RTÉ: TV licence system ‘not fit for purpose’

For the second year in a row, RTÉ has managed to post a modest pre-tax surplus — but the national broadcaster has admitted it is concerned at the rising number of homes which do not have a television set.

RTÉ’s annual report for 2014 showed total revenue of €328.2m, made up of €149.6m in commercial revenue and €178.6m from the licence fee.

However, while commercial revenue was up by 3% compared to 2013, licence revenue was down by 2%. Overall, RTÉ reported a pre-tax surplus of €0.9m down from €1.1m in 2013.

RTÉ said the rise in commercial revenue last year was driven by growth in television and digital advertising and sponsorship, with the 2014 soccer World Cup in particular bolstering sponsorship revenue. It said digital revenues grew by 5% due to increases in digital advertising and sponsorship.

“The growth in commercial revenue in 2014 is a welcome development and augurs well for 2015,” said the broadcaster in its annual report. “But it should be noted that 2014 commercial revenue of €149.6m is still in sharp contrast with — ie almost 40% below — 2008 levels of €240m.

RTÉ’s TV licence revenue was down by almost €4m in 2014 compared to 2013. It said that was as a “direct” result of the €5m reduction in the amount of public funding received by way of “free” television licences from the Department of Social Protection.

“Taken in context, licence fee income received by RTÉ through public funding has declined by some €22m, ie 11%, over the last five years since 2009, as a result of a number of deductions made from the available pool of funding,” it said.

The station expressed concern about the “evasion” levels — those who do not pay their television licences.

It said that had last been calculated at 15% (in 2013) of chargeable domestic households and business premises — equivalent to €30m in lost revenue to the sector — and said this was high compared to other European countries.

“Evasion levels in Ireland are over three times higher than those experienced in the UK and Germany and collection costs are more than double compared to other European counterparts,” it said.

A further concern was the increase in the number of homes that do not have a television set. RTÉ said that had been growing slowly but steadily over recent years and, according to the Nielsen Establishment Survey, currently stands at 110,000 or 6.5% of all homes.

“As media consumption continues to evolve, the television licence fee will reflect less and less how people consume public service content and is the main reason the mechanism is being reviewed and changed in other countries such as Finland, Germany and Iceland,” it said.

RTÉ director general Noel Curran said that, while there is little the Government can do to alter the market dynamics affecting media organisations, “the level of public funding RTÉ receives to fulfil its role is the responsibility of Government”.

“There is little doubt now that the current television licence fee system is not fit for purpose,” he said.

“As media consumption continues to evolve and RTÉ continues to enhance and grow its digital services, the television licence fee will reflect less and less how people consume public service content. Reform of the television licence fee system, by decoupling it from televisions, improving and consolidating the licence fee database and driving down the costs of collection, among other things, has the potential to yield substantial additional revenue for investment in public service media, without increasing the burden at all on individuals or on households.”