No light at end of tunnel after disastrous year for national broadcaster
ANALYSIS:The broadcaster’s commercial revenue fell by €8 million to €167 million and is now at 2003 levels. In addition, licence fee income has been eroded by about €18 million as a result of the Government’s decisions relating to the funding of Irish-language channel TG4 and increases to the percentage that goes to the Sound and Vision Fund for independent productions.
Then there was the Fr Kevin Reynolds defamation case and the presidential election tweetgate involving Seán Gallagher.
Radio station 2fm is also in big trouble, losing the battle with commercial radio for those who prefer a lighter mix of music and talk. The station, which receives nothing from the licence fee, recorded a deficit of €5.4 million last year, a 67 per cent rise on 2010. It has yet to successfully replace Gerry Ryan since his death in 2010.
Few would envy RTÉ director general Noel Curran the task of guiding the broadcaster to breakeven by next year.
“I have committed that RTÉ will break even in 2013 and we will,” Curran stated bravely in his director general’s review.
In addition to the day-to-day trading woes faced by RTÉ, it needs to make a substantial investment in its Montrose complex to keep pace with the fast-moving changes in digital broadcasting. This at a time when its cash resources are being depleted and replaced by borrowings and it is in dispute with Dublin City Council over planning for the Donnybrook site.
All of this would make an ideal topic for Pat Kenny’s Frontline programme, were it not conflicted.
Of course, RTÉ is not alone in this. Virtually all media companies in Ireland have been hammered in the recession. The bleak macroeconomic picture offers little hope of an increase in advertising revenue in the near future.
It’s a matter of surviving the storm until the sun shines on our economy again.
RTÉ plans to reduce its cost base by €25 million, which will involve yet more voluntary redundancies and chunky pay cuts being imposed on its top stars.
RTÉ has already stripped out €86 million or 20 per cent of its operating cost base over the past three years. There is only so far that you can cut without seriously damaging the organisation.
Some would argue, notably TV3, that RTÉ has made a rod for its own back by selling advertising below cost for years via convoluted discount schemes with big corporates.
Research commissioned by TV3 from UK consultant Enders showed that, in 2011, TV advertising in Ireland was 35 per cent cheaper than the average in western Europe. This seems like a very large gap.
RTÉ TV advertising has reduced by 40 per cent since its peak in 2007. This is a startling statistic, especially at a time when audiences have been strong and it has produced some excellent programming. The decline in 2011 TV advertising income was €6.3 million.
Curran has taken steps to address this situation by strengthening the broadcaster’s commercial team, but RTÉ will probably need a marked turnaround in the performance of the economy for it to begin to grow its advertising revenue in a meaningful way. Unfortunately, predicting when that day might arrive has become as challenging as forecasting the weather.