RTÉ and the licence fee issue: What does the future hold for the broadcaster?
The Broadcasting Authority of Ireland said despite having the most watched TV stations, most listened-to radio and most-read websites, RTÉ's finances are in such a bad shape that things cannot continue as they are indefinitely. Picture: Andres Poveda
The Irish public won’t know what it’s got, until it’s gone.
And what it has currently got in its public service media is one of the last platforms able to challenge “the deception, the propaganda and the disinformation” that are being used to try and undermine society and democracy.
This is the gist of the closing remarks from RTÉ chair Moya Doherty in the broadcaster’s annual report, which was published this week.
It opens a report which, albeit records a surplus of €2.4m for RTÉ, still has a large spectre looming over it.
And that is the spectre of how we fund it in the future.
That was one of the specific asks made by the Government of the Future of Media Commission, on how the national broadcaster is funded in the future. For many years, it has been well publicised how precarious RTÉ’s financial situation is amid scrutiny on how it spends public funds.
The long-awaited publication of the commission’s report came last week, almost a year after the report was submitted to Government.
The need for the Future of Media Commission report cannot be overstated, and not just for RTÉ. The media landscape has irrevocably changed in the last two decades, traditional revenue streams have collapsed and all players — big and small — have had to adapt to try to survive and thrive.
And other media outlets cannot rely on public funding to deliver public service journalism.
Earlier this year, a damning report compiled for the Broadcasting Authority of Ireland put it in stark terms for RTÉ. Despite having the most watched TV stations, most listened-to radio and most-read websites, its finances are in such a bad shape that things cannot continue as they are indefinitely.
It said: “Following years of under-delivery on the recommended increases in public funding, and with persistent pressures on the commercial front owing to structural factors beyond RTÉ’s direct control, the funding gap continues to fuel deficits that are by definition unsustainable.
"There is next to no possibility of funding RTÉ solely via public sources and therefore no chance of obviating RTÉ’s need to pursue a hybrid public-commercial revenue model."
The Future of Media Commission also had a look at RTÉ’s financial situation, and said it “looked beyond the simplistic proposition that if only everyone who should own a TV licence purchased one, all RTÉ’s financial problems would be resolved”. (It is important to note that TG4 also benefits from the licence fee).
It said: “RTÉ’s recurring deficits are symptomatic of a more profound challenge, which can be seen in the interplay between its inherently volatile and unpredictable annual income, its high fixed operating costs, its demanding public service obligations and the increasingly urgent need for capital investment to mitigate and reverse the impact of chronic underinvestment.”
Reducing licence fee evasion would not necessarily fix all these issues overnight.
It recommended scrapping the licence fee altogether, and replacing it directly with exchequer funding, with safeguards in place to ensure editorial independence, transparency and value for the taxpayer while strengthening the public service function of media in Ireland.
Such targeted increased investment “should be accompanied by measures to increase accountability and ensure value for money”. In the case of RTÉ, this should mean it achieves the cost savings promised through to 2024 and grows its commercial income.
The commission’s report emphasises how important it is to have a strong public service media to combat the threats of misinformation and disinformation, which can have a “damaging effect on the quality, reliability and plurality of information that many in the public are receiving”.
The chair of that Future of Media Commission was Professor Brian MacCraith.
While he did not give much much away prior to the report’s publication, he did speak about his view on the value of quality, reliable journalism in Ireland when speaking at the launch of the Press Council’s annual report last month.
Prof MacCraith said societal wellbeing and “democracy itself” relied on a strong media that acts in public service.
He cited the January 6, 2021, storming of the US Capitol building and the willingness of so many people in the US to believe the presidential election had been “stolen” in a nation with such “polarised media”.
Avoiding such a situation in Ireland would be preferable, and it needs a strong, sustainable public service media to do it.
The Government was also talking a big game in the value it places on the media and why its future should be safeguarded in Ireland when it published the report.
Tánaiste Leo Varadkar said: “A bedrock of our democracy, public service broadcasting has a remit to ensure that no one voice should dominate the debate, and that a plurality of views is always represented. It strives — and often achieves — high standards of independence and balance. I believe this report will help to ensure that it has a future.”
As the player with the biggest funding sources, RTÉ obviously has a central part within that future going forward. In its News & Current Affairs division alone, it employs more than 300 people.
How we fund public service media into the future is not only an issue in Ireland. Similar conversations are happening in many other countries.
Under the Tories in Britain, Channel 4 is facing privatisation despite fierce opposition to the plans. Created under Margaret Thatcher’s premiership in the 1980s, it is entirely funded through advertising.
According to culture secretary Nadine Dorries, privatisation would “release Channel 4 from the outdated shackles of public ownership”. This is contested, including by the broadcaster itself.
The BBC, on the other hand, is also facing an uncertain future.
Scrapping the licence fee is very much on the agenda for the Conservatives, which says the fee will be scrapped by 2028. Where that would leave the BBC — which gets roughly £4bn a year in licence fee payments — is uncertain.
Last week, prime ministerial candidate Rishi Sunak also suggested scrapping the licence fee.
In a curiously similar set of timing, a major report was published this week on the future funding of the BBC. This came from the House of Commons communications and digital committee.
Some of what it said bears similarities to what is being said in Ireland.
“The existing licence fee has several benefits but also drawbacks,” it said. “The link to a television set looks increasingly outdated. Its regressive nature means that regularly raising the fee to the levels the BBC requires will hit the poorest hardest.
“A model-based fully on subscription or advertising would not work. Nor would a BBC funded wholly by government grants.”
According to the statistics, the BBC suffers much less from licence fee evasion than RTÉ. In Ireland, it is estimated about 15% of households which should pay the tax do not. In the UK, this is just 7.25%.
It is also in single figures in Germany, Austria and Italy, according to a report from the European Broadcasting Union. Again, as the Future of Media Commission highlighted, it is not just fare evasion that is contributing to the financial situation at RTÉ. But it is still millions in the difference to its books every year.
While 19 countries in Europe operate a licence fee, 31 use taxation as the main source of public service media funding. And, of the 19 licence fee countries, Ireland is just one of five that still applies the traditional criteria that limits liability to pay to households with a radio or TV.
In Germany and Switzerland, meanwhile, there is a “broadcasting charge” which is a device-independent charge levied on households and businesses.
It is clear there are a number of ways to go forward. But while the solutions will appear different depending on what country it is, Ireland now faces the choice for its own path.
In first launching the Future of Media Commission in 2020, the Taoiseach said he looked forward to receiving its recommendations.
“We need to examine how public service objectives can be funded in a way that is sustainable, ensures independent editorial oversight and delivers value for money to the public,” Micheál Martin said.
Two years on, it is the recommendation that is not being taken that was of particular note.
The Government has now said it has accepted and will implement 49 of the 50 recommendations in the report. While those should all be closely watched as to how they are delivered, the stand-out decision was to not scrap the licence fee as recommended by the commission.
Mr Martin said abolishing the licence fee and having RTÉ fully funded by the taxpayer represented a “danger to democracy” and was “not realistic”.
“I've been around the government table when there's been significant cuts in previous times. So when you have every single department looking to hold on to its funding, it gets very rough. And the temptation for any future government could be to significantly cut so the media fund or whatever if it didn't like the particular orientation media was taking at a given time,” he added.
This is what they are going to do instead, according to a Government statement: “Work will commence immediately on setting out the legislative and administrative changes required to ensure the TV licence system is more equitable, relevant and sustainable.
“The reform of the TV licence will aim to align with changing viewing habits, tackle evasion, streamline the collection and payment regime, and thereby provide a more sustainable level of funding for the sector. The new funding arrangements will be accompanied by increased transparency, accountability and oversight, with an expanded role for Coimisiún na Meán and NewERA.”
So we are getting a review after the recommendation contained in the long-awaited report was not accepted.
In true Irish Government style, we are going to get another review on what to do about the TV licence.
It was clear there had been a sense that the Future of Media Commission’s say on it could be the definitive word.
That report has now come. But the future of the licence fee, worth almost €200m to RTÉ last year, remains unclear.
This latest group looking at TV licence reform is due to report back before the end of the year.
With warnings that the state of finances at RTÉ are “unsustainable”, clarity on this is needed sooner rather than later from the broadcaster’s perspective.
Seamus Dooley, Irish secretary of the National Union of Journalists, said people “deserve better than ‘the RTÉ and TG4 issue will be looked at in November’”.
Whatever your opinion on RTÉ and its output, the assessment of its own board is that “time is running out”.
Ms Doherty said in RTÉ’s annual report that future generations “will not forgive us for letting these assets slip through our fingers”.
Will it come to that? It is far from clear.
What is clear is that the future of the national broadcaster — which gets over half of its money from public funding — will rely heavily on the next path chosen on the licence fee.
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