Fine-tuning radio finances

THE FRIDAY INTERVEW:Clare Duignan, managing director of RTÉ Radio

INSIDE HER slightly dated office in RTÉ’s Radio Centre at the back of the Montrose complex, Clare Duignan has a weary look. It might have something to do with the fact that, as managing director of RTÉ Radio, she is charged with finding ways of shoring up its commercial income while slashing costs and reducing the staff headcount.

She has also been to the fore of the relaunch this week of 2fm, which has given up on the teenage market and decided to go for a more mature listenership, poaching Dave Fanning back from Radio One in the process.

It all adds up to long days, back-to-back meetings and much number crunching.

She is cautious about being too specific about financial figures, above and beyond what was in RTÉ’s latest annual report, but gives an outline of the steep decline in radio advertising revenue so far this year.

“It’s been around 30 per cent, depending on the particular month,” says Duignan.

In 2008, RTÉ’s commercial revenue from radio amounted to €45.3 million, while its costs were €75.2 million. The gap was bridged by a licence-fee subvention.

A 30 per cent decline in advertising revenue this year would leave a €13 million hole to be filled, which is why RTÉ has been scrambling to trim its overheads.

Duignan says “several millions” have already been shaved off non-payroll costs but, with 80 per cent of its expenses relating to its people, you don’t need to be a genius to figure out that the 479-strong workforce at RTÉ Radio will have to be reduced, even allowing for a pay cut introduced last month.

“There is room for us to reduce our numbers somewhat; that’s why we’re offering this early retirement package,” she says.

The situation isn’t helped by the fact that RTÉ Radio now has a statutory obligation to commission programmes from the independent sector.

“We’ll be rolling that out later this year and into next year. If we’re spending money on independent commissions, that’s money we’ll have to take from inhouse production.”

For now, Duignan hopes enough people will step forward for the early retirement and career-break schemes to avoid compulsory redundancies.

“I would really hope that we won’t get to that stage, but I just couldn’t rule it [compulsory redundancies] out because we simply have to find a way of getting our costs down,” she says.

“We have a finite amount of money coming in to the organisation and that’s the money we have to operate. Nobody is going to come along and bail us out.”

There won’t be too many tears shed by Duignan’s commercial rivals, who will point to the €200 million in licence fees that RTÉ received last year. RTÉ Radio received €30.7 million in 2008.

Of this, €10.7 million was used to fund Raidió na Gaeltachta, the Irish-language station with a “very small” listenership. Does this represent value for money?

“It’s a relatively high cost for what is a niche service, but it’s an important part of what we do,” Duignan counters. “You might as well ask the same question about the part of the licence fee that goes to subvent the performing groups, for example.

“It’s an important part of what RTÉ contributes to Ireland’s cultural life. It’s hugely valued.”

It’s not all bad news for RTÉ Radio. Radio One and 2fm are still the two most listened to stations in Ireland and the top 10 radio shows on air are all produced from Montrose. That said, Duignan is determined to address the slide of recent years in 2fm’s audience.

Its percentage audience share has declined by one-quarter from 15.2 per cent in 2004 to 10.9 per cent currently.

2fm has also lost market share among teenagers, as youth music stations like Spin, iRadio and Beat have struck a chord with the younger audience.

Duignan has decided to reposition the station away from its traditional 15- to 34-year-old focus towards the 25 to 44 age bracket. RTÉ’s new digital stations will now chase the teenage market.

“The station [2fm] was targeting the teenage market, but there was a misalignment between who the station was targeting, and the talent [the presenters] and the content that it was offering,” she says.

“That said, some of those people are icons of Irish broadcasting and many of them are hugely popular, but we need to have them on a service where their popularity is a hit with the audience that the station is targeting.”

Did she consider rebranding the station? “Not at all, 2fm is one of the strongest brands in the country and we are very lucky to have it.”

2fm head John Clarke this week stepped down after 11 years in the role and RTÉ is holding an internal competition to find a successor. Is Clarke’s departure a result of 2fm’s poor showing?

“Not at all,” Duignan says firmly. “John has been in the job for 11 years . . . he felt he wanted to pass the baton to someone else.

“He’d been thinking about it for quite a while. His contract is up in 2010 and he’s decided this is the right time to step down.”

Given that it does not perform a public-service function and receives no licence-fee subvention, some would argue that 2fm should be privatised.

But this is not a view shared by Duignan, especially as 2fm generates revenue of about €20 million a year.

“The money that comes in from 2fm is money that goes to support things in the radio offering that don’t generate sufficient commercial income or don’t generate any commercial income,” she says.

Hailing from Co Monaghan, Duignan is an RTÉ veteran of 32 years. On graduating from UCD, she had a short stint in the Department of Finance before joining RTÉ as a radio producer in 1977.

It was a time before commercial radio here, and there was no independent television sector.

“There was nowhere really to go unless you were going to go off to the UK and try it make it over there,” she recalls.

Duignan spent three years in radio before moving over to television. By the age of 30 she had made it on to the management ladder as head of feature programming, before working her way up to the role of director of television programmes in 2003.

Duignan switched back to radio in February this year and is now a member of the executive management team, reporting to RTÉ director general Cathal Goan.

Duignan says she “absolutely loved” her TV role, so why move back to radio?

“An ambition to keep moving,” she says, “and an absolute love of radio. I was brought up around radio and remember sitting around the big Bush radio at home.”

Given that she lived close to the Border, BBC Radio was a significant influence, and Duignan recalls her mother listening to The Archers. She also says she is a "Radio One person at heart" and a "news and current affairs junkie".

“I always dip in to Gerry Ryan every day to hear what he has to say,” she adds. “I love Lyric FM . . . At stressful times of the day, I just put Lyric on to get that little gap.”

Does she listen to the competition? She says Ray D’Arcy on Today FM is someone she likes to keep an eye on, and she “would scan across the drivetime offerings, again to try and keep up with what the competition is doing”.

D’Arcy’s popular morning show used to be the only non-RTÉ radio programme ranked in the top 10 and he is undoubtedly one of Today FM’s big draws. Would Duignan like to poach him back?

“We probably can’t afford Ray D’Arcy,” she says with a grin. “I think we have a lot of talented people inhouse already on our books. In terms of Ray, I’ve been a fan and worked with Ray over the years, but really wouldn’t like to pre-empt what the new person [head of 2fm] will want to do.”

ON THE RECORD:

Name: Clare Duignan

Job title:Managing director, RTÉ Radio

Why she is in the news:Has refocused 2fm towards an older audience

Age: 53

Family: Married to Eugene Doran with three young adult children

Home: Dún Laoghaire

Hobbies: Gardening, reading and travelling

Something you might expect: "I'm a news and current affairs junkie. I'm a fire hazard, with a pile of weekend newspaper supplements by my bed."

Something that might surprise:Was an originator of the late 1970s to early 1980s Women Todayprogramme with Marian Finucane, Nuala O'Faolain and Nell McCafferty, which tackled subjects such as abortion, lesbianism, drug abuse and adoption.