Difficult trading times ahead as players grapple with costs and revenues
MEDIA & MARKETING:It was a year without any major implosions, but plenty of shrinkage. Newspapers literally reduced in size, while hundreds of staff departed the deficit-burdened RTÉ. Scandal and kerfuffle distracted from the state of flux at the business end of the media.
The advertising revenues once auto-collected by “legacy” media groups continued to disseminate into digital coffers of no fixed abode – an erosion of indigenous media power likely to continue in 2013.
Around media boardroom tables and in editorial chairs, new blood was everywhere, while between rivals there was the usual bad blood. But the media industry also united against the common enemy of commercial indifference. In November, just as chief executives sat down to allocate 2013 marketing budgets, pretty much every media company united to back an advertising campaign designed to promote the power of advertising itself.
Broadcasters exploited new platforms but industry talk come autumn was increasingly downbeat. In November, TV3 was blunt: advertising revenues had been “highly volatile” and, as Christmas approached, the group was “battening down the hatches”.
The subdued trading environment of recent months has been bad for TV3, but potentially even worse for RTÉ. The public service broadcaster’s deficit, swollen by voluntary redundancies, wasn’t looking too pretty in the summer at an estimated €57 million – a final figure is not available.
The worse than anticipated second half of the year for advertising meant director general Noel Curran’s pledge to break even in 2013 was based on shifting sands.
RTÉ’s restructuring continued. By the end of 2011, it had cut its costs by €91 million compared to 2008 – a 20 per cent fall. After another year of cuts, costs are now 30 per cent lower than in 2008. Some 420 staff, or almost 20 per cent of the workforce, have left over that time.
Digitalformats
RTÉ’s five-year strategy is likely to be a case of further slimming. A UTV Media trading statement in November estimated revenues in the radio market were down 8 per cent, although thanks in part to the performance of Dublin stations FM104 and Q102, its own radio interests were doing better despite “further revenue declines anticipated”.
Radio was at least still pulling in listeners. In the print sector, readers proved trickier to keep satisfied. The mismatch between audience preferences for digital formats and newspaper groups’ main revenue sources became clear. And by the end of 2012, executives had concluded that it was no longer desirable or even possible to maintain free access to online content.
