facebook. Radio in 2016 will probably decline in revenue terms, whereas digital media like Google and Facebook will grow by double digit figures. They will represent well over 30% of the market by the end of the year. They are the challenges we face in funding news and current affairs programmes.

Mr. Larry Bass

We are talking about the funding of public service broadcasting, which is not just news and current affairs. If we want to recognise that we have a culture and a nation, we need to fund our language and culture, which is represented in all types of programming like entertainment and arts programming, documentaries, drama and film. All of it combines to give us a nation. We were exporting literature before we ever had a nation. If we are not going to invest in our future cultural exploits, we will not have a national culture to talk about. There is a crisis of funding but it stretches right across radio, television and film. Ireland has been well served by our cultural heritage but it will disappear if we cannot compete with the Googles, Facebooks and everything else that is encroaching and taking up space. The debate is about funding and somebody needs to take it seriously. It has not been taken seriously in these Houses for the best part of 20 or 30 years and we would like it to be taken seriously in the future.

Deputy Timmy Dooley

I welcome the witnesses and thank them for their detailed presentations. Obviously, what they have provided us with will be helpful for us in reaching a determination. We have a difficult job in that from the very start of his time in office, the Minister has indicated that he does not want to go down the broadcasting charge route. He ruled it out from the start notwithstanding the fact that our party offered it to the Irish people as part of our manifesto. It is something we believe in. It is a way of addressing the funding shortage and the very significant level of non-payment of the licence fee. While I welcome the initiative the Department is putting forward to try to get a better return, I remain to be convinced of the success of that.

In respect of public service broadcasting at this time, particularly in the context of what is now being referred to as the "post-truth" era, the provenance of content is hugely important with the advent of fake news, which is readily available on the various digital platforms. Professor Rafter rightly identified the issue concerning the ability to go through a day, a week or perhaps a month without ever having access to any Irish content and feeling one has been informed as to what is happening domestically and throughout the world. In that environment, the person could be largely dependent on Twitter or Facebook without having any access to knowledge about where it comes from, its probity or the extent of editorial management or control. That is scary in a democracy where we are moving away from those norms that are protected on a legislative basis and where people know the provenance of content. Much of the debate during previous committees and up to now has been a "them and us" debate - the independent or private commercial sectors versus RTE. We all have a responsibility now to get our act together and see the threat to democracy that is afforded to certain vested interests if they wish to use digital media and platforms to convey values that do not concur with what most right-thinking people believe.

The preservation and protection of public service broadcasting is really important - certainly to me and, I would imagine, to most people in this House. It is about how we can get together and ensure that, collectively, we have a balanced approach to it. For a long time, I have believed that includes the commercial private sector. I often think the word "independent" is somewhat misleading. I assume it only comes from the fact that these outlets are independent of RTE. We need to get over this "us and them" mentality and call it what it is. Of course, there are issues and concerns to be addressed about the commercial sector when you hear of large sums of money being paid for a television station and somebody buying two television stations. It should not be beyond us to address that on a legislative basis without ending up in a situation where we have another Fox News-style channel. An appropriate legislative base under the guidance of BAI could manage that scenario.

It then comes down to money, which is where the questions will come from. I have listened to what Mr. Purcell has said and I certainly think there is a basis for a very solid proposal there that can be worked on. It is about where the money comes from. It cannot be at the expense of RTE. I had a chance to peruse what RTE will say later. It does not have a lot of spare cash and certainly cannot afford to see a reduction in what it gets from the licence fee. Could the witnesses guide us on where that additional-----

Chairman

There are a few questions if the Deputy could-----

Deputy Timmy Dooley

-----money might come from? Do they see it coming from within the enhanced approach to the collection of the licence fee? Alternatively, are they telling us that we should forget about the position they have adopted to date and that we need to look at the broadcasting charge? Are they pushing that charge in a very strong way as the appropriate way to increase the pot to provide funds for all sides to address what I believe is a crisis in public service broadcasting?

Chairman

Could the Deputy bank that question and I will ask whoever wants to come to answer it in a moment? I call on Senator Leyden. Could he try to keep it to one question as I am conscious of time?

Senator Terry Leyden

I will not be long because Deputy Dooley has outlined the situation very comprehensively. I welcome the witnesses and thank them for coming in. They are a very talented group of people who have made a great contribution to Irish life and broadcasting. At the end of the day, money is one of the biggest difficulties here. What Ms Kenneally said about the drop in the actual number of people paying the licence fee is correct. It is not only a question of non-collection, which is also a problem. An Post administers collection for RTE. The point is that people will not accept a new tax such as a charge on computers.

There is an in-between situation, whereby one can extend the Title and amend the legislation to provide for an alternative.

If one is watching television on a computer, then one should pay the licence fee. I do not know whether that requires a complete change. Politically, at this point in time, given that the Government is in such a dicey position, it is not inclined to introduce any new charges. It requires a strong Government to introduce charges and redistribute them to local broadcasters. Shannonside is my local radio station. We almost expect it to provide coverage of proceedings in Leinster House. It provides more coverage than "Oireachtas Report". I would suggest that "Oireachtas Report" does not understand what the Oireachtas means; that is, two Houses, the Seanad and the Dáil, which are entitled to equal coverage. Committees should also be covered.

Provision for a contribution has been discussed for a very long time, but that will not work unless we can control and work out a system of collecting funding for people who are availing of content. I understand 5% fewer people now have televisions than in previous years, but they are receiving content on their computers. It is clear to me that they should make an equal contribution to broadcasting, whether public or otherwise.

We have discussed this issue for years, but I ask that a contribution be provided to local radio for the purposes of coverage of news, current affairs and sport. That is very important. It is obvious that some property in Montrose will have to be sold. Even selling that will only be a once-off operation; it will not provide an annual return.

Deputy Brian Stanley

I welcome the presentation from the panel. The ability of the Government to introduce a broadcasting fee has been covered. Another factor must be considered, namely, that many low and middle-income households already face a significant burden in terms of increased charges, including insurance costs and so on. The working poor would find it difficult to carry an increase in the licence fee, never mind whether it would be justified.

I am interested in hearing the views of the panel on what means and method of collecting the just under €40 million that is lost through evasion of the licence fee should be used. The money collected from the licence fee should go to commercial broadcasters.

I want the panel to address the question of content and the level and quality of coverage. There may be an accepted view that public sector broadcasters such as RTE have better and more balanced coverage than commercial operators. That is not my experience. A study of the 2016 election coverage was carried out by Mr. Padraig O'Mara. I would be interested in hearing the views of the panel on his findings.

There has been a deafening silence about the report. I have not heard it being challenged, supported or anything else. I am not in a position to question how accurate the study is; I have not had time to carry out an in-depth analysis of media coverage, but the report is available and I have not heard anybody shouting him down or saying that what he has found is rubbish. In the case of RTE, the study found the overall coverage that the party I represent, Sinn Féin, received was about two-thirds of what the Labour Party received and less than half of what Fine Gael received. The Labour Party received more coverage than Fianna Fáil in terms of overall coverage. On a further analysis-----

Deputy Michael Lowry

That-----

Chairman

Allow Deputy Stanley to finish.

Deputy Brian Stanley

In the breakdown the quality of the coverage in terms of negative, neutral and positive, the slice of positive coverage is shown in green on the chart. The figures relating to Sinn Féin are about the thickness of the blade of a knife. One can see that the level of negative coverage is significant. I am not picking on the Labour Party in particular, but the report covers the four major parties and until the election the Labour Party was still one of them. That has changed. The report shows that the level of positive coverage the Labour Party received was almost 80%, whereas almost 80% of the coverage Sinn Féin received was negative. I would like to hear the views of the panel on that.

Sinn Féin supporters pay the licence fee. We would argue that we are entitled to the same coverage. Of course, people, no matter what party they support, are entitled to hear the same level of coverage for the various parties. What is also important is the level of positive and negative coverage, which should be balanced. My experience has been that independent or commercial broadcasting is more balanced.

Chairman

I will bring in the panel to deal with a number of issues. The broadcasting charge was raised by two members. There were questions on licence fee evasion and content coverage and quality.

Mr. Larry Bass

I am delighted that Deputy Stanley is keenly interested in the quality of debate and the percentage of time given to individual parties. It is simple. If there is no funding for public service broadcasting, there will not be a debate and the body politic and Ireland will not be well served. If there is any particular issue, the Deputy can make a submission to the BAI, on whose board I sat, about fairness because that is part of the Act to which all broadcasters have to adhere. There has been a very fair debate.

Ireland is one of very few countries in the world where prime-time current affairs television coverage of politics is still broadcast during prime-time hours five, six and seven days a week. That is what serves the House and the future of Irish democracy very well. We will not have that and it will be of little value if nobody is watching and we do not have other quality programming around that coverage.

Another issue I would like to put into the mix is that some homes in Ireland struggle to pay for television licences, but many pay for cable or satellite television packages, some of which cost in excess of €100 per month. The House could consider raising taxes through the application of VAT to a fund. All of the money paid for cable and satellite television leaves Ireland and does not go into Irish content or stories for children in Ireland. It certainly does not go into Irish radio, news and current affairs coverage.

It is in the gift of the House to examine how taxes are charged on fees paid in all homes. People pay such broadcasting charges voluntarily. They are not taxes, rather people volunteer to subscribe to television services, all of which involve money going out of the country.

Mr. John Purcell

What is often overlooked in the debate on the TV licence broadcasting charge is that, regardless of whether one calls it a TV licence or a broadcasting charge, adherence levels are currently in the region of 80% to 85%. Changing the name of the charge is not a substantive issue.

On Deputy Dooley's point about a them-and-us approach with regard to RTE, we entirely agree. We believe that more unites rather than separates us. In our discussions over the years with RTE we have found a lot of common ground in terms of its accepting our bona fides and vice versa - we recognise it has faced many legitimate issues and needs support.

On the question of whether money for the independent sector would come at the expense of RTE, I will hand over to my colleague.

Mr. Tim Collins

There is probably unanimity between ourselves and RTE. Between eliminating evasion and avoidance and reducing collection costs, which are very high compared to other countries, perhaps about €30 million or €50 million is at play in terms of increased revenue.

As John Purcell said, that would provide for improving RTE's funding position as well as a fund. The fund we have looked for is somewhere between €12 million and €15 million which would go towards funding the 20%% news and current affairs portion of independent broadcasters. That can be done without any increase in the licence fee to households. It can be done just by eliminating evasion and avoidance and increasing collection costs. That fund is very feasible. There is also an alternative which is to revisit the sound and vision scheme. Currently, only 5% of the sound and vision scheme goes to independent radio broadcasters. The scheme was originally set up to benefit our sector but 95% of it goes to either television or to RTE or TG4. That fund could also be changed. However, the most viable approach is to set up a new separate fund.

Professor Kevin Rafter

I agree entirely with Deputy Dooley in terms of terminology and the use of the words "independent" or "commercial". RTE is a commercial broadcaster although it gets half of its funding from the licence fee. Both the private and public sectors are independent. Talking about them as private and public is more clear cut. There is no doubt that the concept of a television licence fee has been undermined by changing consumption patterns driven by new viewing platforms and devices and it will have to be looked at. It does not have a long-term future, but it still has a short-term one. There is still in the region of €180 million coming in. The question is how one increases that pot for a win-win for both the public and private broadcasters. In the short term, there are actions that can be taken at departmental and governmental level to increase the total amount of revenue. An evasion level approaching 15% is unacceptable. There has been talk of dealing with this for many years and the simplest short-term method is to have access to the names and addresses of the subscribers to digital television services to increase the pot of money.

There is value in a commercial licence fee. Currently, we only have one type of licence fee which is payable and it covers all televisions in the same property. The Broadcasting Act 2009 provides for the introduction of regulations on different classes of licence for residential and commercial premises. The introduction of a commercial licence fee at a nominally increased sum above the current €160 level would be a positive move. Again, it would increase the pot of money. The idea is to increase the pot of money to ensure that RTE, TG4 and the private broadcasters have greater resources available to make public service content.

On the question of RTE's finances, it cannot continue on a path defined exclusively by continuously cutting costs and pleading for increased licence fee support. Something has to give in that space. It is sitting on a huge asset. The campus in Donnybrook needs to be looked at. RTE has serious capital investment needs and has within its own remit the ability to deal with some of its current funding issues.

On the question of balance in coverage, I can provide the committee with a number of studies we have done in DCU on political coverage. One in particular looks at the 2011 general election exclusively in terms of RTE and its allocation of broadcast time across the different political parties. This is a long-standing issue of tension between broadcasters and politicians. The study shows the positive endeavours the broadcaster made to ensure that there was balance across the different political parties proportionate to their support and sets out the matrix it used to allocate broadcast time during the general election. That was also replicated in the 2016 election. Those obligations for balance in coverage apply also to the private broadcasters.

Ms Jennifer Kenneally

Senator Leyden referred to improving the licence fee so that it would apply to people accessing television coverage on laptops and tablets. He wondered how this might be implemented. It would actually be quite easy. We would just have to amend SI 319/2009 made pursuant to the Broadcasting Act which is what currently exempts these screens.

Senator Trevor Ó Clochartaigh

I apologise for not being here for the whole presentation. It is an area in which I have a particular interest having worked in media for a number of years myself. Do the witnesses have any thoughts around regional film funds and their scope to create employment in the regions rather than to have everything so Dublin-centric? Obviously, we have a burgeoning film industry in the west which has been helped by the development of TG4 and other initiatives. Certainly, the regions need employment to be created in the regions as much as possible. A number of other countries in Europe have been very successful at developing film and broadcasting funds. Are there any thoughts around the regional film industry?

Deputy Eamon Ryan

I apologise for being late. I was attending the Chamber for another debate. Everyone in the Oireachtas agrees that we need to support content creation in RTE and the commercial, independent broadcasters. We value, as Mr. Larry Bass said, the fact that five nights a week we have proper debate from our broadcasters and we want to protect and advance that. I agree that it is not a question of RTE versus the other broadcasters or even print media as well. In our earlier meeting with the Broadcasting Authority of Ireland and the Department, some interesting figures were set out. I understand that approximately €330 million in advertising revenue is now going to the likes of Google and Facebook. Is Facebook a broadcaster in some way? What is its role in this whole story of how we support content creators? Similarly, as Professor Rafter said, there is a significant volume of money going to the cable companies or satellite broadcasters who can insert advertising without any regulation here. They are in this picture rather than it just being a fight internally among content producers in the Irish broadcasting industry.

I would be interested to hear reflections on a view set out at our previous meeting. While there are marginal changes we need to make on the level of evasion and in perhaps imposing a charge on some of the cable providers or other telecommunications companies to cover the cost, it may be time to look at a change in the system itself rather than to continue to tie up loose ends. I do not know exactly what mechanism would be involved and whether one would tie it to a property charge so that it was easier to collect or if it would be part of some other collection system. Do any of the witnesses have a perspective on a forum early in the new year to look at those options in an informal way? It would not just be here in the committee where it is hard to do it but would rather be a way to informally bring together different industry participants to look at options in that slightly more radical assessment of how we fund content providers rather than just seeing it as a marginal change to the current system. That is one of the processes the committee can initiate in conjunction with the Broadcasting Authority of Ireland and the Department. It is to think slightly outside the box.

Senator Michael McDowell

Mr. Larry Bass mentioned the question of VAT on subscriptions to, I presume, Sky and things like that.

Mr. Larry Bass

Sky, Virgin, etc.

Senator Michael McDowell

What is the rate at the moment?

Mr. Larry Bass

It is the normal 23%.

Senator Michael McDowell

Is Mr. Bass suggesting a higher rate or something like that?

Mr. Larry Bass

I am suggesting that it is within the power of the Department of Finance.

Senator Michael McDowell

I thought it probably was the 23% rate and I wondered if we could go much higher than that. On the general broadcasting charge issue to which Deputy Eamon Ryan was just referring, the figures Professor Rafter brought here today suggest the lost revenue is approximately €30 million on a 13% to 15% evasion rate. If that is brought down by two thirds to British levels, there is €20 million to be gained. That is a fairly limited amount of money, all things considered. Evasion does not seem to be the big issue unless someone has other concepts in mind. It strikes me that the cost of recovery is an issue. If one looks at that €180 million and divides it by the number of households or domestic units in Ireland, of which there are perhaps 2 million to 2.5 million, one is talking about €90 to €110 each.

In that context it might be more sensible to collect it as part of the local service or property charge and simply take it away rather than doing that.

When Mr. Purcell refers to a differential commercial rate, is he talking about anything different from pubs, restaurants and hotels? Will there be a charge per hotel room or per screen in a pub? I am fully conscious of the fact that publicans pay a lot of money to provide Sky or BT Sport. I do not feel too sorry for them but I would like some flesh put on those bones.

Chairman

I will bring the witnesses back in but I must ask them to keep their responses brief because we are under some time pressure from the next meeting. The questions concerned film and the regions, the role of content creators, the funding system, including a forum for looking at funding options that would come under this committee's remit, and the differential with regard to commercial rates.

Mr. John Purcell

Deputy Eamon Ryan asked about Facebook and the role of content creators, so I will make a quick comment in that regard. As far as I know, Facebook is the biggest distributor of news content in this country but it does not have a worldwide editor, let alone one in Ireland. Issues such as the quality and cultural impact of news, programming, content and discourse merit much debate.

Chairman

Does Professor Rafter wish to comment on the commercial charge?

Professor Kevin Rafter

Yes, I have a number of points. As regards the type of licence fee, we are talking about the collection method and it is up to the committee to examine a variety of options. If we move away from the self-collection method and it was rolled up as part of a new broadcast or household charge, it would be possible to have a 100% collection because it is automatically deducted like property tax or other charges. None of these measures in themselves solve all of the problems the broadcasting sector faces. In the short term, however, they increase the pot of money. That at least allows programming on public and private sector stations to be enhanced. The licence fee concept is going to be overtaken eventually, but it is still there and is generating a lot of money at the moment. However, the pot of money can be increased by a number of measures that are within the remit of these Houses to deal with. I encourage the committee to examine them.

Google and Facebook have been referred to. I was in the company of the head of Google News at the Walter Cronkite School of Journalism and Mass Communication in Arizona 18 months ago. There was a fascinating presentation about what it does but it does not employ a single journalist; it is all algorithms and computer scientists. We do not want to get to a situation whereby we do not have journalists going to the local courthouse, council meeting or this Parliament. Our democracy needs viable journalism, news and current affairs coverage both on private and public stations. That is why this conversation, as well as the committee's deliberations and recommendations are so important.

Chairman

Mr. Bass may wish to comment on film.

Mr. Larry Bass

I will comment briefly on Deputy Ryan and Senator McDowell's questions on the creative thinking hub. We are all open to that as we are a creative industry. It concerns the ability to bring about new ways of funding. We are all open to doing that in another form. The VAT rate in tourism was reduced to allow the sector to recover. One could take the VAT rate on those particular services and then redistribute the funds.

As regards regional film funds, who will put the money in? Irish film needs more money and Irish broadcasters need to support Irish film more strongly. If it is locally available it will be guaranteed to be spent locally, which is how it operates around the world. We all support that. In terms of other ways of making the RTE money go further, TG4 is a shining light as a public broadcaster. In fact, I would go so far as to say that it should not have any commercials at all. That aspect is so small in terms of TG4's income that it should have an increased Exchequer fee and be commercially free like the BBC. TG4 would generate more viewers that way. Equally, if RTE could move towards being more of a publisher-broadcaster, the independent sector could fulfil the role of more programming.

When the cuts came, as they did through the crash, the spend in the independent sector fell from €80 million to €40 million. We therefore took a 50% cut, have not recovered and it is getting tougher. The independent sector has taken its fair share of cuts but it can certainly build up and supply the content at a very high level. Film producers are putting Ireland on the map not just locally but also globally with their ability to gain Oscar nominations and Oscars. With Creative Ireland, of which we are part, we can address these funding issues collectively.

Chairman

On behalf of the committee I would like to thank the witnesses for a very worthwhile engagement. We look forward to working with them in future on that forum. I propose that the committee should publish the submissions received concerning this meeting. Is that agreed? Agreed. I also propose that the meeting be suspended for five minutes before resuming in public session. Is that agreed?

Senator Michael McDowell

Could we have a half a minute in private session before doing that, as I have one issue to raise?

Chairman

Yes. Is it agreed that we will now go into private session? Agreed.

The joint committee went into private session at 6.18 p.m. Sitting suspended at 6.27 p.m. and resumed in public session at 6.30 p.m.

Chairman

I remind members and delegates to turn off their mobile phones as they interfere with the sound system which makes it difficult for the parliamentary reporters to report the proceedings of the meeting and adversely affect the television coverage and web streaming.

By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the joint committee. However, if they are directed by the Chairman to cease giving evidence on a particular matter and continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or an entity by name or in such a way as to make him, her or it identifiable. I advise them that any submission or opening statement they have submitted to the committee may be published on its website after the meeting.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him, her or it identifiable.

I welcome the representatives of Raidió Teilifís Éireann: Ms Dee Forbes, director general; Ms Breda O'Keeffe, chief financial officer; Mr. Jim Jennings, managing director, RTE Radio; and Mr. Brian Dalton, managing director, corporate development. I also welcome the representatives of TG4: Mr. Alan Esslemont, director general; Mr. Pádhraic Ó Ciardha, deputy CEO; and Ms Mary Uí Chadhain, director of finance. I also welcome the representatives of the Irish Film Board: Mr. James Hickey, CEO, and Ms Teresa McGrane, deputy CEO.

I inform members that there are earphones available if they wish to avail of the translation service. I ask Ms Forbes, director general of RTE, to make her opening statement.

Ms Dee Forbes

I thank the Chairman and committee members for giving us the opportunity to discuss the future funding of public service media in Ireland. The invitation is timely, as the issue is pressing and important for us all.

Media organisations in Ireland are under very serious financial strain. RTE, with its broad remit and reliance on commercial revenue to cover 50% of the cost of fulfilling its remit, is no different. In Ireland's case, the reasons for the financial challenges facing media organisations are multifaceted, with some specific to us and some consistent with trends across the developed world. Most of the challenges facing the media industry are for us to meet. The digital age is dramatically changing audience behaviour and expectations. Audiences now expect and can access the media they want free of charge when they want them on multiple devices. The Internet is powering all of this change and as broadband speeds increase and the price decreases, the pace of change will increase.

Digital advertising is the fastest growing category of advertising globally. The move towards digital advertising was an obvious strategy for traditional media companies as they built their online services. This has been greatly complicated by the emergence and dominance of social media services. Facebook and Google together take approximately 80% of global digital advertising revenues, while investing almost nothing in original journalism, programming or content. Their entire business models are built on selling targeted advertising around the work of others, with little or no compensation for the original producer.

Like the rest of the developed world, audiences in Ireland have embraced new video-on-demand entrants like Netflix and Amazon and new on-demand services from Sky, Virgin Media and others. So far, broadcast television and radio services have been more resilient than other media types against this digital disruption. Notwithstanding the advent of all this new technology, the consumption of linear broadcast television and radio services remains high among the population as a whole, even if it is shrinking somewhat among younger audiences. Despite much of the hype coming from the digital media industry, around 90% of all television viewing in Ireland is of live television, with an average viewing period of three hours and seven minutes per day. The figures show that over 80% of people in Ireland listen to the radio for an average of almost four hours per day. That amounts to over seven hours on average per person every day spent in consuming the so-called dying media.

The competition for audiences and revenue among broadcasters in Ireland is fierce. Among television broadcasters, it has increased massively. RTE has always had to compete with the best funded commercial and public service broadcasters in the world. Sky, the BBC, Channel 4 and ITV channels have been accessible to the majority of homes in Ireland for many years. The purchase of Virgin Media by Liberty Global and the subsequent takeover by Virgin Media of both TV3 and UTV Ireland mean that all national commercial television channels in Ireland are owned by one highly resourced international media organisation. This will bring new commercial competition for RTE, although it is not yet clear if this new dispensation will lead to significant increased investment in Irish programming or commissions from the independent production sector in Ireland.

The commercial radio market has seen similar consolidation. Ownership of that market is now dominated by Denis O'Brien's Communicorp and, most recently, Rupert Murdoch's News Corp. Between them, they own both national commercial talk radio stations, one regional licence and eight local commercial stations. Combined, they retain an audience share of over 30% of all adults and a considerably higher share of younger listeners. Both organisations also retain significant interests in other media properties in Ireland.

While increased choice benefits audiences in Ireland, the growth of the phenomenon of TV opt-out advertising has been much less beneficial. Enabled by the European Single Market, 50 channels sell advertising in Ireland. As many as 39 are wholly international, largely UK, channels that invest little or nothing in Irish content. Combined, they take €50 million from the advertising market in this country, nearly one quarter of all Irish television advertising revenue. While RTE operates with half of the advertising minutage of its commercial rivals, it has always met these competitive threats head on. By European standards, it retains a healthy share of the audience for both radio and television services. As somebody who has worked in the international television sector for 20 years, the quality of much of RTE's programming stands up to the best in the world. Frankly, offering choice means that it must do so. In 2016, in particular, this quality was showcased with a range of unique cultural and creative content to mark the centenary commemorations, as well as the general election, Euro 2016, the Olympic and Paralympic Games, the six nations rugby championship and the GAA championships. However, the creative and journalistic challenges never stop. RTE must continue to challenge itself, take risks and innovate if it is to maintain its relevance and sustain its connection with the public. That is the challenge for it.

The appetite for quality has not diminished with the arrival of much greater choice. With investing in new digital channels and services, as RTE has done in the past few years, making creative and distinctive programming ultimately offers the best opportunity to meet the increasing competition. The key focus of RTE will always be investment in high quality Irish programming, Irish storytelling and Irish journalism. That is what makes it distinctive for audiences in Ireland. In any given year RTE produces or commissions approximately 80% of Irish television programming. Simply put, without its investment in programming, Ireland would be just another television market dominated by UK and US programming, much like what happens in Canada. There is a cost ratio of over 20:1 between home produced and acquired programming. Therefore, the fewer resources RTE has the less distinctively Irish its schedules become, the less programming it can commission from the independent production sector and the less commercially viable it becomes as a dual funded public service media organisation.

Along with the creative and journalistic challenges, the commercial challenge is ever present. While digital expansion and increasing competition amplify the commercial challenges, they have been made much more difficult by Ireland’s recent economic difficulties and the current uncertainty thrown up by unpredicted political events. Advertising has improved over the past couple of years, but Brexit is now having a direct impact. Television advertising has been severely hit both here and in the UK. Just last week, the Financial Times reported that ITV is blaming uncertainty over a hard or soft Brexit for a sharp drop in advertising revenues, which it warned could fall by as much as 7% in the final quarter of this year. As yet, the impact of a Trump presidency is unknown but at the very least it is creating further uncertainty.

As RTE's financial retrenchment since 2008 has been well documented, I do not plan to go into it now. I have added as an appendix to my written submission a couple of charts which tell a clear story of RTE’s cost reductions over the past few years.  We can discuss this in more detail if the committee wishes. However, the committee needs to be aware that we are currently significantly underinvesting in key areas of output due to our very tight financial position. Drama, arts and culture output, foreign news and children’s programming are all areas that we want to strengthen.  Of course, RTE must continue, like any business, to reduce costs, and we will, but we now do not have enough resources to remain competitive or, in the longer term, relevant, let alone be the engine that drives the broader Irish creative economy. 

It is important for the committee to understand that it is not just RTE saying this. All the independent reviews that have been conducted over the past few years confirm this reality. These reviews have been comprehensive. They analysed, internationally benchmarked and reviewed in detail almost every aspect of what RTE does and how it does it. As the committee will be aware, a number of very clear conclusions and recommendations have emerged from this review period. RTE has been judged to be efficiently run against best international benchmarks and the scope for further cost reductions is limited. Given the complex dynamics in the Irish media market, Indecon has concluded that RTE is likely to continue to lose market share over the next four to six years, limiting its capacity to significantly grow commercial revenue in the medium term. The BAI has recommended that public funding to RTE should be increased in both its five-year review and more recent annual reviews. NewERA also recommended that consideration be given to increasing public funding to RTE. As concluded by Crowe Horwath, RTE must invest more in digital services to sustain and enhance its public service contribution in the medium to longer term and NewERA echoes this view. NewERA suggested that options regarding the use in part or whole of the RTE site in Donnybrook should be explored as a source of funds for capital investment.

  RTE would agree with each of these observations and recommendations but where does all this leave us?  My predecessor, on the anniversary of 50 years of Irish television a couple of years ago, stated that this sector was at a crossroads and that policy makers had to act or much was at risk of being lost. His call was not listened to. There has been little or no action and there has, until today at least, been little serious public discussion with policy makers about what should and could be done or, indeed, what is even at risk. While I therefore very much welcome today’s discussion and hope it can lead to some real decisions and action, the question is, what decisions? There are market interventions that are worth considering.

  The Department, as reported recently, appears to be looking at ways of addressing the impact of opt-out advertising and this is welcome. Any intervention that could increase investment of commercial revenues into Irish programming and the independent production sector in Ireland would be very welcome. Similarly in other markets, such as France in particular, there have been moves to introduce levies on distributors and telecommunications companies to support public funding of public service media. Changes to the must-offer-must-carry and copyright legislation, which we understand the Government is currently considering, will potentially level the playing field in negotiations between broadcasters and platforms, which should lead to much fairer compensation arrangements between them.

There is also great scope for reform of public funding. The current television licence fee system is no longer fit for purpose. Evasion currently stands at around 15% and the number of homes classified as "no TV homes" for the purposes of the television licence fee stands at around 8%. In aggregate this results in more than €50 million per year lost to public service media and, therefore, to the creative industries in this country. This is a huge loss to Irish programming and to potential jobs in the independent production sector. While RTE continues to hold the view that a household-based licence decoupled from any device, as has been introduced recently in Germany, is the most sensible solution, there are other reforms to the current system which could dramatically improve performance. These include tendering the collection agent contract, rebuilding the television licence database and removing the outdated television set exemptions. The UK, which had a very similar system to Ireland, has shown that a series of integrated reforms can lead to dramatic improvements in collection performance. Budget 2017 saw a welcome partial unwinding of direct cuts to RTE’s public funding that happened during the recessionary period. In budgets 2011 and 2014, cuts totalling €20 million were made to RTE’s funding and while €6 million was reinstated in budget 2017, which was very welcome, more is needed here. 

Any of these interventions are predicated on the assumption that policy makers believe that public service media is something worth sustaining and enhancing. I am conscious of the human difficulty for politicians in reconciling the need to increase investment in RTE, no matter how compelling the argument, and the role that RTE has in questioning, challenging and investigating all those in public life. I am conscious too that there are arguments for allocating public funding to organisations other than RTE. Notwithstanding their private ownership and commercial purposes, clearly other media organisations perform elements of public service, whether that be commercial radio stations or local and national newspapers. RTE would welcome a discussion on these issues and will argue the case for independent public media. All I ask is that we move these discussions forward. The time for endless reviews has passed.  What we need now is action. 

Inaction will have far-reaching consequences for journalism, for national cultural expression and, most alarmingly, for public debate and politics. David Remnick, the editor of the New Yorker magazine, noted last week that we now live in a collapsed media structure that has caused us to live in our own silos of reality. Social media, highly commercial and market focused multi-platform news channels and the financial strain on traditional media organisations, including public service media, are eroding the very notion of a trusted public space that is impartial and balanced.  At its best, public service media provide a compelling response to the challenges and opportunities of the digital era, to the changes and challenges of fragmenting societies and to the growing public disconnection from institutions. In a world increasingly dominated by international media and content, strong indigenous public service media are essential if we are to support and preserve vibrant local cultures and distinctive identities.  We need the resources to do all of these things well and to protect all that is important. 

Chairman

I thank Ms Forbes and ask Mr. Alan Esslemont from TG4 to make his presentation.

Mr. Alan Esslemont

Tá TG4 an-bhuíoch an deis seo a fháil chun labhairt leis an gcomhchoiste Oireachtais seo maidir le maoiniú na craoltóireachta seirbhís poiblí. Tá TG4 ar an togra Gaeilge is dearfaí agus is airde próifíl a rinne Rialtas le 50 bliain. Tá lán-tacaíocht faighte aige ó gach Rialtas agus ó gach páirtí polaitiúil ó 1992. Tá aitheantas náisiúnta agus gradaim agus duaiseanna náisiúnta agus idirnáisiúnta faighte go leanúnach ag cláracha agus ag pearsana TG4. Tá ár gcláracha ceannaithe agus craolta ag craoltóirí thar lear freisin agus tá ábhar Gaeilge ár gcainéil ar fáil ar fud an domhain.

Public service broadcasting, PSB, serves national and regional audiences and by dint of quality, impartiality and public trust can help form the cultural values and democratic citizenship of a country. To those of us who have experienced public service broadcasting in more than one European country, it is clear that Ireland has been very well served, both culturally and democratically by its public service broadcasting services.

Economically, as displayed in the recent UK public and political debate on the future of the BBC, public service broadcasters have a key role in stoking the engine of audio-visual creativity.

In a globalised world of content, skills and successful programming are increasingly tradeable and traded and the new BBC Royal Charter puts all of the British television sector in a very strong position to exploit this global market. The television producers association, PACT, estimates that the UK television production sector has revenues of £3 billion and that international TV revenues grew at a rate of 13.4% in 2015. However the biggest source of revenue for the UK’s production companies remains their primary UK commissions, underlining the importance of public service broadcasting, PSB, as the major driver for the creation of international revenues.

As recognised in the 2009 Broadcasting Act, TG4 occupies a central space in the PSB landscape in Ireland. TG4 operates as a publisher-broadcaster, a model which allows us to combine creativity, audience focus, and nimbleness. The great majority of TG4's Irish-made programmes are commissioned from independent production companies throughout Ireland and TG4 spends 90% of its annual programme budget on independent production, that was €21.2 million in 2015 and the figure increased in 2016. In 2017 we intend to increase our out-of-house production spend and to take measures to encourage stability and development in the independent sector.

There are 200,000 people, of all ages, who live in the Republic of Ireland and speak Irish on a daily or weekly basis outside of the school environment. This audience displays a full expectation that TG4 will serve them a range of programmes that is as deep, broad and rich as English speakers in Ireland would expect from RTE One or that British viewers would expect from BBC One. News, drama and light entertainment are the genres most valued by our core audience.

However from its first day of broadcasting in 1996, TG4 has made clear that, in the same way as the Irish language belongs to all of the people of Ireland, TG4 will seek to appeal to all audiences in Ireland at certain points of the day and of the week. Audiences with less fluent Irish, or no Irish at all value TG4’s programming very highly. The largest numbers of this national audience come to us for the genres of music, factual and sport.

It is easy in any debate around the funding of public service broadcasting, to push matters of minority language to the edge of the focused agenda - a single bullet point, a hermetically sealed topic that does not impinge on the major questions regarding broadcasting. This marginalisation has not happened in Wales and the result has been that Cardiff now finds itself, along with London and Manchester, at the centre of a global creative industry. The drama skill set honed during the decades of production of Welsh language drama for S4C was key to the decision by the BBC to produce worldwide drama such as "Doctor Who" in Cardiff. Only countries and regions with a strong domestic television market will bring their skills to the level that allows them break into global markets.

Reports commissioned by the BAI over the last years give clear evidence that TG4 cannot sustain further cuts to its funding. We need to create sustainability in our baseline content funding which is at present very far below that of S4C, the Welsh-language channel, and risks, under the new BBC Royal Charter, falling below that of BBC ALBA, the Scots Gaelic channel.

We are very ambitious for TG4 because we believe that being ambitious for TG4 is being ambitious for Ireland’s culture and for Ireland’s democracy. The funding of public service broadcasting lies at the heart of how that ambition can be enabled. We are most grateful to receive this opportunity to contribute to this public conversation on the funding of public service broadcasting, PSB and see TG4 as a unique asset which lies at the centre of that debate.

Go raibh maith agat.

Chairman

I now invite Mr. James Hickey, chief executive officer of the Irish Film Board to make his opening statement.

Mr. James Hickey

The Irish Film Board very much appreciates the opportunity to make a presentation to the Joint Committee on Communications, Climate Action and Environment on public service broadcasting.

The Irish Film Board has had a really successful year in terms of Irish creative talent showing the strength and depth of their work on a word stage. I am sure everybody is aware of the feature film "Song of the Sea", which was nominated for an Academy Award in the best animation feature film category last year. Both "Room" and "Brooklyn" were nominated for best feature films this year. This shows the strength and depth of Irish creative talent in the feature film sector. It is vitally important that the Irish Film Board emphasises that this is a result of the years of investment in creativity and the development of Irish creative talent. The primary concern of the Irish Film Board is that it continues to invest in that talent.

The Irish Film Board is very pleased to see that 2016 was a great success in the way in which the importance of culture was placed at the centre of Irish thinking and society. The strength of culture and media content was brought to the fore by public service broadcasters and in particular by the work that RTE undertook during the commemorations. We in the Irish Film Board believe strongly that this legacy is something than can be built on and can bring a greater sense of Irish culture and creativity to the country. We would be very excited to see the country take advantage of this opportunity to advance this legacy.

The funding of the Irish Film Board was increased this year, which was welcome, however there is a long way to go before the funding is restored to the levels we were at previously. Equally, we believe it is very important that a resolution be arrived at in respect of the funding of public service broadcasting. This applies to both RTE and TG4, because of their relationship with film makers, the creators of screen content. The Irish Film Board supports feature film makers, the development of TV drama, the development and production of TV animation and would like to see all these sectors supported to a much greater extent by public service broadcasters. However public service broadcasters can only do that if they are provided with the additional funding which they need in order to achieve that really great contribution to creativity and to the strength of talent that is undoubtedly there and which has been proven to be there. The Irish Film Board needs to create a situation where investment is made. It is our experience that only with investment in creative talent, which the Irish Film Board has done for many years that the success can continue to be achieved. That is very important.

We were consulted on the importance of section 481 as the tax investment for feature film, TV drama and TV animation production. In Ireland the Irish Film Board estimates that as much as €200 million of eligible expenditure occurred on feature films, TV drama and TV animation alone in 2015 primarily as a result of section 481. As a result significant levels of international investment were brought to Ireland, for example, very major TV series, such as "Penny Dreadful" and now a major AMC TV series "Into the Badlands" are being made in Ireland as a result of these incentives.

We have the rich creation of jobs for cast and crew members and creative talent across the board as a result of this investment. We emphasise the major importance of section 481. We believe that in 2016 expenditure will increase to something in the order of €240 million plus. It will mostly be driven by projects funded from the international market.

Chairman

I apologise to Mr. Hickey, but I must suspend the sitting as a vote has been called in the Dáil. We will resume after it. Is that agreed? Agreed.

Deputy Timmy Dooley

It is a vote on the Finance Bill 2016 and if we do not vote, a sum of €6 million could be in jeopardy.

Sitting suspended at 7 p.m. and resumed at 7.10 p.m.

Chairman

I apologise to Mr Hickey for interrupting his opening statement and ask him to continue.

Mr. James Hickey

When we stopped, I was talking about the importance of section 481 as a tax incentive and how successful it has been in generating an enormous level of production activity in the independent production sector, such that we expect it will be well past €240 million this year. The important thing to say is that the independent production sector is a strong and well-resourced sector, which is well able to benefit from international income and local investment in terms of supporting Irish creative talent. It is really important that continues.

I said earlier that it was important that the relationship also exists with public service broadcasters and that they are able to invest in creative talent, in particular in the areas of feature film and TV drama animation and, in particular, to spend the money that is needed, above all else, for projects involving development funding. It is the lifeblood of the creative sector - it is the equivalent of research and development funding in other areas, and we all know the importance of that in areas like software, pharmaceuticals and everything else. One must spend money and invest in talent to enable talent to succeed locally and generate income internationally. It is really important to emphasise the importance of development funding.

The Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs recently commissioned a report on the audiovisual sector. The consultants who have been appointed in respect of that report started work this week and will examine the audiovisual sector as a whole. It is hoped they will publish a report in the second quarter of next year. This is something that will help to contribute to how best to promote Ireland as a centre of excellence for media production on the world stage.

We already show our skills and strengths in this area. Some of the largest TV drama series in the world are made in the Republic of Ireland, as well as in Northern Ireland. For example, "Penny Dreadful" was made in the Republic of Ireland and we all know about "Game of Thrones" in Northern Ireland. Ireland as an island is very successful in terms of its capacity to undertake major TV drama production. In terms of job creation, it is a major success for us.

We emphasise the need to continue to invest in Irish creative talent and tax incentives that support international production. We are competing in a world where most other countries have those kinds of incentives. With the audiovisual sector report, there is a real opportunity to examine how best to move forward on capitalising on the strength of the creative talent we have in screen content production in Ireland.

Given that we are discussing public service broadcasting, I again emphasise that public service broadcasting should be supported sufficiently. Not only is it important in terms of news and current affairs, but it is very important as the basis of Irish creativity, culture, storytelling and creativity, whether live action, animation or TV drama. All those things are as important as news and current affairs in terms of public service broadcasting. We want to make sure that the emphasis on those areas is maintained because they are the areas supported by the Irish Film Board - we want Irish creative talent in screen content.

Chairman

I thank all of the witnesses for their opening statements. I have a number of questions before I call on members. I will start with the Irish Film Board. I ask Mr. Hickey to flesh out the proposal with regard to contributions or levies on broadcasters and other content users in terms of funding the Irish Film Board. How does that work internationally? Are there any comparisons?

I note the reference in the submission to Film4 and BBC Films. Is there a suggestion that there be a comparable station in Ireland?

I refer to TG4 and Irish broadcasters. Reference was made to how they could co-operate better. I ask Mr. Hickey to elaborate on that, with particular reference to serving young audiences in, as he put it, a non-linear world.

With regard to RTE and Ms Forbes's reference to the recommendation made in NewERA's report that consideration be given to use of part of the Donnybrook site to raise funds for capital investment, have plans for sale of the site been advanced and, if not, what is the current position?

Is Ms Forbes committed to the continuation of "Oireachtas Report" and not reducing the length of the programme?

On the financial position in 2016 and RTE's coverage of the Olympics Games and the 1916 Rising commemorations, for which there was advance planning, perhaps Ms Forbes might expand on what happened in 2016 that caused the deterioration in the financial position?

Reference was made to the television licence no longer being fit for purpose. I would welcome Ms Forbes' views, or those of any of the other delegates, on the commercial television licence fee.

Deputy Timmy Dooley

I am happy with the responses thus far from TG4 and the Irish Film Board, but I would like to put a couple of questions to the RTE representatives.

Recognising the growth of social media across the digital platform and the real threat this poses to the principles of public sector broadcasting, namely, fairness, balance and impartiality, it is incumbent on all broadcasters, public and private, together with legislators, to move quickly to address the challenge. Ms Forbes posed that question to us in the context of her reference to what had been said by her predecessor. She appeared to be indicating that there had been a lack of action by all of us collectively in that regard, but perhaps I am wrong and she was suggesting there had been a lack of action on the part of legislators. My response is that there is a need for a greater level of engagement between all concerned, including on the ambition and vision in a business plan for how RTE would propose to spend the funding that obviously needs to be made available. I recall the report of the Broadcasting Authority of Ireland, BAI, which referenced the need for greater ambition on the part of RTE in identifying ways to grow and take on challenges. The report was considered by the committee, but it is for legislators to assist in considering the funding model to be used. From my point of view and that of the party I represent, we will not be found wanting in that regard.

I refer Ms Forbes to her statement that she is conscious of the human difficulty for politicians in reconciling the need to increase investment in RTE, regardless of how compelling the argument is, with its role in questioning, challenging and investigating all those involved in public life. I can assure her that whatever the role of RTE in investigating anybody involved in public life, that will not guide us in supporting public sector broadcasting. Politicians of all colours are well able to differentiate between the role of RTE in providing an investigative journalistic platform and its role as a public service broadcaster. I am not sure how Ms Forbes might be informed by that comment. I have not heard anything in the committee's discourse with RTE that would lead me to believe that has been an issue or in any way an encumbrance in our support of RTE and ensuring it receives appropriate funding. There has been the lack of an appropriate vision and ambitious planning on the part of RTE, taking into account the challenges faced by it, but it is a matter for it to develop such a plan. As I acknowledge Ms Forbes has only recently taken on her role, at this stage she might not have a plan in place, but I suspect that on the next occasion she appears before the committee it will be and that it will set out her vision for RTE, taking account of all the challenges it faces.

On funding, Ms Forbes has identified some welcome ideas. Has consideration been given to the introduction of levies to be imposed on distributors in telecommunications companies similar to those which are applicable in other markets? For example, has consideration been given to the imposition of levies on Facebook and Twitter or does Ms Forbes see them as being within the mix of distributors, although I accept that they are not telecommunications companies? In other words, does she see potential in levying social media platforms? Also, when does she expect to be in a position to bring a plan before the committee which would assist it in its deliberations on a proper funding model for RTE?

Senator Terry Leyden

I welcome the delegates and thank them for coming. I congratulate Ms Forbes on her appointment as director general. She has a tough task ahead of her. I also welcome Mr. Alan Esslemont, chief executive of TG4, and his team which is doing a fantastic job.

What is the future of RTE 2, given the current funding position? The committee is also concerned about the position on local radio broadcasting. Local radio stations provide a tremendous service throughout Ireland. They are very accessible.

An issue of concern to most politicians is the content of "Oireachtas Report". While it provides coverage of proceedings in the Dáil, it often excludes coverage of proceedings in the Seanad. I have been a Member of both Houses.

On the sale of part of the Donnybrook site, I presume the RTE studios would remain on the site.

On the licence fee, I am always amazed by the fact that small pubs are required to pay the same annual fee of €160 as larger pubs such as Wetherspoon, despite the fact that in the case of the latter, the properties involved are often 20 times greater in size, and that a hotelier pays the same fee as a householder. While the rate of VAT was reduced for the hospitality sector from 13% to 9%, there has been no return in that regard as far as RTE or anybody else is concerned, but I do not propose to engage in a "Today Tonight"-type investigation with the delegation.

The committee is very pleased with what is being done by RTE and TG4. TG4 provides tremendous content in terms of documentaries and so on. RTE is the flagship company and all Irish people are proud of it. Programmes such as "The Meaning of Life" hosted by Mr. Gay Byrne, whom I wish a speedy recovery to good health, in which he recently engaged with the Papal Nuncio to Ireland, Archbishop Charles Brown, indicate the quality of Irish broadcasting and justify the level of expenditure in respect of the licence fee. The more money that is raised the better for RTE and other local broadcasters. In that regard, there is a need for a better collection system and a recognition that people are opting not to have a television set and instead watching programmes on computer screens and so on. I agree that people are paying massive amounts per month to Sky and other providers.

Chairman

Perhaps Mr. Esslemont might respond to the question on the level of co-operation between Irish broadcasters and how TG4 might tap into a younger audience.

Mr. Alan Esslemont

The lesson to be learned from Facebook and TripAdvisor is that people are looking for one digital solution. I worked in Britain for the past ten years. To an extent, broadcasters in the United Kingdom are beginning to acknowledge that while they need to compete on content, they should co-operate in the use of infrastructure. There has been talk of the BBC iPlayer being turned into an open iPlayer in order that there would be one deep well of digital content in which people would be able to access British content. In other words, one would be able to access programmes on the BBC, ITV and Channel 4 in the same place.

It would add to the passing traffic. They have done it because they realise the competition is Facebook and Netflix. It is not the BBC against ITV any more. In the same way radio has done a great job creating a single player, if we can hold onto our brands but create a shared digital space, it would be good, especially for younger people. Young Irish speakers want to do the normal thing. If the normal thing is to go to a place that is mainly English, we will lose a hold on this audience. Co-operation can help with all audiences, especially young audiences.

Chairman

Could Mr. James Hickey reflect on the licence fee and how it operates internationally? In his statement he referred to Film4 and BBC Films. Maybe it is an opportunity for him to talk about the Irish film channel and where it is at.

Mr. James Hickey

Ms Forbes mentioned funding models and levies. Funding is going on at EU level. The audiovisual media services directive is on its way through the legislative process. As I mentioned in my submission, it provides for levels and prominence of European works in digital media services and for levies and contributions from those services for indigenous screen content. It is the French model. In France, screen content is funded through various means. It goes back to the days of levies on cinema seats and DVDs. It is now up to levies on Internet service providers. Screen content is funded through those levies. While it is a French system, it also exists in Germany and other EU countries.

Our Irish Film Board Strategic Plan 2016-2021 specifically suggests we continue "working with European Film Agency Directors on the development of EU policies on film and screen content, including initiatives on the Digital Single Market (DSM), the Audiovisual Media Services Directive (AVMSD) and directives in relation to copyright and e-commerce". This is the area we are in. One of the major issues is country of origin. Under current country of origin rules, only the country where the service provider is located can regulate the party. However, a proposed change under the audiovisual media services directive would allow a country which is targeted by a service from a country into another country to consider putting levies or contributions on the service.

In an Irish context, it is a very important discussion which needs to be had. It needs to be investigated further and I urge the committee to investigate what is being done at European level and how it would impact on issues such as opt-out advertising regarding the services that come from the UK. They are not digital services, strictly speaking, but there could be a way of examining it. These are areas the committee could explore.

BBC Films and Film4 are operations within the BBC and Channel 4. They fund feature films instead of television programmes. Most European countries have film funding arrangements with public services broadcasters which are regulated in a particular way. Ireland should follow suit. In my world, if there were an RTE film organisation within RTE, I would welcome it. This depends on RTE's funding, and it brings us back to the discussion on funding and the licence fee.

The concept of an Irish film channel was in the Broadcasting Act 2009. We must consider the fact that technology has significantly overtaken where we were in 2009 and we must re-evaluate how best to re-examine the proposal in light of the development in technology.

Ms Dee Forbes

We are very committed to coverage of the Oireachtas and we were very glad to get Oireachtas TV on Saorview earlier this year. Saorview has been a growing platform and is a great success story. We would love to continue to do that, however we need to speak more with the committee and decide how best to cover the broadcast, particularly in light of the digital generation, and how we can best serve the information to another generation. We are committed to it and how we do it needs to be examined. We must engage a wider public.

Deputy Timmy Dooley

How would Ms Forbes propose to frame the discussion with the committee? How does she intend to engage with us?

Ms Dee Forbes

We just need to come in and discuss it with the committee. Ms Deirdre McCarthy has already been in discussions with some people here around it. It is about sitting down and discussing the best way of doing it. The digital environment provides us with an opportunity to give a better service. It is about having a small group come in, sit down and talk with the committee members.

Ms Breda O'Keeffe

On the potential land sale, the backdrop to any decision on the land sale is around capital investment. It is well known, and mentioned in the NewERA report, that during the period when we had to constrain our finances, we have had to curtail capital investment. The one area we have not curtailed is our digital terrestrial television, DTT, investment. We invested more than €60 million in DTT, and it was very important in releasing an important digital dividend for Ireland. Notwithstanding that, we have curtailed our capital investment and it is in that context that any potential disposal proceeds would be used.

As any member will know, it is important to reinvest. We have reinvested in capital at approximately half the level of our depreciation over the past five or six years, which is unsustainable. NewERA in particular commented on this and reaffirmed in the review that there was a key concern, given the importance of maintaining relevance in a competitive environment, particularly in the digital environment, that we would continue to invest in our assets. It is primarily to address this shortfall in capital funding that any potential disposal of underutilised lands in Donnybrook be used. There has been media coverage around it and we have secured planning permission around a crèche and an N11 entrance. While we are developing options, no final decisions have been made as we review the options.

Mr. Brian Dalton

Regarding our innovation and political coverage, no public service broadcaster in the British Isles does more in prime time viewing than RTE. The BBC does not have prime time current affairs programmes on at 9.30 p.m. three times per week. The amount of live, prime time political coverage is very significant.

Regarding the challenge to us to innovate, particularly embracing social media, in the last election we formed partnerships with colleges, universities and different media faculties whereby young graduates were able to partner with us to provide coverage from every constituency. There was great acknowledgement of the extent of the coverage and how we did it to fully embrace social media. My colleague, Mr. Jim Jennings could elaborate further on it. We are an organisation that wants to embrace digital technology and we can show that when we have national events, we do so. The issue is the funding on an ongoing basis to enable us to do it and bring in the skills and talents, particularly of young people, to ensure we stay relevant to that generation.

Senator Terry Leyden

What is the future of Network 2?

Mr. Jim Jennings

RTE 2 television is still a very important part of our portfolio of services. For example, it is our main television station for sport. All our sport and children's programmes appear on RTE 2, and on TG4. These are important public service offerings for us in terms of our sport and children's programmes. We have younger entertainment programmes later in the evening. It is a very important station to us in terms of complementing what we do on RTE 1 television. It is crucial to our delivery of children's programmes, young people's programmes and sport.

Senator Terry Leyden mentioned local radio, and it is important. Representatives of local radio were here earlier. The committee might hear, from some of the discussions with TG4, the Irish Film Board, local radio and the Independent Broadcasters of Ireland, IBI, we are ad idem on many issues regarding our industry and the desire to get some action around funding.

We may argue about how the funding will be divided and who will get what, but it is very important for local and national radio and national media that we have indigenous newsrooms that bring Irish content to listeners and readers. This is a valuable debate. Sometimes we have varying views, but RTE and the Independent Broadcasters of Ireland worked together on the radio player and we work together on the PPI awards. We have also worked together with the Irish Film Board and TG4. We have much in common.

Chairman

Two questions have not been answered. When will the plan for RTE be published? With regard to the importance of funding, what are the witnesses' views on a commercial charge? Perhaps it is a political question but maybe the witnesses have a view on it.

Ms Dee Forbes

The committee is probably aware RTE has an obligation to come up with a five year plan with the BAI and we are working on this. It will be published towards the end of next year. Leading into this will be the longer-term vision for RTE and we are very much across it now. There is much work to be done on it. What we want to come up with is a plan that is a living breathing document which we will be able to deliver over a period of time. As the committee is aware, the industry is evolving and the last thing we need is to produce a document which will be out of touch as soon as we write it. We need to engage in a process, as we are at present, to create a strategy that is deliverable and will have ambition and innovation at its very heart, because this is what RTE is about and what we want to be about in the future.

Chairman

What about the commercial TV licence? Does any of the witnesses want to comment on this?

Mr. Brian Dalton

For clarification, does this relate to the earlier question about hotels?

Chairman

Exactly.

Mr. Brian Dalton

If we look at other countries, there is a classification depending on the number of people accessing the service. This is a matter for policy makers. As we have already stated, fundamentally, the big question for the wider industry in Ireland is the loss of approximately €40 million to the sector based on evasion. This would mean approximately 500 jobs. Whether it is a more efficient collection system for the commercial or domestic home, we are speaking about 500 jobs which could be created and more digital content which could be supported, and graduates being trained in the area could be employed. This is the bigger question.

Chairman

The evasion.

Senator Tim Lombard

I welcome the witnesses. Regarding the vision for RTE, the future financial model is questionable when we take into consideration capital issues regarding Brexit and how it will affect the commercial side. Has RTE been affected by a lack of advertising because of Brexit? To what degree will it affect RTE in future?

Ms O'Keeffe stated if the Donnybrook site is sold the proceeds would be for capital use. How will the day to day issues be run if this capital injection is not used to keep the business going? What review will take place? Brexit is a moving entity and we are unsure where we are going long term. The knock-on effects it could have for the industry and advertising are immense. Listening to people in the industry and the uncertainty about where we are going, perhaps the money from a capital disposal of the Donnybrook site could be used to keep the industry going. I am concerned the proceeds from disposing of the site in Donnybrook would go towards capital investment rather than plugging a gap that might come into existence due to a lack of commercial activity because of the unfortunate dilemma we have at present with Brexit.

Senator Trevor Ó Clochartaigh

Cuirim fáilte roimh na finnéithe ar fad agus gabhaim comhghairdeachas le Ms Forbes agus an tUasal Esslemont as ucht a gceapacháin. Tá súil agam go n-éireoidh go han-mhaith leo. I place huge importance on the public service broadcast remit. I should say I had an interest previously, as in a previous existence I was employed indirectly by TG4 and RTE as a producer director. I am interested in the issue of fairness and balance in public service broadcasting and it being independent in what it produces. Because it is so dependent on Government funding how does it get this balance right with regard to being able to be critical of the State as well as having its hand out looking for more money?

There is a perception that RTE is very Dublin 4-centric and does not have regional vision, and that it is very middle class, white and middle aged. This is the perception that is out there. Public service broadcasting is about looking at drama, arts and culture. The question of diversity being seen on screen and in production I see as a huge part of the public service broadcasting remit. How does RTE intend to live up to this?

RTE has undersold itself on its Irish language content. It has devised a very good Irish language strategy and there has been improvement in the Irish language area. Do not undersell the Irish language. I do not think that because TG4 is doing such a good job it lets RTE off the hook on the Irish language remit. It has something to be very proud of, in particular Raidió na Gaeltachta. Parts of the public service broadcasting that might not have been mentioned are stations such as Lyric FM and Raidió na Gaeltachta, which would not happen if there was not a public service broadcasting subsidy. It is very important.

What is the future of digital content which both broadcasters envisage? It is changing so quickly. What are the changes in the digital industry they see coming forward? How will they adapt to deliver what is needed not next year but two or three years down the line? This leads to a point raised on capital investment. Ms O'Keeffe mentioned there is a need for capital investment to keep ahead of the technology. What is envisaged in this regard? If money is being given from the State coffers we need to have a sense of where the organisation sees the money being spent in a capital sense so it is not overspent.

What is the regional policy of RTE? This is also part of the public service remit. TG4 proved fantastic broadcasting can be done from a bog in Connemara, where I live. Why has RTE not had more of a regional footprint?

The funding issue strikes me as quite simple. There used to be less competition in the market and more money from advertising was spent on the two main broadcasters, but the money now goes to companies such as Facebook, Google and Netflix. How do we follow the money and how do we get back some of the money from these multinationals? I do not think it is a good idea to go after more taxes from households. There is no appetite for it or an ability to pay in many cases. I would much prefer us to follow the profits and the money rather than trying to take more money from struggling households.

Another issue which is raised from time to time is the fees to top presenters. We are always told massive fees must be given to the top presenters in RTE because otherwise they would go away. We saw that when Pat Kenny went to Newstalk the audience did not follow him. Is this argument still justified? Much of the best talent in TG4 in the beginning was poached by RTE, and fair play to the people involved who have gone on to great careers.

Deputy Timmy Dooley

The public poached the Senator.

Senator Trevor Ó Clochartaigh

They did actually, but then TG4 poached me back. It is an issue, and people ask why we spend millions on presenters when we have people of wonderful calibre who can do the job for much less money to a very high standard, sometimes bilingually. People want to see the money spent well and they question these expenses.

I asked previously about a regional film fund. Do the witness see benefits in a regional film fund and money being made available to enhance broadcasting and the content being provided across the board?

Deputy Eamon Ryan

I thank the witnesses for their presentations. I agree with Deputy Dooley. We can work on at least two assumptions. We know the difficulty with regard to the various roles involved, in that broadcasters must be tough on politicians sometimes and the witnesses can rest assured most politicians here do not bear a grudge.

Ms Forbes can also accept the assumption set out in her opening statement that there is real conviction here that public service media is worth sustaining and enhancing although it is not without criticism. We must also focus on the issue of public value for money. We are not so much judging editorial content because were we to start doing that we would get into trouble but we do have to ensure there are systems in place to enable quality, impartial and honest broadcasting. As luck would have it, when it comes to the issue of funding the Government has passed the ball to this committee, which I accept is not necessarily a bad pass but I hope it is not a hospital pass. There is a crisis in public service funding of broadcasting across all media because of the disruptive effects of the digital revolution that is taking place. This committee is the vehicle tasked with consideration and resolution of this matter and coming up with proposals for Government in that regard. The Minister has been very clear on that point. I believe we should take up that responsibility and that we should do so in a creative way, which I am sure all here are committed to doing.

I have a couple of specific questions for the witnesses. My first question is to Ms Forbes, although I accept she may not be able to respond to it. Ms Forbes intimated that the digital revolution is taking place in a way we did not expect in that we thought broadcasters would get a large slice of the digital media advertising pie, 80% of which has been scooped by Facebook and Google. Am I correct that Mr. Hickey's response to that was to the effect that we could scoop back somewhat in that regard by way of the imposition of a charge on Internet service providers or is there some other strategic development happening in the wider digital world through which content creators may be able to recover some more of that pie? I accept that is not an easy question to answer. I raise the issue because the solution is not one that is specifically proposed. Perhaps there is no strategy in that regard and this is an issue we might need to tease out further.

On the opt-out of advertising clause, a favourite subject of mine for many years has been the lack of regulatory control over advertising such that money accruing in that regard is being taken out of the country with no investment in content creation here. It was stated that this is enabled by the European Single Market. Aside from the changes that will come about by way of the audiovisual media services directive, is it being suggested, in terms of the wording used in the presentation, that Brexit is likely to have implications for those outside of the Single Market. God help us if Rupert Murdoch ends up being one of the losers from Brexit.

My next question is for the delegation from TG4. How much did TG4 raise in advertising revenue in 2015? My final question is to Mr. Hickey. I was very interested in the prospect of a film channel and I remain so. I take his point, however, that technology, platforms and delivery mechanisms may change but there is still an underlying issue in terms of value for public money and so on for the hundreds of millions of euro spent over many years building up an archive of Irish films, many of which I have only ever seen a minute clip of, none of which has been shown since. If a film channel is not to be introduced how might we get that content out to the Irish public bearing in mind the money spent on it down through the years?

Senator Michael McDowell

I am conscious that it is late in the evening. I welcome everybody and thank them for participating in this formal meeting. As hinted earlier it might be necessary at some point for us to have a more informal discussion about some of the issues that are being raised.

It may come as a bit of a shock to Mr. Esslemont to hear this but before he came into the room a previous speaker had suggested that TG4 might give up advertising and that it might benefit from that in terms of audience satisfaction. My question feeds into an issue raised earlier by Deputy Eamon Ryan. Is it crucial for TG4 to be in a position to advertise and what percentage of its budget does advertising income represent? As I said, it was suggested that TG4 might be better off giving up advertising. Mr. Esslemont mentioned in his presentation that TG4 is at a serious disadvantage compared with TV3 in terms of its permitted number of minutes per hour of advertising. Some of us might confess to having watched "Tonight with Vincent Browne" in our darkest hours. It is true that one can put out the bins and make a good cup of tea during the advertising breaks for that programme. Is there an advantage in TG4 becoming an advertisement-free zone, as suggested earlier in Mr. Esslemont's absence?

Chairman

To recap, the questions for RTE are, the Brexit effect on broadcasting, the regional policy of RTE, the future of digital content and how it is proposed to adapt to it, how it is proposed to deal with Facebook and Google and fees to presenters, content and how we recover money invested in that regard, the opt-out clause in terms of advertising and the Brexit effect of being outside the Single Market. The questions for TG4 are how much advertising revenue it raised in 2015 and how critical advertising revenue is to TG4. The question for the Irish Film Board is how we get content out to the public.

Ms Dee Forbes

I will respond to the questions on RTE's regional policy. First, RTE is proud of its regional coverage down through the years. We have 14 regional offices throughout the country which employ approximately 250 staff. Two of our major services, Raidió na Gaeltachta and Lyric FM, come from Galway and Limerick. On top of this, a huge amount of content is produced from our Cork studio, including "The Daily Show" which is transmitted live in the afternoons and in respect of which between 40 and 60 staff are hired on an ongoing basis. We are committed to the regions. Shows such as "Nationwide" are an indication of our commitment to developing and showcasing stories from the regions. Other examples of our commitment across the regions include our coverage of the National Ploughing Championships and other activities. As I said, we are very proud of our coverage across the regions but I accept there are opportunities for us to do more. Work is currently under way on the use of digital services to showcase more from the regions. I hope to be able to bring results in that regard to the committee very soon.

Chairman

Would Mr. Esslemont like to respond on behalf of TG4?

Mr. Alan Esslemont

I will ask my colleague, Ms Mary Uí Chadhain, to do so.

Ms Mary Uí Chadhain

In regard to the question on whether TG4 would be better off without commercial income, we would only be better without it, financially speaking, if the money derived from it was available to us from somewhere else. We would like to see the money first before making any decision in that regard.

Deputy Timmy Dooley

How much?

Ms Mary Uí Chadhain

Approximately 90% of current funding is public funding and 10% comes from commercial income, of which 60% is advertising revenue, such that just short of €2 million comes from advertising. While it is not a large amount it is substantial funding for TG4 particularly in light of its spending power having been reduced by €6 million between 2008 and 2016. It is not impossible that we would give up anything, including €2 million commercial income. Whether the service would be the better for it is a question for somebody else. Financially speaking, we are not in a position to do that.

Chairman

Who would like to respond to the questions regarding the opt-out advertising clause, the Brexit effect of being outside the Single Market?

Ms Breda O'Keeffe

Everybody is claiming that Brexit will impact on their business. TG4 has a seen a real impact on its commercial revenue, particularly in the second half of this year. In terms of how it is impacting us, practically over 55% of our commercial income comes from television advertising. Almost 50% of our top 20 advertisers are UK based, including Unilever, Proctor and Gamble, P&G etc. When it comes to their bottom lines and financial constraints, which have been impacted by Brexit, they are pulling back on marketing. The other impact is a practical one in that sterling buys fewer euro.

The UK companies will continue to invest the same amount in sterling in marketing. To answer the question directly, we are seeing a marked difference in commercial revenue in the second half of the year than in the first. That will feed into the financials for the year.

I endorse what Senator Tim Lombard said. He hopes the proceeds from any disposal of land in Donnybrook would not be used to plug RTE's finances but would be used for capital investment purposes. I agree and would go so far as to say it would be reckless if that was actually to happen. That makes the case for an increase in public funding or looking again at the licence fee model to generate additional public funding for us and other broadcasters.

Chairman

There was a query about the fees paid to presenters and how we could get some of the money back from multinationals such as Google and Facebook.

Ms Breda O'Keeffe

On presenter's fees, it has been well publicised that every year we disclose the remuneration of our top talent presenters. We made a public commitment a number of years ago to reduce the fees paid to our top talent. We recognised that they were too high. In the first instance, there is great coverage of this issue, but top talent fees represent less than 1% of our operating costs. We have many other issues about which to be worried. Earlier this year we released figures that showed that top talent fees were more than 40% lower than in 2008. That exceeds the public commitment we made. We operate in a commercial environment and generate commercial revenue and the talents of our presenters help us to deliver commercial revenue which is very important to us. If one were to look at a top ten talents across Ireland, we reckon five of them would not be at RTE but with other commercial broadcasters. We are operating in a competitive environment.

Mr. Pádhraic Ó Ciardha

Ba mhaith liom é seo a rá go han-sciobtha i nGaeilge agus i mBéarla. Má tá aon amhras ar aon duine faoi luach chraoltóireacht na seirbhíse poiblí, ba cheart dóibh labhairt nó éisteacht le duine atá ina chónaí thar sáile. Anybody who doubts the value of public service broadcasting only has to listen to the opinions of family, relations, colleagues and friends who live abroad to learn what public service broadcasting means to them as they listen to the radio and watch television, as Gaeilge agus as Béarla, daily. Tuigeann siad sin an tábhacht atá leis. Sílim go bhfuil sé an-tábhachtach go dtuigfeadh na finnéithe an tábhacht a leagan an pobal nó an diaspora sin atá ina gcónaí thar sáile ar an rud iontach atáimid ag déanamh. We are good at it and should continue to improve rather than become afraid.

Chairman

On behalf of the joint committee, I thank all of the delegates for coming. It has been a very informative session. We hope to engage with the delegates in a more public forum. In the new year the committee will look at how it should engage with the public on the funding model for public service broadcasting. I propose that the committee publish the submissions received for this meeting. Is that agreed? Agreed.

The joint committee adjourned at 8.05 p.m. until 5 p.m. on Tuesday, 17 January 2017.