Is RTÉ really in a worse position than any other media company?

The launch last week of a four-year programme of voluntary redundancies at RTÉ follows years of controversy over governance and finances at the broadcaster that stretch back well before the Ryan Tubridy payments affair of 2023.

In fact, one of the implicit defences offered by board and management in Montrose for the unacceptable practices which came to light then was the intolerable pressure placed on RTÉ by successive governments’ failure to reform the licence fee and, by implication, stump up more cash.

The argument, made repeatedly but unsuccessfully by former chair Moya Doherty and former director general Dee Forbes, was that public service broadcasting faced an existential challenge sparked by rapid changes in the media landscape. This was deepened for RTÉ, we were told, by the failure to address the specific problems surrounding the increasingly archaic and inefficient licence collection system, and the failure to increase that charge in line with inflation.

This was all laid out in the report on the future of media commissioned by the last government, which recommended replacing the licence fee with a direct subvention from the Exchequer. Despite support for that proposal from then media minister Catherine Martin, it was rejected by her government colleagues, who opted instead for a hybrid model guaranteeing €725 million in government funding over the next three years, regardless of how much comes in via the licence fee.

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All this is water under the bridge now. Last week’s announcement marks the implementation of a strategy that includes the loss of 400 jobs, limiting presenter salaries, and closing the RTÉ One +1 and RTÉ2 +1 channels.

Director general Kevin Bakhurst says he is “thankful for the multiannual government funding which will enable us to plan ahead and to achieve our vision to evolve RTÉ”. The process has begun for voluntary layoffs, and there is expected to be no shortage of applicants.

But there is one relevant question which the future of media report failed to address, but which explains some of the suspicion with which RTÉ is viewed in government circles.

Is RTÉ really in a worse position than any other media company in Ireland, and if so, why? Every media organisation in the country has seen its business model turned upside down by digital and social media. In fact, the much-maligned licence fee, however unsatisfactory, has still given RTÉ a cushion that private sector sompetitors simply don’t have.

In the world of traditional linear broadcasting, for example, the likes of Virgin, Newstalk and Today FM, along with a host of regional radio stations, have had to contend with a precipitous decline in revenues due to the migration of their sole source of income – advertising – to search and social media. They would probably have been thrilled to have a financial buffer like the licence fee that hadn’t changed since 2008.

In the same vein, newspapers have seen their two traditional income streams, advertising and print sales, plummet. That has forced them to innovate by building new audiences of paying digital subscribers, as well as implementing painful rounds of job cuts and restructuring.

Both private sector broadcasters and newspapers could be forgiven for raising a sceptical eyebrow at some of the special pleading that has been coming out of RTÉ over the last decade. The same might be true of independent audiovisual producers, who will argue persuasively that they deliver better value for money than in-house productions do.

The truth is that many of those who have regular interactions with RTÉ, from politicians to independent contractors to direct competitors, believe it has been badly managed over many years and that it still has problems with low productivity and inefficiencies in parts of its operations. To understand whether that is fair or not, it is instructive to take a historical view.

A quarter of a century ago, in 2000, RTE’s overall annual revenue was IRE£197.65 million (adjusting for inflation, a little over €400 million today). Back then, it reported that it had 2,199 staff.

In his foreword to the annual report, then chairman Farrel Corcoran expressed concern about over-reliance on commercial revenues. “Great uncertainty persists about how to pay for the standard of broadcasting we expect. Some 67 per cent of RTE’s revenue is earned commercial income: the balance comes from the television licence fee,” Corcoran wrote. At least that’s not a concern any more: commercial revenues are now significantly outweighed by state subsidies.

By 2008, revenues stood at €440 million but then plummeted in the wake of the financial crash, standing at €330 million in 2013. Over the last decade they’ve hovered around the same figure, which taking account of inflation represents an overall decline. Income was €347.7 million in 2022 and €344.0 million in 2023.

Nobody would dispute that these are pretty bleak numbers. But nor would anyone in the media business find them particularly startling. The financial crash wasn’t the only existential threat to arrive in 2008; the smartphone and Facebook also appeared on the scene. The world changed dramatically and media needed to change accordingly.

It is notable, then, that over the 15-year period between 2008 and 2023, despite a drop of more than €100 million in annual income and a number of voluntary redundancy programmes, staff numbers at RTÉ have continued to hover at just under 1,800. This seems both unsustainable and unjustifiable. It is now belatedly being addressed, but it was very clear from last week’s statement that the Government remains sceptical that the strategy will be fully implemented without strict oversight.

None of this is welcome news for the many talented people who still work in RTÉ and are committed to its future. The unpalatable future they now face is the fruit of years of failure to implement necessary reforms.