RTÉ profit surges to more than €9m

The annual surplus or profit produced by RTÉ has surged to more than €9 million for 2005 on the back of strong advertising revenues and higher ratings, writes Emmet Oliver

The broadcaster, which is dual funded by licence fee and advertising, has submitted its accounts to the Department of Communications in recent weeks. These show its after-tax surplus or profit growing from €6.8 million in 2004 to over €9 million in 2005, a jump of over 30 per cent.

This is in sharp contrast to its financial position of four to five years ago when it struggled to turn a profit and had to instigate a major redundancy programme.

The growth in the number of houses and apartments in the State has also helped the station because every home with a TV set must purchase a licence. Since April 1st 2005 the cost of a TV licence has been €155.

The station's revenue in 2004 was just over €340 million, but this has now increased beyond €360 million. Despite an increase in the number of TV stations in 2005, RTÉ One managed to retain its national market share at 27.8 per cent, although RTÉ 2 lost a small amount of market share.

The latter station underwent a re-branding in 2005 and is no longer called Network 2. RTÉ has used the station's more youth orientated schedule to attract younger viewers, who are in demand among advertisers.

For example, the phenomenal success of Podge and Rodge has boosted RTÉ 2 over recent years. Their new show has achieved an average audience of 383,000 over recent weeks. Desperate Housewives has also helped RTÉ 2 retain a youth audience. Despite these successes RTÉ will not have access to live coverage of the Ryder Cup in 2006 which is going with BSkyB.

The radio and television advertising markets in 2005 were worth over €390 million. RTÉ took a large share of this and also benefited from higher licence fee revenue. The television advertising market alone grew by €50 million in 2005, according to information from the Institute of Advertising Practitioners of Ireland.

As part of a formula agreed with the Government three years ago, RTÉ now gets an inflationary increase each year, although this can be adjusted if it doesn't meet its various programming commitments. This year's final decision on the licence fee has not been announced yet by Minister for Communications Noel Dempsey.

Since it is not a fully fledged public company, RTÉ does not strictly report a profit and its annual report refers to it as a surplus. Director general Cathal Goan has stressed that it does not have a profit-making mandate.