In preparing this report, PwC have relied primarily upon ...2.3 Analysis of RTÉ Expenditures, 2011 2.3.1 Overview Table 2.3 shows a breakdown of RTÉ operating expenditures in 2011

In preparing this report, PwC have relied primarily upon secondary data from RTÉ. In all cases, PwC has identified the sources of

information relied upon, and makes no representation in relation to independently auditing or verifying the accuracy or completeness of

this information. We understand that the report or sections of the report will be made publically available. In no event however, shall we

assumed any responsibility to any third party to whom this document is disclosed or otherwise made available.

Executive Summary.....................................................................................................5

Chapter 1. Introduction ...............................................................................................9

Chapter 2. RTÉ Economic and Social Impact .......................................................... 11

Chapter 3. RTÉ Competitive Landscape................................................................. 34

Chapter 4. RTÉ Effectiveness.................................................................................. 48

Chapter 5. RTÉ Cost Management ......................................................................... 64

Table of Contents

Executive Summary

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Chapter 1. Introduction

9

Chapter 1. Introduction

This report was commissioned to PwC by RTÉ in December 2012.

The purpose of the report is three-fold:

to present an independent assessment of the contribution of RTÉ to the

national economy in 2011;

to evaluate the wider socio-economic benefits which stem from RTÉ

expenditures in the Irish economy;

to prepare a statistical compendium on the effectiveness of RTÉ as a public

service broadcaster.

The PwC research approach incorporated the following:

review and analysis of RTÉ’s financial and operating data;

review and analysis of RTÉ-commissioned research;

review and analysis of third-party research materials;

compilation of original research materials;

selected case studies of RTÉ-supported firms and sectors.

The remainder of this report comprises four additional chapters, the next of which

describes the economic and wider socio-economic benefits which derived from RTÉ

expenditures in the Irish economy in 2011.

Chapters 3 through 5 present a compendium of statistics on RTÉ’s effectiveness and

efficiency as a public service broadcaster (PSB).

The PwC team would like to extend its sincere thanks to all individuals who

contributed to the preparation of this study.

10

Chapter 2. RTÉ Economic andSocial Impact

Chapter 2. RTÉ Economic and

Social Impact

2.1 Introduction

This chapter presents an overview of the economic and socio

resulted from RTÉ expenditu

The benefits described in this chapter exclude the widely recognised benefits which

derive fro

Rather, the focus here is on those socio

those of RTÉ’s primary function. These are highlighted in red in Figure 2.1.

The methodology used for estimating RTÉ economic impact is shown in Figure 2.2.


Social Impact

1 Introduction

This chapter presents an overview of the economic and socio

resulted from RTÉ expenditures in the Irish economy in 2011


derive from the existence of an effective Public Service Broadcaster (PSB).

Rather, the focus here is on those socio-economic benefits which are incidental to


Figure 2.1 RTÉ Socio-Economic Benefits


11


This chapter presents an overview of the economic and socio-economic benefits which

res in the Irish economy in 2011.


m the existence of an effective Public Service Broadcaster (PSB).

economic benefits which are incidental to


mic Benefits


Research steps are as follows:

This research approach is followed in Sections 2.2 through 2.4 of this chapter.

The wider socio

expenditures in the Irish economy are the subje

Figure 2.2 Overview of PwC Economic Impact Methodology

Research steps are as follows:

determine total RTÉ payroll and non-payroll spend in 2011

reduce the total payroll spend by all direct deductions (e.g. taxes, pension),

estimated savings and foreign expenditures (e.g. holidays) to arrive at an

estimate of resultant consumer spend in the Irish economy;

reduce the non-payroll spend by the value of all payments made to

international or non-indigenous suppliers;

determine the sectoral allocation of all RTÉ-generated expenditures in the

Irish economy, i.e. payroll and non-payroll;

apply sector-based multipliers to arrive at an estimate of the ful

impact of RTÉ in 2011.


The wider socio-economic benefits which derive from the pattern of RTÉ

expenditures in the Irish economy are the subject of Section 2.5.

12

Figure 2.2 Overview of PwC Economic Impact Methodology

ayroll spend in 2011;

reduce the total payroll spend by all direct deductions (e.g. taxes, pension),

estimated savings and foreign expenditures (e.g. holidays) to arrive at an

estimate of resultant consumer spend in the Irish economy;

oll spend by the value of all payments made to

generated expenditures in the

an estimate of the full economic


economic benefits which derive from the pattern of RTÉ

ct of Section 2.5.

13

2.2 RTÉ Incomes & Expenditures, 2007 to2011

Table 2.1 shows RTÉ funding levels and sources for the period 2007 to 2011.

Table 2.1 RTÉ Funding Levels & Sources (€m), 2007 to 2011

Funding Source 2007 2008 2009 2010 2011

Licence Fee €196 €201 €200 €196 €184

Commercial (TV) €172 €163 €112 €114 €107

Commercial (Radio) €44 €45 €34 €32 €29

Other Commercial €30 €32 €29 €30 €31

Total €441 €441 €375 €372 €351

Source: RTÉ Annual Report and Group Financial Statements, 2007 – 2011

Key points of note are as follows:

RTÉ is funded through a combination of commercial and licence fee incomes;

total RTÉ funding in 2011 was €351m, down from €441m in 2007;

this reflects a sharp decline in the national advertising market;

RTÉ reliance on licence fee incomes has grown as a direct result.

The RTÉ mixed-funding model is not unique in Europe (see Table 2.2).

Table 2.2 RTÉ Funding (€m) in International PSB Perspective1

PSB RTÉ BBC ORF VRT RTBF

Country RoI UK Austria Belgium Belgium

Licence Fee Revenue €184 €3,978 €580 €0 €0

Government Funding €0 €0 €1 €303 €212

Advertising Revenue €124 €0 €216 €36 €64

Other Income €43 €1,676 €174 €114 €19

Total Income €351 €5,654 €971 €453 €295

Population Size (m) 4.7 62.6 8.4 11.0

PSB Funding per Capita €39 €64 €69 €47

Unit Licence Fee Costs €160 €165 €264 NA NA

Source: RTÉ Annual Report & Group Financial Statement, 2011, EBU Report, CSO, World Bank

1 It should be noted that figures for ORF, VRT and RTBF are for 2010. 2011 figures are not yet published.The PSBs in the table above have been chosen for a number of reasons: BBC (UK) is one of the leadingPSBs in the world and is in direct competition with RTÉ for television audience share. ORF (Austria), VRT(Belgium) and RBFT (Belgium) face similar challenges to RTÉ in respect of proximity to large same-language territories.

Total RTÉ funding fell

by over 20% between

2007 and 2011. This

reflects a sharp decline

in the national

advertising market.

14

The recently published European Broadcasting Report stated that in 2010:

EBU members were, in aggregate, reliant on licence fee income for 59% of

their funding with direct Exchequer funding accounting for a further 10%;

Ireland’s level of reliance on public funding is low by European standards.

Romania and Portugal are the only countries where public broadcaster

income is more reliant on commercial revenues to augment licence fee or

other public revenue;

for the majority of countries where licence fee is the main source of income,

the licence fee as a % of total income is between 70% and 90%;

the average licence fee per household across 12 Western European and

Nordic/ Scandinavian markets that operate a licence fee system was €216;

last year just 16% of EBU members’ funding was from advertising;

the proportion of RTÉ’s income derived specifically from advertising was

more than double the EBU average and almost four times that of Western

Europe markets that also operate a licence fee system;

there is a general trend towards greater dependency on direct Exchequer

support and away from direct advertising income;

comparing licence fee funding to similar sized populations (4-6m) in Western

Europe and Nordic / Scandinavian markets, the licence fee amount per

capita in Ireland is lowest at just €39 per head of population, while in other

comparable markets this ranges from €53 to €118.

In 2011, RTÉ spent

€296m in the Irish

economy. This equates

to 84% of total RTÉ

expenditures.

15

2.3 Analysis of RTÉ Expenditures, 2011

2.3.1 Overview

Table 2.3 shows a breakdown of RTÉ operating expenditures in 2011.

Table 2.3 High-Level Breakdown of RTÉ Operating Expenditure (€m), 2011

Total Expenditure (including VAT) 2011

RTÉ Payroll €153

Non-Payroll €200

Total €353

Source: RTÉ Annual Report and Group Financial Statements, 2011

RTÉ’s payroll accounted for 43% of total operating costs in 2011.

Table 2.4 shows the proportion of RTÉ payroll and non-payroll spend in 2011 which

accrued to Ireland-based individuals or suppliers.

Table 2.4 Estimated RTÉ Spend in the Irish Economy, 2011

Total Spend(including VAT)

Payroll Non-Payroll Total

€ million

National €152 €144 €296

Non-National €1 €56 €57

Total €153 €200 €353

% of Total

National 99% 72% 84%

Non-National 1% 28% 16%

Total 100% 100% 100%

Source: RTÉ Annual Report and Group Financial Statements, 2011; RTÉ Supplier Listings 2011

In 2011, RTÉ spent €296m (inclusive of all taxes) in the Irish economy. This equates

to 84% of total RTÉ expenditures in this year. This is a higher proportion than was

spent in 2010 in the Irish economy (79%).

The value of RTÉ’s spend in the Irish economy in 2011 equated to the full value of the

RTÉ licence fee (€184m) plus close to 70% of all commercial incomes (€167m).

The sectoral distribution of RTÉ-generated spend in the Irish economy is described in

the remainder of this section.

16

2.3.2 National Economy Expenditures of RTÉ Employees

Table 2.5 shows the assumed relationship between RTÉ’s payroll spend and the

consumer expenditures of RTÉ personnel in the Irish economy.

Table 2.5 Assumed Consumer Expenditures of RTÉ Employees, 2011

Total Spend €m % of Gross Payroll Source

Gross Payroll Costs€1662

(€152+€14)100% RTÉ

All Payroll Deductions -€75 45% RTÉ

Net Payroll €91 55% RTÉ

Savings -€5 3% CSO, 2012

Available for Consumption €86 52% Derived

Expenditure outside the State -€5 3% CSO, 2012

Available for Domestic Consumption €82 49% Derived

Source: RTÉ Information, CSO, National Income & Expenditure Annual Results 2011 (Sep 2012)

It should be noted that:

payroll reductions include:

o employer costs i.e. PRSI, pension and life assurance costs; and

o employee costs i.e. PAYE, pension and universal social charge (USC).

In 2011, it is estimated that the 1,934 full-time equivalent (FTE) employees of RTÉ,

the independent contractors (whose taxes are organised by RTÉ) and employees who

received redundancy packages spent €82m in the Irish economy. The assumed

sectoral distribution of this spend, based on national averages for households in

Ireland in 2011, is shown in Table 2.6.

2 It should be noted that approximately €4m of costs included under non-payroll costs in Table 2.4 are for

contractors whose tax/PRSI return are organised by RTÉ (classified under ‘other personnel related costs

(including contractors)’ in the Annual Report 2011). Therefore, this group has been included in Table 2.5.

In 2011, RTÉ also spent approximately €8m on restructuring and redundancies costs and a further €2m on

other payroll related accruals. The gross national payroll cost in 2011 was approximately €166m.

17

Table 2.6 Estimated RTÉ Employee Ireland Expenditures by Sector, 2011

Expenditure by Sector % of Total Expenditure (€m)

Food, beverage & tobacco 20.7% 16.9

Clothing & footwear 4.0% 3.2

Housing (rents & imputed rent, repairs &decoration) 16.7% 13.6

Fuel & power 3.8% 3.1

Household equipment & operation 4.9% 4.0

Transport & communications 15.8% 12.9

Recreation, education & entertainment 10.8% 8.8

Miscellaneous goods & services 23.4% 19.1

Total 100% 81.6

Source: CSO, National Income & Expenditure Annual Results 2011 (Sep 2012)

The sectoral composition of RTÉ-derived national economy expenditures has an

important bearing on the size of the full-economy impact (see Section 2.4).

2.3.3 Sectoral Profile of RTÉ Non-Payroll National Economy Spend, 2011

The national versus non-national and sectoral distribution of RTÉ non-payroll spend

in 2011 was analysed using a combination of:

a detailed listing of RTÉ’s largest suppliers by contract value in 2011,

disaggregated by location and sector; and

a detailed analysis of RTÉ’s management accounts.

High-level findings from the former are shown in Table 2.7.

Table 2.7 Geographic Profile of RTÉ’s Top 70 Suppliers 2011

Spend(excluding VAT)

No. of Suppliers Contract Value Average Value

€m

National 47 €71.5 €1.5

Non-National 23 €47.0 €2.0

Total 70 €118.4 €1.7

% of Total

National 67% 6o% NA

Non-National 33% 40% NA

Total 100% 100% NA

Source: RTÉ Information, 2011

Table 2.7 shows that indigenous companies account for 67% of the largest suppliers to

RTÉ and account for close to 6o% of associated non-payroll spend.

18

Total RTÉ non-payroll spend in the Irish economy in 2011 is estimated at €144.5m.

The estimated non recoverable VAT on the Irish expenditure was €10.5m, equating to

a non-payroll spend of €134m. A further €4m has been deducted for independent

contractors that were allowed for in the gross national payroll costs in Table 2.5. The

estimated non-payroll spend in the economy was €130m.

The estimated sectoral distribution of this spend is shown in Table 2.8.

Table 2.8 Sectoral Composition of RTÉ Non-Payroll Spend in Ireland, 2011

Sector % of Total

Contractor Costs 21%

Commissioned Programmes 28%

Outside Broadcasts 5%

Electricity 2%

Music licences 5%

Insurances 1%

Other 38%

Total 100%

Source: RTÉ Annual Report and Group Financial Statements, 2011; RTÉ Information, 2011

In summary, therefore, it is estimated that RTÉ employees spent €82 million in the

economy, while RTÉ staff spent €130 million on the sourcing of goods and services in

the Irish economy, culminating in a total spend of €212 million.

19

2.4 RTÉ Full-Economy Impacts, 2011

2.4.1 Methodology Explained

The full-economy impact of any organisation is a function of two factors, namely:

the value of national economy expenditures; and

the sectoral composition of this spend.

With regard to the former, RTÉ paid an estimated €296m (Table 2.4) to Ireland-

based employees and suppliers in 2011.

Adjusting this amount to remove all taxes and savings, the value of RTÉ-supported

expenditures in the Irish economy in 2011 is estimated at €212 m3.

The sectoral composition of demand is material to the extent that spend in sectors

with a low import content (e.g. services) have a more substantial impact on the

national economy than do expenditures in sectors with a high import content.

The sectoral distribution of RTÉ’s national spend was described in Section 2.3.

The full-economy impacts of a € increase in expenditure in a defined sector are

measured at three levels which describe the progression of the € spend through the

economy (see Table 2.9).

Table 2.9 Multipliers Explained

Impact Description Example

DirectThe additional value-added generated byimmediate beneficiaries of the additionalIrish economy expenditures of RTÉ.

Impact of RTÉ employees spending moneyon food retailers in the Merrion Centre.

IndirectThe additional value-added of suppliersto the direct beneficiaries of theadditional spend.

Impact of this additional spend at theMerrion Centre on suppliers, e.g. Gleniskyoghurts.

Induced

The value-added which derives from theadditional economy expenditures ofemployees of RTÉ suppliers and theirsub-suppliers.

Income received by retailers as a result ofspending of a Tyrone Productions companyemployee.

The most commonly applied form of multipliers are output and employment.

The former measures the contribution of an additional € in expenditure to national

output, which is essentially a measure of the full value-added of the economy.

The latter measures the impact on full-time equivalent jobs.

3 This figure is equal to €296 (Table 2.4) less employer and employees costs including social welfare, PAYE,pension contributions etc, employees’ savings and VAT on non-payroll expenditure.

Reflecting the fact that

total RTÉ operating

spend in Ireland

includes taxes, among

others, the value of

RTÉ-supported

expenditures in the

Irish economy in 2011

which accrued directly

to individuals or

suppliers is estimated

at €211m

20

Multipliers are unique to individual economies, reflecting (among other factors) the

fact that the import content of different sectors of activity will vary significantly

depending on the resource base of the economy.

There is no composite set of economic multipliers for the Irish economy. For this

reason, multipliers prepared in respect of the Scottish economy in 2007 (published in

2010) were relied on in the preparation of this analysis4.

The comparable nature of the Scottish and Irish economies means that this approach,

while a compromise, is deemed appropriate. Key findings are now presented.

2.4.2 RTÉ Full-Economy Impact, 2010

Applying these multipliers, the full-economy impact of RTÉ in 2010 is shown below.

Table 2.10 Full-Economy Impacts of RTÉ Ireland Spend, 2011

Total

Additional Ireland Spend (€m) (after tax, VAT etc.) €2125

RTÉ Supported Employment (FTEs)

Direct & Indirect 2,998

Induced 540

Total 3,538

National Output (€m)

Direct & Indirect €328

Induced €56

Total, €384

Source: PwC Analysis

Key findings are as follows:

in 2011, RTÉ supported 3,538 FTE jobs in the Irish economy, of which 1,934

were directly employed by RTE;

in the same year, the broadcaster contributed €384m to national output, i.e.

the value-added by RTÉ to the Irish economy;

this compares with licence fee revenues of €184m.

4: See http://www.scotland.gov.uk/Topics/Statistics/Browse/Economy/Input-Output/Mulitipliers fordetails. Type II multipliers were used. In reviewing these, it should be borne in mind that the employmentimpacts are stated in terms of an increase of ST£1 mn in spend. The impacts above were converted intoEuros in order to work out the economic impact of RTÉ on the Irish economy.5 Note: in relation to national spend: (€166m (Gross Payroll Spend) – €84m (payroll deductions + savings+ expenditure outside the state) = €82m) + (€144m (Gross National Non-Payroll Spend) –non-recoverable VAT (c. €10m) = €134m – €4m = Additional Ireland Spend €130m.

21

In addition to the foregoing, RTÉ and its employees made a sizeable contribution to

the national tax take in 2011 (see Table 2.11).

Table 2.11 National Tax Take from RTÉ, 2011

Tax Type €m Value % of Total

PRSI €15 19%

PAYE & USC (RTÉ Employees) €36 46%

VAT (recoverable & non-recoverable) €24 31%

Other €3 4%

Total €78 100%

Source: RTÉ Information, 2010

Table 2.11 shows that RTÉ and its employees contributed more than €78m to the

national tax take in 2011.

In addition, a levy of €1.75m was paid to fund the operations of the national regulator

of broadcasting services in Ireland, i.e. the BAI.

The gross economic contribution of RTÉ to the national economy is considered in the

context of the licence fee incomes received in Figure 2.3.

Figure 2.3 RTÉ Economic Contribution in Licence Fee Perspective


€184

€384

€80

Licence Fee Income National Output Tax and BAI Contribution

22

2.4.3 Additionality of RTÉ Contribution

Economic benefits are considered additional where it can be determined that the

benefit would not have been realised if the entity under review, i.e. RTÉ, did not exist.

The economic benefits described in the foregoing section derive primarily from the

expenditure by RTÉ of funding received from the following sources:

licence fee incomes; and

commercial revenues.

With regard to the licence fee income, it is reasonable to assume that the benefits

which derive from RTÉ’s expenditure of these funds in the Irish economy is limited to

negligible. This reflects the fact that if Irish households were not required to pay the

licence fee, they most likely would spend the money elsewhere in the Irish economy.

While the wide range of socio-economic benefits which stem from the existence of an

effective PSB such as RTÉ would then be lost, the purely economic impact would be

by-and-large unchanged.

This, however, is not the case in respect of commercial incomes which accounted for

€167m of RTÉ’s income in 2011.

In the event that RTÉ did not exist, associated commercial incomes would:

not be incurred in the Irish market, assuming that advertisers are satisfied

with levels of representation among other broadcasters; or

transfer to other Ireland-based broadcasters, with a smaller relative spend in

the Irish economy, reflecting a high reliance on acquired output; or

transfer to international broadcasters offering tailored advertising for the

Irish market, with a small spend in the Irish economy, e.g. Sky; or

transfer to an alternative medium, e.g. print.

23

In view of the foregoing, it is reasonable to assume that at least half of the Irish

economy expenditures which result from RTÉ being in receipt of commercial incomes

would disappear if the broadcaster did not exist.

Assuming further that the proportion of commercial income spent in the Irish

economy is less than for all RTÉ incomes (reflecting a policy of directing licence fee

income towards indigenous production), Table 2.12 shows PwC estimates of the

economic benefits which would not exist in the Irish economy if RTÉ did not exist.

Table 2.12 Additional Economic Contribution of RTÉ, 2011

Tax Type Total ContributionOf which Additional

Contribution

Employment (FTEs) 3,538 673

National Output (€m) €384 €73

RTÉ Licence Fee, 2010 (€m) €184


Table 2.12 shows that RTÉ generated an additional or non-displaced contribution of

approximately €73m (direct, indirect & induced) to the national economy in 2011.

The associated employment sustained is estimated at close to 700 FTEs.

24

2.5 RTÉ Socio-Economic Benefits, 2011

The purpose of this section is to describe the socio-economic benefits which derive

from the unique sectoral distribution of RTÉ spend in the Irish economy, most

notably the high level of support provided by RTÉ to creative industries and

community-based sporting organisations in Ireland6.

An indication of the scale of this support is shown in Figure 2.4.

Figure 2.4 RTÉ Support of Indigenous Creative & Other Sectors (excl. VAT), 2011

Source: RTÉ Information, 2011 & PwC Analysis

In the case of certain creative and sporting sectors of the Irish economy, RTÉ has

provided an important financial impetus which has ensured viability, enabled

international success and / or promoted higher levels of participation.

The associated social and economic benefits are not quantifiable but are no less

potent for this fact. The benefits to individuals and to society at large from the

existence of vibrant arts, sporting and community organisations are indisputable.

6 As stated previously, these are additional to the widely acknowledged social benefits which derive fromthe existence of an effective PSB.* It should be noted that €49m was spent by RTE on independent commission activity as defined by theIndependent Productions Annual Report 2011, published by RTE under the requirement of broadcastingact. 2009. However, this differs from the ‘direct commissioned programme costs’ as per the RTÉ AnnualReport, which reports €45m of costs, of which €36m (exclusive of VAT) was in the Republic of Ireland.They key difference in the figures are the Independent Productions report quotes the amount spent in theyear versus the cost of material transmitted during the year and includes cost of commissioning activities(included in payroll costs).

drfgysert

Providedemployment to

over 400 TV andRadio actors in

2011

Purchased anadditional€64m of

goods & servicesfrom otherindigenoussuppliers

€49m* wasincurred by

independentcommissioning

activity (as definedfor the purposes ofthe IndependnentProduction Annual

Report

Purchased over€31m of work from

indigenousbroadcasting

support servicecompanies/contractors.

25

The important role played by RTÉ in supporting such sectors is evidenced in the

testimonials of impacted individuals, presented in the case studies which follow.

Case Study 1: RTÉ Supporting the Indigenous TV and Film Production Sector

RTÉ use a wide range of Irish Independent Productions Companies. In 2011, RTÉ

spent approximately €36m with indigenous independent production companies.

Three Independent Production Company owners/directors were interviewed in

relation to their views on RTÉ and how RTÉ has suppoRTÉd them financially and

otherwise over the years. Interviews included:

Cathal Gaffney, Chief Executive, Brown Bag Films.

Philip Kampff, Managing Director, Vision Independent Productions (VIP).

John Murray, Managing Director, Crossing The Line Films.

Case Study 2: Promoting National Sport Engagement

In 2011, RTÉ spent just over €48 million on the provision of comprehensive multi-

media sports coverage. Costs of coverage included: sports rights fees, outside

broadcast costs, studio production costs, freelance resources and other production

costs. In addition to the direct benefit from sports rights fees, sporting bodies also

derive considerable benefits from the promotion of their sports on RTÉ media,

particularly television.

The benefit of this exposure has been proven to give increased attendances at live

events which impacts on ticket sales and a greater overall interest in the games. It

should be noted that even though 2011 had major international sports events

including the Rugby World Cup, RTÉ invested €36 million in coverage of Irish sports

i.e. 75% of total amount invested.

Through sports rights fees RTÉ contributes significantly to the income of national

governing bodies of sport (NGBs), including: the GAA, IRFU, FAI, horseracing and

other Irish sports including boxing, golf and athletics.

Two NGBs representatives were interviewed:

John Delaney, Chief Executive, FAI.

Páraic Duffy, Director General GAA.

26

Case Study 3: Sustaining a Vibrant Drama Sector

RTÉ supports a large amount of employment in the creative economy e.g. script

writers, actors, production design staff, set designers etc, both directly e.g. Fair City

and indirectly through commissioning independent productions.

Two well-known Irish actresses were interviewed in relation to their connection with

RTÉ and their views on the importance of RTÉ in maintaining a vibrant drama sector

in Ireland. These were:

Aisling O’Sullivan, Television and Film Actress.

Ger Ryan, Television and Film Actress.

27

28

29

30

31

32

33

Chapter 3. RTÉ CompetitiveLandscape

34

Chapter 3. RTÉ Competitive

Landscape

3.1 Introduction

This chapter describes RTÉ’s competitive landscape.

It comprises five additional sections, the first of which presents an overview of the

RTÉ operating environment. The broadcaster’s performance in the attraction of

advertising revenues is the subject of Section 3.3, with the remainder of the chapter

describing performance in the attraction of viewers, listeners and readers.

3.2 Overview

The competitive environment faced by RTÉ is almost unique in a European context,

reflecting proximity to a much larger same-language territory which is home to one of

the leading PSBs in the world, i.e. the BBC.

In terms of resources, RTÉ is the largest Irish broadcaster (see Table 3.1).

Table 3.1 RTÉ, Irish Competitor Size (2011)

Company Location2011 Revenue

€mLicence Fee /

Public Funded

RTÉ Ireland 351 Partially

TV3 Ireland 54 No

TG4 Ireland 36 Partially

Source: PwC Research / Company Accounts

A true reflection of the intensity of competition in the Irish market, however, requires

consideration of the UK broadcasters with whom RTÉ competes for audience share

(see Table 3.2).

Table 3.2 RTÉ, International Competitor Size (2011)

Company Location2011 Revenue

€mLicence Fee

Funded

RTÉ Ireland 351 Partially

BBC UK 5,654 Fully

ITV UK 2,423 No

Channel 4 UK 1,066 No

Sky* UK 7,471 No

Source: PwC Research / Company Accounts (*Group Revenue for British Sky Broadcasting Group plc)

35

The scale differential between RTÉ and its UK-based competitors is illustrated in

Figure 3.1.

Figure 3.1 RTÉ Revenue (€m) versus Key UK Competitors (2011)

Source: PwC Research / Company Accounts (*Group Revenue for British Sky Broadcasting Group plc)

A small number of other European PSBs face the similar challenge of proximity to a

same-language territory and a much larger competitor PSB, for example:

ORF (Austria) faces competition from ARD and ZDF in Germany; and

RBTF (Wallonia, Belgium) faces competition from France Télévisions and

Radio France in France.

Figure 3.2 below illustrates the revenue for each of these PSBs.

Figure 3.2 Revenues of Selected PSB Competitor Sets, €m (2011)

Source: RTÉ Information (*2010 figures)

The scale differential between these PSBs, however, is not comparable to the Irish

situation. As evidenced in Figure 3.3, ARD and ZDF’s combined revenue is almost

nine times greater than ORF. This compares with 16 in the case of the BBC and RTÉ.

7,471

5,654

2,423

1,066

351

Sky BBC ITV Channel 4 RTÉ

8,432

992

3,137

301

5,654

351

ARD/ ZDF

ORF

FranceTélévisions/

Radio France*

RTBF

BBC

RTÉ

Au

stri

aB

elg

ium

Irel

an

d

36

Figure 3.3 PSB Revenues relative to Competitors (2011)

Source: RTÉ Information / PwC Analysis (*2010 figures)

8.5

10.4

16.1

ARD / ZDF(relative to

ORF)

FT / RF*(relative to

RTBF)

BBC(relative to

RTÉ)

37

RTÉ competition for audience and /or commercial revenue in Ireland, extends well beyond the traditional broadcast media of television and radio (see Table 3.3)

Table 3.3 RTÉ Media Competitors

Parent Company Local Brand NameGroup Revenue

2011 €mIrish Revenue

2011 €mSample Titles / Stations

RTÉ RTÉ 351 3512 Television Stations (RTÉ One, RTÉ Two); 4 Radio Stations (RTÉ Radio 1, RTÉ 2fm, RTÉ lyric fm, RTÉ Raidio na

Gaeltachta)

BBC BBC 5,654 Not disclosed Television Stations (e.g. BBC One, BBC Two, BBC Three, BBC Four, BBC News, CBeebies, etc)

ITV plc ITV 2,423 Not disclosed Television Stations (e.g. ITV, ITV1, ITV2, ITV3, ITV4, CITV, etc)

Channel 4 Channel 4 1,066 Not disclosed Televisions Stations (e.g. Channel 4, E4, Film4, More4, etc)

British Sky Broadcasting

Group plcSky 7,471 Not disclosed

Satellite Broadcasting Company. Paid For Television Stations (e.g. Sky News, Sky Sports, Sky Movies, Sky 1, Sky

Atlantic, Sky Living, etc)

Daily Mail & General Trust

plc

Associated

Newspapers2,253 19 2 National Titles (Irish Daily Mail, Irish Mail on Sunday); 1 Regional Title (Metro Herald)

Independent News & Media INM 558 363

5 National Titles (Irish Independent, Sunday Independent, Sunday World, Evening Herald, The Star)

13 Regional Titles (e.g. People Newspaper Group, The Corkman, The Argus, etc); Websites: independent.ie,

yourlocal.ie, etc

Irish Times IT 90 90 1 National Title (Irish Times); 1 Regional Title (Metro Herald); Websites: irishtimes.com

Thomas Crosbie Holdings

LtdTCH 72 72

2National Titles (Irish Examiner, Sunday Business Post); 12 Regional Titles (e.g. Echo Newspapers, Roscommon

Herald, Waterford News & Star, etc); 4 Radio Stations (WLR FM, Beat 102 103, RedFM, MidWest Radio); Websites:

breakingnews.ie, recruitireland.com, etc

News Corporation News International 23,654 Not Disclosed 3 National Titles (The Times, The Sunday Times, The Sun)

Trinity Mirror plc Mirror 846 Not Disclosed 3 National Titles (Irish Daily Mirror, Irish Sunday Mirror, Irish People)

Northern & Shell Network

Ltd

Express

Newspapers808 Not Disclosed 3 National Titles (Daily Express, Daily Express Sunday, The Irish Daily Star)

Communicorp Group Ltd Communicorp 66 36 6 Radio Stations (98FM, NewsTalk, SPIN 103.8, Today FM, SPIN South West, Phantom 105.2FM)

Facebook Facebook Ireland Ltd Not Disclosed 229 Social Networking Site (www. facebook.com)

GoogleGoogle Ireland Ltd.

(HQ Europe & Asia Pacific)20,762 10,900 Search Engine (www.google.ie)

Microsoft Microsoft 49,527 13,367 Online Service (MSN); Search Engine (www.bing.ie)

Source: PwC Research / Company Accounts

The presence and scale of online publishing interests in Ireland is noteworthy.

38

3.3 RTÉ Advertising Market Share

The value of national advertising spend has declined significantly in recent years,

reflecting the consumer spending impacts of the recession (see Figure 3.4).

Figure 3.4 Irish Advertising Market Size, €m

Source: PwC Entertainment & Media Outlook: 2011-2016

The rate of decline in Irish advertising spend has been more severe than elsewhere

in Europe (see Table 3.4).

For example, advertising spend in Ireland declined by 20% between 2007 and

2011, compared with a 1% fall in the UK and a 28% increase in Austria.

Table 3.4 Advertising Market Size, Selected European Markets (2007 & 2011)

2007€m

2011€m

% Change2007-11

Ireland 1,044 831 -20%

United Kingdom 16,172 15,957 -1%

Austria 1,495 1,918 28%

Belgium 2,691 3,052 13%

France 10,503 10,861 3%

Germany 16,172 15,957 -1%


In Ireland, as elsewhere, there has been a continued shift in advertising revenues

to internet advertising (see Figure 3.5).

1,044989

923867

831

2007 2008 2009 2010 2011

39

Figure 3.5 Irish Advertising Spend by Medium, % of Market (2007 &2011)


Between 2007 and 2011, spend on Internet advertising in Ireland grew from €69m

to €132m – delivering a share of 12% in 2011.

Advertising revenues at RTÉ fell sharply between 2007 and 2011 (see Figure 3.6).

Figure 3.6 RTÉ Advertising Revenues, €m (2007 to 2011)

Source: RTÉ Annual Report & Group Financial Statements 2011/2010/2009 /2008/2007

The rate of decline in RTÉ advertising incomes in this period (-39%) exceeded the

rate of decline of total advertising spend in Ireland (-20%).

Between 2007 and 2011, RTÉ advertising incomes fell by €79m.

58%49%

7%12%

12%13%

24% 26%

2007 2011

Other Internet Radio TV Advertising

202.4195.6

131.7 132.6123.8

2007 2008 2009 2010 2011

40

3.4 RTÉ TV Audience Share

In spite of intense local competition from national and international broadcasters,

RTÉ enjoys the largest audience share of any television broadcaster in the State.

This is evidenced in Figure 3.7.

Figure 3.7 TV Audience Share in Ireland (%) (2011)

Source: TAM Ireland Ltd / Nielsen Television Audience Measurement, National Individuals 4+ (All DayChannel Shares), Live Data. Note: other BBC TV channels are not broken out in the Irish TAM system

This performance is placed in the context of the BBC in Figure 3.8, which shows

that RTÉ has almost as high a national TV share in Ireland with two channels as

the BBC enjoys in the UK with nine channels.

Figure 3.8 TV Audience Share in UK (%) (2011)

Source: Broadcaster Audience Research Board (BARB), Trends in Television Viewing 2011, All Individuals

The strong position held by RTÉ in terms of national audience share is further

evidenced in its share of the 10 most popular television programmes in 2011. All of

the top 10 programmes watched in 2011 were on RTÉ. (see Table 3.5).

32.4

13.7

6.75.1

3.3 3.3

RTE(2 stations)

TV3(2 stations)

BBC(2 stations)

Sky(7 stations)

Channel 4(3 stations)

UTV(1 station)

33.2

23.1

11.3

BBC(9 stations,

BBC RedButton*16)

ITV(11 stations)

Channel 4(9 stations)

In spite of intense

national and

international

competition, RTE has

almost as high a

national TV share in

Ireland as the BBC

enjoys in the UK.

41

Table 3.5 Top 10 TV Programmes in Ireland (2011)

Programme Channel Average Audience(000’s)

1 The Late Late Toy Show RTÉ One 1,529

2 The Eurovision Song Contest RTÉ One 1,182

3 The Sunday Game Live (Senior Football Final) RTÉ Two 1,085

4 The Frontline Leaders Debate RTÉ One 965

5 Mrs. Brown’s Boys Christmas Special RTÉ One 952

6 Mrs. Brown’s Boys RTÉ One 924

7 The Late Late Show RTÉ One 886

8 The Sunday Game Live (Senior Hurling Final) RTÉ Two 847

9 The Rose of Tralee RTÉ One 829

10 RTÉ News: Nine O’Clock RTÉ One 813

Source: RTÉ Annual Report 2011

RTÉ’s share of the Top 10 programmes compares favourably with that of the BBC

in the case of the UK (see Table 3.6).

Table 3.6 Top 10 TV Programmes in the UK (2011)

Programme Channel Average Audience(m)

1 The Royal Wedding BBC1 13.59

2 The X Factor Results ITV1 13.46

3 Strictly Come Dancing BBC1 13.34

4 The X Factor ITV1 12.92

5 Britain’s Got Talent Result ITV1 12.63

6 Coronation Street ITV1 12.56

7 I’m a Celebrity – Get Me Out of Here! ITV1 12.47

8 Britain’s Got Talent ITV1 12.22

9 Downton Abbey ITV1 12.15

10Eastenders BBC1 11.42

Source: Broadcaster Audience Research Board (BARB), All Individuals

Table 3.6 shows that the profile of the Top 10 programmes in the UK is skewed

more heavily towards “entertainment” than in Ireland.

42

3.5 RTÉ Radio Audience Market Share

RTÉ also has a very high radio listenership in Ireland.

RTÉ radio stations reached 34% of Irish radio listeners in 2011 (see Figure 3.9).

RTÉ Radio 1 accounting for 25%. It should be noted the reach for RTÉ’s

commercial stations is not the straight addition of the reach for each of the

individual RTÉ stations. Listeners frequently listen to more than one station.”

Figure 3.9 RTÉ Radio Reach, Weekdays

Source: JNLR / Ipsos MRBI 2007/4, 2011/4, (Adults 15+)

RTÉ Radio 1 grew its reach between 2007 and 2011. Newstalk performed similarly,

suggesting a greater appetite for news-based programming in recent years.

An analysis of daytime radio audience shares is shown in Figure 3.10. The trends

are broadly similar as for audience reach.

Figure 3.10 RTÉ Radio Daytime Share (7am-7pm), Weekdays

Source: JNLR / Ipsos MRBI 2007/4, 2011/4 (Adults 15+)

50%

38%

23%

17%

3%

16%

6%

47%

34%

25%

11%

4%

13%9%

Any National RTÉCommercial

Stations

RTÉ Radio 1 RTÉ 2fm RTÉ lyric fm Today FM NewsTalk

2007 2011

47.6%

21.6%

12.8%

1.7%

12.5%

3.4%

52.4%

23.4%

7.5%

1.9%

9.5%4.7%

Any National RTÉ Radio 1 RTÉ 2fm RTÉ lyric fm Today FM NewsTalk

2007 2011

RTÉ Radio 1 is the most

popular radio station in

Ireland, reaching a quarter

of the national adult

population daily.

43

RTÉ Radio hosts 18 of the 20 most popular Irish radio programmes, attractingbetween 171,000 and 446,000 adults per programme (see Table 3.7).

Table 3.7 All Week National Radio Programmes, 2011

Rank Programme StationAdults 15 +

Reach (000s)

1 Morning Ireland RTÉ Radio 1 446

2 Liveline with Joe Duffy RTÉ Radio 1 414

3 The Marian Finucane Show (Sat) RTÉ Radio 1 365

4 The Marian Finucane Show (Sun) RTÉ Radio 1 349

5 News at One RTÉ Radio 1 345

6 Today with Pat Kenny RTÉ Radio 1 329

7 The John Murray Show RTÉ Radio 1 327

8 The Business RTÉ Radio 1 326

9 Playback RTÉ Radio 1 292

10 Miriam Meets.... RTÉ Radio 1 272

11 Drivetime RTÉ Radio 1 243

12 Mooney RTÉ Radio 1 238

13 Ray D'Arcy Show Today FM 234

14 News/Papers/Sunday Miscellany RTÉ Radio 1 233

15News/Green Tea/Saturday with Charlie

BirdRTÉ Radio 1 232

16 The Ronan Collins Show RTÉ Radio 1 227

17 This Week RTÉ Radio 1 208

18 News/Papers/CountryWide RTÉ Radio 1 201

19 Tubridy RTÉ 2fm 176

20 Ian Dempsey Breakfast Show Today FM 171Source: JNLR / Ipsos MRBI 2011/4, National Stations

The BBC has a higher share of radio audiences in the UK (see Figure 3.11).

However, BBC has 57 radio stations across the UK, compared with four for RTÉ.

Figure 3.11 BBC Radio Share, Adults 15+ (Q3 2012)

Source: Radio Joint Audience Research (RAJAR), Quarterly Summary of Radio Listening, Period ending 16th

September 2012

46.1%

8.1%

12.8%

30.6%

BBCNetwork Radio

(12 stations)

BBCLocal / Regional

(45 stations)

NationalCommercial(28 stations)

LocalCommercial

44

3.6 RTÉ Online Audience Appeal

RTÉ is also performing strongly in the attraction and retention of audiences in

non-traditional broadcast media.

Average page impressions at RTÉ.ie have increased sixfold since 2006 - reaching

an average of 130m page impressions per month in 2012 (See Figure 3.12)7.

Figure 3.12 RTÉ.ie Average Page Impressions per Month (millions)

Source: RTÉ Information

The website attracts more than 400,000 unique users daily (see Figure 3.13).

Figure 3.13 Daily Unique Browsers of RTÉ.ie8

Source: RTÉ Information / ABC Electronic, The Island of Ireland Report, June 2012

This is significantly higher than any other leading domestic websites. Even relative

to global digital media players, RTÉ.ie performs strongly in the national online

sector (see Figure 3.14).

7 (*)2012 figures are the average up to and including October 2012.8 Figures include all traffic, from international as well as Irish sources. Audit period differs by website.

130.1

110.6

80.6

58.7

45

35.7

20.5

2012*

2011

2010

2009

2008

2007

2006

415,808

289,129246,216 234,974

187,886

104,041 88,44445,490 38,641 38,641

935

RTÉ.ie is the leading

factual based website in

Ireland, attracting more

than 400,000 unique users

daily.

Figure

Source: comScore, November

The launch of the News Now app

increase in

The News Now application delivered 426 mill

downloaded 454,000 times in 2011.

Figure

Source: RTÉ

Figure 3.15 shows that of the 139

2012, 55

January 201

page impressions

Radio A

0

20

40

60

80

100

120

140

160

RT

E.i

eP

age

Imp

ress

ion

s(m

)

Figure 3.14 RTÉ.ie % Reach of Irish Internet Users (November

Source: comScore, November 2012, Adults 15 + (Total Unique Visitors 2,545,000

The launch of the News Now application in January 2010 saw a

increase in the consumption of RTÉ.ie content on mobile devices

The News Now application delivered 426 million page impression

downloaded 454,000 times in 2011.

Figure 3.15 Mobile Page Impressions as a % of Total Page Impressions forRTÉ.ie (201o to 2012)

Source: RTÉ Information (January 2010– November 2012)

igure 3.15 shows that of the 139 million page impressions

55% were delivered via RTÉ’s mobile services– a significant increase since

ary 2010, when mobile represented 3% of RTÉ.ie page impressions

page impressions include m.RTÉ.ie, RTÉ News Now App, RTÉ Player App, RTÉ

Radio App amongst other impressions.

93.7

79.773.0 72.1

57.0 54.8 52.4

Mobile Services www.rte.ie

45

of Irish Internet Users (November 2012)

(Total Unique Visitors 2,545,000)

in January 2010 saw a significant

of RTÉ.ie content on mobile devices (see Figure 3.15).

ion page impressions and was

as a % of Total Page Impressions for

million page impressions recorded in August

a significant increase since

.ie page impressions. Total

.ie, RTÉ News Now App, RTÉ Player App, RTÉ

48.6

37.332.2

0%

10%

20%

30%

40%

50%

60%

70%

RT

E.i

eM

ob

ile

Sh

are

(%)

of

RT

E.i

eP

age

Imp

ress

ion

s

Mobile Share (%)

46

RTÉ Player is the most popular online TV service offered by an Irish broadcaster.

It has continued to grow in popularity since its launch in April 2009, with monthly

unique visitors reaching over 530,000 in November 2012 (see Figure 3.16).

Figure 3.16 RTÉ Player Monthly Unique Visitors (000s)

Source: comScore 2013

0

100

200

300

400

500

600

RTÉ Player Channel4 4oDTV3.IE Sky GoITV.COM BBC IPlayer

47

Chapter 4. RTÉ Effectiveness

48

Chapter 4. RTÉ Effectiveness

4.1 Introduction

This section presents a series of indicators that highlight RTÉ’s effectiveness in the

attainment of certain key public service objectives.

RTÉ’s mission is noteworthy in this regard:

to nurture and reflect the cultural and regional diversity of all of the people of

Ireland;

to provide distinctive programming and services of the highest quality and

ambition, with the emphasis on home production;

to inform the Irish public by delivering the best comprehensive independent

news service possible; and

to enable national participation in all major events.

The remainder of this chapter comprises four sections, as follows:

the next section presents a snapshot of public perceptions of RTÉ;

Section 4.3 presents indicators of RTÉ’s effectiveness in promoting a sense of

national identity;

indicators of RTÉ effectiveness in promoting and enabling national debate are

the subject of Section 4.4; and

Section 4.5 presents indicators of RTÉ effectiveness in enabling participation

in national events.

These are now discussed in turn.

49

4.2 Public Satisfaction with RTÉ

The Irish population is convinced of the value and importance of public service

broadcasting. The events of recent years, and the critical role played by RTÉ in

informing public debate, appear to have reinforced this conviction.

This is evidenced from a survey conducted by Ipsos MRBI reviewing the Corporate

Reputation of RTÉ (see Figure 4.1) – with 83% of respondents deeming the national

PSB to be very or fairly important for Ireland.

Figure 4.1 Perceived Importance of a PSB such as RTÉ, Adults 15+ (%)9

Source: Ipsos MRBI, RTÉ Corporate Reputation Survey (2009)

Further analysis from the survey, shows that a strong national belief in the

importance of public service broadcasting spans all age cohorts (see Figure 4.2).

Figure 4.2 % of Population agreeing that a PSB is Important, Adults 15+10

Source: Ipsos MRBI, RTÉ Corporate Reputation Survey (2009) (Adults 15+ who answered ‘Very Important’ or‘Fairly Important’)

9 Question: How important is it for you that Ireland has a non-subscription (free to air) Public ServiceBroadcaster such as RTÉ catering for the diverse requirements of the Irish audience?10Question: How important is it for you that Ireland has a non-subscription (free to air) Public ServiceBroadcaster such as RTÉ catering for the diverse requirements of the Irish audience?

49 4955

21 24

28

2003 2006 2009

Very Important Fairly Important

7882 85

89

15-24 yrs 25-44 yrs 45-64 yrs 65+ yrs

RTÉ continues to enjoy the

respect and confidence of the

Irish public.

50

Additional market research conducted by Amárach on behalf of RTÉ, measures the

health of the RTÉ brand.

The results show that the majority of individuals surveyed declared themselves to be

satisfied with the RTÉ brand in 2011/2012, across key services including television,

radio and online (see Figure 4.3).

Figure 4.3 % Satisfied with Key RTÉ Services*

Source: Amárach Research / RTÉ Brand Health Tracker, All Adults 15+ (% Satisfied or Very Satisfied). 2009figures not available for RTÉ Online Services*“Cannot Rate” respondents removed from analysis

Moreover, the Amárach research indicates there is a widespread belief among the

Irish public that RTÉ is trustworthy and provides a high quality service (see Figure

4.4).

Figure 4.4 % of Population Agreeing with RTÉ Statements

Source: Amárach Research / RTÉ Brand Health Tracker, All Adults 15+ (% Agree Strongly / Slightly)

In addition, very high proportions of the population agree that RTÉ has a bright

future, and is an Irish brand they are proud of (see Figure 4.5).

65

7368

71

81

RTÉ TV RTÉ Radio RTÉ Online

Jan - Nov 2009 July 11 - June 2012

7167

70 72

Is trustworthy Is high quality

Jan-Nov 2009 Jul 11 - Jun 2012

51

Figure 4.5 % of Population Agreeing with RTÉ Statements

Source: Amárach Research / RTÉ Brand Health Tracker, All Adults 15+ (% Agree Strongly / Slightly)

Evidence of the high esteem in which RTÉ is held is found in the fact that the general

public turns to RTÉ for information and commentary at times of national crisis (e.g.

severe weather in January 2010) or for key public events (e.g. the visit of Queen

Elizabeth II to Ireland in 2011).

Evidence of this is provided in Section 4.5.

68

8076

69

84

75

Has a bright future Is part of our heritage Is an Irish brand I am proud of

Jan-Nov 2009 Jul 11 - Jun 2012

52

4.3 Promoting a Sense of National Identity

A primary function of any public service broadcaster is to promote a sense of national

identity – the fulfilment of which requires PSBs to provide distinctly national

programming vis-à-vis purely commercial broadcasters.

RTÉ invests heavily in the production and commissioning of indigenous content, with

88% of RTÉ’s television content spend dedicated to indigenous content in 2011 (see

Table 4.1).

Table 4.1 RTÉ Television Spend on Content (2011)

Television Spend€m

% of Total

Indigenous €180 88%

Acquired €25 12%

Total €205 100%

Source: RTÉ Annual Report & Group Financial Statements 2011

RTÉ concentrates indigenous output during peak broadcast hours. As evidenced in

Figure 4.6, indigenous content accounted for 49% of peak broadcast hours on RTÉ

television in 2011.

Figure 4.6 % of RTÉ TV Broadcast Hours that are Indigenous, (2011)


A schedule analysis of RTÉ’s terrestrial competitor in the Irish market indicates the

uniquely indigenous nature of RTÉ’s service offering (see Figure 4.7). This analysis,

conducted by RTÉ, shows that 77% of RTÉ One’s broadcast hours in November 2012,

were first-run indigenous hours.

49%

27%

Peak Hours Total Hours

53

Figure 4.7 % of Peak Broadcast Hours (1st – 30th November 2012)


Of the Top 20 programmes for each broadcaster in Ireland in January – October,

2012, a significantly higher proportion of programmes on RTÉ were indigenous than

for other domestic commercial channels (see Figure 4.8).

Figure 4.8 % of Top 20 Programmes11 by Station that are Indigenous (2011)

Source: TAM Ireland Ltd / Nielsen Television Audience Measurement, National Individuals 4+ (January –October, 2012, Top 20 Programmes by Station with no averaging option) / RTÉ Analysis

The significantly greater costs incurred by broadcasters reliant on indigenously

produced content is evidenced in Figure 4.9, which shows the cost per transmitted

hour for indigenous and acquired programmes on RTÉ television.

11 Please note programmes refers to the watched most episodes.

7.4

30.6

27.3

77

12.6

1.2

7.1

5.4

80

68.2

65.6

17.6

3e

TV3

RTÉTwo

RTÉOne

% Home First Run % Home Repeat % Acquired

10090

45

90

RTÉ One RTÉ Two TV3 3e TG4

Indigenous Acquired

54

An indigenous programme is, on average, 16 times more expensive to produce thanan acquired programme.

Figure 4.9 RTÉ Cost of Acquired vs. Indigenous Content per Transmitted Hour(2011)


Furthermore, particular genres such as drama and investigative current affairs, are

known to be particularly resource-intensive. A genre analysis of RTÉ television

illustrates the strong presence of such programmes during peak hours (see Figures

4.12 and 4.15).

Promoting a sense of national identity or belonging is important for individuals

resident in Ireland, but perhaps more important still for the Irish diaspora. RTÉ

statistics indicate high levels of overseas usage of RTÉ online services (see Figure

4.10) – with news and sports content on RTÉ.ie attracting particularly high levels of

overseas browsers.

Figure 4.10 % of Page Impressions which are Overseas (November 2012)


The 31% overseas usage of RTÉ.ie equated to 15.6m page impressions to overseas

browsers in November 2012.

€39,639

€2,397

Indigenous Acquisitions

31%33%

45%

27%

22%

RTÉ.ie RTÉ.ie News RTÉ.ie Sport News Now App RTÉ player

55

Their geographic profile is shown in Figure 4.11.

Figure 4.11 Geographic Profile of Overseas RTÉ.ie Impressions (November 2012)


A similar geographic profile of overseas users is reported for the international version

of RTÉ Player and the News Now App, both of which were launched in January 2010.

31%

19%4%3%

43%

UK

USA

Australia

Canada

Other

56

4.4 Supporting and Enabling NationalDebate

As a PSB, RTÉ plays an important role in supporting and enabling national debate. A

key measure of this is the number of broadcasting hours committed to news, current

affairs and factual programmes.

Figures 4.12 and 4.13 show that a significant proportion of RTÉ’s television and radio

hours are news, current affairs and factual related content. In the case of RTÉ

television, news, current affairs & factual programmes accounted for 53% of all

broadcast hours in 2011.

Figure 4.12 Indigenous Hours broadcast on RTÉ (TV) in Peak Time by Genre (%),2011


A similar proportion is evidenced in the case of RTÉ Radio 1 (45%) and RTÉ Radio na

Gaeltachta (40%). The share is significantly smaller for RTÉ 2fm and RTÉ lyric fm

reflecting their music focus.

Figure 4.13 RTÉ Broadcast Hours (Radio) by Genre (%), 2011

Source: RTÉ Information (Total Broadcast Hours)

33

34

17

19

17

18

17

17

8

7

9

6

2007

2011

News, CA & Weather Factual Sport Entertainment Drama Other

40

4

29

1

5

11

2

8

7

12

38

11

10

56

33

85

7

8

1

RTÉ Radio 1

RTÉ 2fm

RTÉ R na G

RTÉ lyric fm

News, CA & Weather Factual Sport Entertainment Music Other

57

The importance of news and current affairs to the RTÉ One schedule, and indeed it

national popularity, is evidenced in Figures 4.14 which shows that 8 of the Top 2o

most popular programmes broadcast in 2011 focused on news and current affairs.

Figure 4.14 % of Top 20 Programmes by Station that are News & CA, 2011

Source: TAM Ireland Ltd / Nielsen Television Audience Measurement, National Individuals 4+ (January -December 2011, Top 20 Programmes with no averaging option) / RTÉ Analysis

The importance that RTÉ places on news and current affairs is also evidenced in a

schedule analysis of RTÉ’s main terrestrial competitor for November 2012. Figure

4.15, shows that over 50% of content on RTÉ One was news, current affairs and/or

factual related.

Figure 4.15 % Peak Broadcast Hours by Genre (1st – 30th November 2012)


The high esteem in which RTÉ news and current affairs services are held is evidenced

in the finding that 67% of the Irish population consider the broadcaster its main

source of national news, compared with 9% for national newspapers (See Figure

4.16).

40%

10%

RTÉ 1 RTÉ 2 TV3 TG4 3E

News & Current Affairs Other

7

3

35

3

9

14

16

13

31

24

22

82

47

43

14

2

3

15

3

7 6

3e

TV3

RTÉ Two

RTÉ One

News & CA Factual Drama Entertainment Sport Lifestyle Other

58

Figure 4.16 Main News Sources for National Affairs (% Irish Population), 200912

Source: Ipsos MRBI, RTÉ Corporate Reputation Survey 2009

Related, Figure 4.17 shows a high degree of public confidence in the accuracy and

objectivity of RTÉ news broadcasts.

Figure 4.17 Most Trusted News Sources for National Affairs (% Irish Population),200913

Source: Ipsos MRBI, RTÉ Corporate Reputation Survey 2009

The level of confidence in RTÉ News content is also evidenced by the number of

viewers watching their weekday RTÉ news programmes. Figure 4.18 shows that RTÉ

attracts the highest number of viewers to news programmes of any of the main

competitor broadcasters.

For example, RTÉ Six One attracted approximately three times the number of viewers

than the next most popular ‘early evening’ news programme in 2012.

12 Question: From which of the following sources do you get most news & information about NationalAffairs13 Question: Which of these sources do you find most trustworthy for news & information about NationalAffairs

67

9

9

211

All RTÉ

TV3

National newspapers

Today fm

Other

65

8

8

210

All RTÉ

TV3

National newspapers

Today fm

Other

59

Figure 4.18 Average Weekday Audiences to News Programmes, 2012 (‘000s)

Source: TAM Ireland Ltd / Nielsen Television Audience Measurement, National Individuals 4+, Series Average(Monday – Friday)

491.0

36.0

21.0

437.0

146.0

14.0

14.0

137.0

12.0

9.0

RTÉ

BBC

ITV

RTÉ

TV3

BBC

C4

RTÉ

BBC

ITV

Ma

inE

ven

ing

Ea

rly

Eve

nin

gL

un

chti

me

60

4.5 Enabling Participation in Key NationalEvents

Enabling participation in key public events is a further RTÉ public service objective.

The compelling nature of RTÉ coverage of a selection of key national events is

reflected in the high television viewership this coverage attracted in 2011 and 2012

(see Table 4.2).

Table 4.2 RTÉ Viewership during Major Events

Event Date ProgrammeAverage

AudienceMarketShare

1. GeneralElection2011

15th Feb 2011 The Frontline Leaders Debate, RTÉ One 910,000 59.9%

22nd Feb 2011 Prime Time, RTÉ One ( Leader's Debate ) 767,000 50.6%

2. QueenElizabethII's visit toIreland May

17th May 2011 Queen Elizabeth II In Ireland 11:40-13:25 337,000 60.9%

Queen Elizabeth II In Ireland 14:55-16:39 329,000 52.0%

RTÉ News: Six One 585,000 51.3%


Queen Elizabeth II In Ireland 19:26-20:37 681,000 51.8%




RTÉ News: Nine o'clock 613,000 41.9%




3. PresidentBarackObama's visitto Ireland

23rd May 2011 President Obama In Ireland 09:28-12:25 285,000 55.7%

President Obama In Ireland 14:27-18:52 639,000 60.1%



4. LondonOlympics –Women’sBoxing Final(KatieTaylor)

9th August 2012 London Olympics 16.45 – 17.02

1,044,000 84.2%

5. Budget 2013 5th December 2012 Budget 2013, RTÉ One, 14:00-17:42 235,000 37.8%

Budget 2013, RTÉ Two, 15:45-18:47 74,000 8.3%

Nuacht 204,000 20.9%

Six One News 518,000 40.6%

Nine O'Clock News 503,000 32.0%

Prime Time Special 373,000 27.7%

Source: RTÉ Information / TAM Ireland / Nielsen Television Audience Measurement, National Individuals 4+,Live Data

Key national events also coincide with high volumes of online activity, across RTÉ.ie,

RTÉ Player, m.RTÉ.ie and the News Now App (see Table 4.3).

61

Table 4.3 RTÉ Online Activity during Major Events

Event / Subject Date

Page Impressions (m)Audio VisualStreams (m)

TotalRTÉ.ie

TotalOverseasRTÉ.ie

RTÉMobile*

TotalOverseas

RTÉMobile*

EventTracker

TotalPlayerTotal

1General Election CountWeekend

25-27th Feb,2011

18.2 5.7 3.8 0.8 1.8 0.9 0.2

2Queen Elizabeth II's visitto Ireland

17-20th May2011

14.0 4.1 7.0 1.1 0.7 2.3 0.7

3President Barack Obama'svisit to Ireland

23rd

May 20115.2 1.5 2.3 0.3 0.5 1.2 0.3

4Presidential ElectionDebate, 2011

24th May2011

3.1 0.8 1.8 0.40.0169 0.34 0.11

5 St. Patrick’s Day17th March

20121.9 0.7 2.3 0.6

0.122 0.25 0.15

6Opening CeremonyLondon Olympics

27th July2012

1.9 0.4 2.0 0.6n/a 0.18 0.1

7Closing CeremonyLondon Olympics

12th August2012

1.8 0.7 2.9 0.8n/a 0.19 0.13

8Katie Taylor OlympicFinal

9th August2012

2.7 n/a 2.6 0.7n/a 0.684 0.18

9 Budget 20135th

December2012

2.8 0.5 2.6 0.70.369 0.34 0.17

Source: RTÉ Information (*RTÉ Mobile represents News Now App and m.RTÉ.ie)

An important point from Table 4.3 is a high proportion of overseas activity during key

national events. For example, more than 30% of page impressions (or 5.7m) during

the General Election weekend in February 2011 were to overseas browsers.

RTÉ’s online services are hugely important in keeping the Irish diaspora, and others

interested in Irish affairs, connected with events in Ireland.

Further evidence of the effectiveness of RTÉ coverage of national events is found in

the high audience shares for national and international sporting events,

notwithstanding the availability of hugely well resourced alternatives on competitor

terrestrial channels (see Table 4.4).

62

Table 4.4 RTÉ Audience Share of Major Sporting Events

Event Date

Viewers 000’s % Share

RTÉTwo

BBCOne

UTVSky

Sports 1RTÉTwo

BBCOne

UTVSky

Sports 1

World Cup Final – NewZealand vs. France

23rd Oct2011

386 - 16 - 59.4% - 2.4% -

UEFA Champions LeagueFinal – Bayern Munich vs.Chelsea

19th May2012

440 - 44 43 31.2% - 3.2% 3.4%

Euro 2012 Ireland vs.Croatia

10th June2012

1181 - 64 - 68.7% - 3.8% -

Euro 2012 Spain vs. Ireland14th June

20121098 - 48 - 63.3% - 2.8% -

Euro 2012 Final – Spain vs.Italy

1st July2012

738 118 23 - 47.9% 7.7% 1.5% -

Source: RTÉ Information / TAM Ireland / Nielsen Television Audience Measurement, National Individuals 4+,Live Data

For example, 48% of Irish viewers watched the Euro 2012 Final on RTÉ Two, more

than six times the number of BBC viewers.

The resource differentials referenced earlier are evidenced in Table 4.5, which

compares RTÉ Football World Cup resources with those of the BBC and ITV.

Table 4.5 RTÉ Football World Cup Resources, and Viewership (2010)

ChannelNumber of

Staffon Location

# live matchesshown by

broadcaster(total 64)

Average IrishAudience

AverageShare

RTÉ 11 56 262.200(56 matches)

29.4%(56 matches)

BBC 295 32 82,400(29 matches)

9.2%(29 matches)

ITV 150 32 44,700(27 matches)

4.8%(27 matches)

Source: Resources (http://www.guardian.co.uk/media/2010/mar/12/bbc-staff-world-cup)Viewership (TAM Ireland Ltd / Nielsen Television Audience Measurement, National Individuals 4+, Live Data)

The lack of an Irish team participation in the World Cup makes the data presented in

Table 4.5 even more compelling.

63

Chapter 5. RTÉ Cost Management

64

Chapter 5. RTÉ Cost Management

This chapter presents a summary of high-level metrics of RTÉ cost management.

Table 5.1 shows the short-term evolution of the broadcaster’s annual revenues.

Table 5.1 RTÉ Operating Budget, 2008 to 2011

Total Peak Indigenous

Hours (Television)

RTÉ

Annual Revenue

€’000

2007 2032 441152

2008 2,077 440,760

2009 2,006 374,921

2010 2,113 371,667

2011 2,008 350,880

Source: RTÉ Annual Report & Group Financial Statements 2008 - 2011

RTÉ has been subject to a series of significant revenue cuts in recent years, reflecting

a dramatic decline in the size of the national advertising market.

Notwithstanding this, the broadcaster has succeeded in maintaining indigenous peak

broadcast hours and still enjoys very high levels of public support (see Section 4.2).

RTÉ responded swiftly and comprehensively to this revenue decline, implementing

cost savings of €91 million in this period, driven in part by a reduction of 210 in the

number of full-time equivalent employees (see Table 5.2).

Table 5.2 RTÉ Revenue Decline versus Operating Costs & FTE, 2008 to 2011

RTÉ 2008 2009 2010 2011

Revenue (€’000) 440,760 374,921 371,667 350,880

Operating Costs (€’000) 460,510 389,393 376,597 369,521

Full-time Equivalent Employees (FTE) 2,144 2,035 1,987 1,934

Index (2008 = 100) 2008 2009 2010 2011

Revenue 100 85 84 80

Operating Costs 100 85 82 80

FTE 100 95 93 90


The broadcaster also realised significant cost efficiencies in the production and

acquisition of television and radio content (see Table 5.3).

RTÉ has sustained high levels of

public satisfaction and

indigenous output hours in spite

of a 20% reduction in its

operating budget since 2008

65

Table 5.3 RTÉ Cost per Transmitted Hour (CPTH) 2008 - 2011

RTÉOne

RTÉTwo

RTÉRadio 1

RTÉ2fm

Average14

2008 €20,628 €13,160 €4,909 €1,543 €7,166

2009 €18,071 €10,297 €4,515 €1,667 €6,156

2010 €16,667 €10,868 €4,080 €1,495 €5,887

2011 €16,632 €10,068 €4,183 €1,427 €5,745

Movement 08-11 (€) -€3,996 -€3,092 -€726 -€116 -€1,421

Movement 08 - 11 (%) -19% -23% -15% -7% -20%


RTÉ reduced the average of cost per transmitted hour by 20% between 2008 and

2011.

Related, the cost per hour of continuing drama at RTÉ also compares favourably with

that reported in respect of the BBC (see Table 5.4).

Table 5.4 Fair City Cost per Hour relative to BBC Continuing Drama

Index, Fair City = 100Fair City

RTÉCasualty

BBCHolby City

BBCEastenders

BBC

2007 100 468 317 262

2008 100 476 308 242

2009 100 492 316 240

2010 100 487 329 252

Source: RTÉ Information / BBC, ‘The Costs of Producing Continuing Drama’, March 2011

The cost per hour for Casualty broadcast by the BBC, for example, was almost five

times higher relative to the cost per hour for Fair City in 2010, whereas EastEnders

was more than double.

RTÉs performance in maintaining high audience share and public satisfaction levels

in a time of serious budget retrenchment is more impressive when considered against

the fact that selected UK-based PSB competitors grew their budgets (see Table 5.5).

14 The average includes RTÉ lyric fm & RTÉ RnaG as well as the four stations listed in the table.

66

Table 5.5 RTÉ Operating Costs versus BBC15 & Channel 4

RTÉ (Index, 2008 = 100) 2008 2009 2010 2011

Revenue 100 85 84 80


BBC (Index, 2008 = 100) 2008 2009 2010 2011

Revenue 100 106 108 113


Channel 4 (Index, 2008 = 100) 2008 2009 2010 2011

Revenue 100 92 103 104


Source: RTÉ, BBC and Channel 4 Annual Financial Statements 2008 - 2011

Equally of note from Table 5.5 is the fact that neither of the comparator PSBs reduced

their operating costs to the same extent as RTÉ. In fact, the scale of the RTÉ operating

budget reduction is almost unique across the Irish semi-state sector where cost

retrenchment has been widespread (see Table 5.6).

Table 5.6 Change in Operating Costs, RTÉ versus Irish Semi-State Organisations,2008 t0 2011

Index, 2008 = 100 2008 2011

RTÉ 100 80

An Post 100 98

Bord na Mona 100 102

DAA 100 92

Coillte 100 95

Eirgrid plc 100 120

Iarnrod Eireann 100 86

Bus Eireann 100 94

Dublin Bus 100 88

VHI 100 88

Source: Company Accounts 2008 & 2011 / PwC Research

The cost of a television licence fee in Ireland increased by €2 (1%) in 2008 and has

remained constant since. In contrast, a wide range of other household costs have

increased substantially more over the period from 2006 - 2012 e.g. bus fares,

newspapers (see Table 5.7).

15 BBC’s year end is 31 March

67

Table 5.7 Change in Selected Household Costs, 2006 to 2012

Index, 2006= 100 2006 2012

RTÉ Licence Fee 100 100

National Stamp 100 115

Irish Times Weekday Edition 100 133

Irish Independent Weekday Edition 100 119

Irish Times (Saturday Edition) 100 153

Irish Independent (Saturday Edition) 100 123

Taxi fares 100 108

Dublin Bus Fares 100 141

Train fare (Dublin to Cork – Single Ticket) 100 110

Train fare (Galway to Dublin – open Return) 100 116

Doctor’s fees 100 113

Hospital A&E Charge 100 167

VHI Plan B Option 100 218

Electricity 100 140

Liquid fuels (home heating oil) 100 167

Petrol 100 157

Motor Car insurance 100 111

Travel insurance 100 105

Source: Company Accounts & CSO, CPI 2006-2012/ PwC Analysis

68

Documents

In preparing this report, PwC have relied primarily upon ...2.3 Analysis of RTÉ Expenditures, 2011 2.3.1 Overview Table 2.3 shows a breakdown of RTÉ operating expenditures in 2011