Joint Oireachtas Committee on Jobs, Enterprise and Innovation

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1 Joint Oireachtas Committee on Jobs, Enterprise and Innovation Job creation, innovation and balanced economic development in the creative economy 28 th April 2015 Opening Statement by Brian Dalton, Managing Director Corporate Development, RTÉ Thank you chairman for the invitation to appear before this Committee today. We hope our submission is useful as you consider the potential for job creation, innovation and balanced economic development in the creative sector. If a greater level of financial stability was restored, RTÉ believes that there is very significant potential for job creation of the order of over 500 new jobs. We would see the bulk of this job creation taking place in the independent production sector. Over the last five years RTÉ alone has shed nearly 500 jobs and the Independent Sector has lost more than 300 jobs. RTÉ s total revenue has dropped by more than 100 million-we receive about 180 million in licence fee revenue. Today we commission about 40 million of programming from the independent sector. This equates to about 45% of our commissioning spend- when we exclude News and Sports. In the past we spent over 70 million a year in the independent sector. 1

2 Ireland is a small open economy and the Irish media ecosystem is exceptionally open-advertising the world over is a key element for funding of the Creative Economy. The advertising market in 2006 was estimated to be valued at 1 Billion and today it is valued at just over 700 million. The Irish Creative Sector depends hugely on advertising to fund content which in turn creates employment. Ireland uniquely had a very sharp contraction in advertising over the last six years (RTÉ advertising dropped by 40%) and has led to a very significant contraction in employment of the order of 20%. Online advertising now accounts for just over 20% of the market; television accounts for 25% of the market; Print just over 21%; radio 13%; sponsorship 13% and other such as outdoor and cinema 8%. The number of UK television channels now selling Irish advertising has increased steadily between 2004 and 2011; while 2012 represented a marked increase. There are now 36 UK channels operating in the Irish advertising market-most produce little or no Irish programming and so their employment benefit is minimal. Supporting Irish content production is central to creating jobs in the creative audiovisual sector. RTÉ s revenue is now about 328 million and we are the single biggest producer and commissioner of Irish programming. To put this in context and how we support job creation- RTÉ Drama in any one year engages between actors, while a number of Irish Actors are based in London, who come back regularly for work-the majority of actors that work on RTÉ productions are based in Ireland. As the Irish advertising market becomes more fragmented RTÉ s share of that market will decline-our reach is still very high with over 94% of the Irish People using one or more of our services in any given week. Over 4380 hours of home-produced television programming was delivered by RTÉ in partnership 2

3 with the independent sector in 2014-Drama had a particularly strong year with Amber; the Fall and Love/Hate. RTÉ broadcast all of the top twenty most watched programmes in Ireland in As the advertising market becomes more fragmented it is imperative Irish content is fully exploited commercially and valued economically. The market for the distribution of high quality television content in Ireland is changing radically. New platform operators are entering the market, bundling TV services with broadband and phone services in an effort to own the home. Having been an issue of much debate and dispute in the US for the last number of years, both ITV and Channel 4 have in the last year put retransmission fees firmly on the agenda in Britain. For those that don t know, the retransmission fee debate is about the flow of payments between broadcasters and TV platforms. In September last year, ITV chief executive Adam Crozier said that the majority of viewing on pay-tv platforms is PSB programming yet ITV, whether as producer or broadcaster investing in creating that content, doesn t receive any payment. He went on to say that the impact of this wholly outdated regime is that UK public service broadcasters are forced to subsidise major pay-tv platforms. Later in September the UK Culture Secretary told a Royal Television Society conference in London that the UK Government would shortly begin a review into whether TV platforms (satellite, cable, etc) should pay for carrying the main free-to-air channels. 3

4 David Abrahams of Channel 4, speaking at the Edinburgh Festival, said that distribution or retransmission fees could be worth as much as 200m a year to the main free-to-air channels, because they accounted for bulk TV viewing on Pay TV platforms. RTÉ has been considering this issue in an Irish context for some time. Over the past year RTÉ has conducted detailed research to understand much more clearly who creates value for whom in the relationship between Irish terrestrial broadcasters and the major Pay-TV platforms operating in Ireland. Working with us, Mediatique, a UK based consultancy firm have completed a comprehensive report on the value to Pay TV operators in Ireland of having access to Irish free-to-air services. Much like in Britain, the analysis is telling us that the financial benefits of the relationship are currently completely imbalanced in favour of the Pay-TV operators. Unlike the US or the UK, in Ireland this imbalance causes a particular difficulty because it results in huge amounts of potential investment for Irish programming and content leaving the country. This is directly effecting potential jobs growth in the Irish audiovisual sector. We believe it is absolutely in the interests of Irish broadcasters, the broader Irish television production sector, and most importantly Irish audiences that the Government look closely at the legislation that underpins the current imbalance. We have been engaging with the Department of Communications on this issue over the past number of months. 4

5 Given that RTÉ is set up as a dual-funded public service broadcaster with a range of statutory responsibilities, the level of public funding it receives to fulfill its role is crucial. That is a responsibility of Government. It is clear from any analysis or international benchmarking that the current Television Licence fee system is no longer fit for purpose. Just last week the Minister for Communications, Energy and Natural Resources said that he will shortly be bringing legislation to Government to help tackle licence fee evasion, which is currently estimated to exceed 15%, with the loss of over 25 million to broadcasters each year. We welcome this move towards reform of the current system. The Minister rightly said that this is a matter of fairness. The vast majority of Irish citizens are making their contribution to the costs of quality public service broadcasting by paying their licence fee. But a significant minority continues to enjoy the benefits while expecting others to pay their share. But it is also depriving the audiovisual sector of much needed investment. Successful reform of the licence fee system has the potential to act as a significant stimulus to a sector that has suffered a collapse in investment over the past five years crucially without increasing the burden at all on individuals or on households. RTÉ s contribution to the creative sector is of course much more than just television. Our radio services and orchestras also play a vital role in the creative economy. Large numbers are employed in these areas- the RTÉ 5

6 orchestras employ more than 120 full-time musicians and based on the performance this number is augmented making RTÉ the biggest employer of musicians in the country. Through RTÉ s Supporting the Arts Scheme, each year RTÉ supports many local and national arts events throughout Ireland through media partnerships and widespread cultural content across RTÉ services. In addition, RTÉ supports events by offering promotional air-time on RTÉ Radio and Television. This airtime has proven vital in allowing events to grow and develop from year to year. Equally, every year, new and exciting arts projects are established and look to RTÉ to help with getting the word out. RTÉ is committed to working in partnership with the independent sector and third level institutions to maximise the sum total of our collective creative possibilities by creating a campus without walls that becomes a hub for creative content generation and new start ups that can develop scale to compete internationally. We are currently working on proposals for our site in Donnybrook and have begun to deepen our creative partnerships so that this vision can be fulfilled. The creative sector is sizeable-however its value is not adequately expressed in hard numbers alone. Irish creative expression in word, film and art has significantly enhanced the reputation of Ireland. Since the 1960s RTÉ has contributed to the growth of the wider sector. We compete with the best funded broadcasters in the world-and as the national broadcaster strive for the highest standards in journalism and creative production. Our journalists, technical and creative staff have moved into new ventures either supporting growth in the commercial sector or providing necessary skill and expertise in the international production and film industry that locate in Ireland. 6

7 It is important that Ireland protects and nurtures its creative capacity in a digital world that is global. Our creative expression and output reinforces our identity as a people and captures the richness of Irish lives and voices from all communities that live on this Island. It also has a very valuable economic impact in terms of the indigenous economy and export potential. The Irish market has changed fundamentally since 2012 and policy support is required to ensure that the creative sector can thrive in a fiercely competitive and international ecosystem that is oblivious to the protection and nurturing of what is unique and precious. Thank you Chairman. 7

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