Why does RTÉ say the TV licence fee system is ‘broken’?

Why does RTÉ say that it has been “left with no option” but to make cuts?

RTÉ has cited three reasons why it must “modify” its cost base: declining commercial income, inflationary pressures and “a broken licence fee system”.

The first two are straightforward. RTÉ’s commercial revenues have declined from a 2007 peak of €245.5 million to €150 million in 2018. There are no immediate signs of this sum of almost €100 million returning.

Meanwhile, an expanded array of television competitors, new and old, have the capacity to both outbid RTÉ for important sports rights and spend millions per hour on drama in a manner that RTÉ cannot afford.

What does it mean by a “broken licence fee system”?

RTÉ gets more than half its funding from the television licence fee. It has been increasingly dependent on it as advertising revenues have gone south. But the Republic has a licence fee evasion rate of 13 per cent, which is high by international standards.

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Linking the charge to ownership of a traditional television set has also been regarded as an outmoded concept for about a decade now. At least 10 per cent of Irish households are estimated not to have a TV set, but may use other screens to access RTÉ content. As the population ages, a greater proportion will also become eligible for a free TV licence.

Overall, RTÉ estimates that there’s some €50 million in funding lost to public broadcasting as a result of the Government’s reluctance to reform the system, which only gifts US and UK companies a bigger share of the Irish media market.

Isn’t the Government doing something?

In August, the Minister for Communications Richard Bruton said he would put collection of the television licence fee, currently performed by An Post, out to tender for a five-year contract. This is yet to happen and the process may take up to two years to complete.

An Post is expected to be among the bidders. If it wins the tender it will have “an incentive to invest” in the collection and enforcement system that it apparently didn’t have before, according to the Minister.

The Government has also said that it will develop a “device independent charge” to come into effect after the first five-year contract. It hasn’t specified how this will work because it hasn’t explored this yet. RTÉ and the wider Irish audio-visual production sector argues that this long-fingering will be detrimental to Irish culture.

Will people who only access RTÉ through the RTÉ Player eventually have to pay the licence fee or similar charge?

RTÉ would like that. Hundreds of thousands of people recently streamed Rugby World Cup coverage through the RTÉ Player. They weren't liable to pay for any of it. RTÉ did have to pay for the rights, however. As more viewing shifts to digital platforms, this position becomes unsustainable.

Since 2016, UK users of the BBC’s iPlayer have had to pay its television licence fee after its government closed a loophole with minimum fuss.

Here, it is not yet compulsory to sign into the RTÉ Player to use it. RTÉ says now that it wants to make sign-in mandatory. But only the Government and its chosen collection agent can require the Player-only audience to pay a charge. RTÉ has no powers of its own in this area.

Will the cost of a television licence fee go up in the meantime?

There’s no sign of any political willingness to increase the €160 fee, despite high rates of inflation in the television industry. The last rise was in 2008, when it went up by €2. The Government has suggested it would be unfair to add to the burden on compliant licence fee taxpayers while evasion rates remain high.