MEDIA & MARKETING:Lobby group says State-owned broadcaster distorting media market, writes SIOBHÁN O'CONNELL
NATIONAL NEWSPAPERS are stepping up their campaign to persuade Minister for Communications Eamon Ryan to rein in RTÉ’s digital activities. The newspapers claim that the State-owned broadcaster is distorting the media market through unfair competition and they want the Minister to enforce the provisions of the Broadcasting Act 2009.
Lobby group National Newspapers of Ireland says their members are faced with the challenge of generating revenue from electronic content when RTÉ offers it for free.
Specifically, NNI cites what has been happening with news-related iPhone apps. The Irish Independentand The Irish Timesboth have paid-for iPhone apps while RTÉ's news apps for Apple's mobile phone are free. "Competition in the market will become more intense, and more unfairly skewed in favour of RTÉ, with the recent decision by Vodafone to make the iPhone available to its customers," says NNI.
This week’s announcement by RTÉ of a €350,000 deal with News International’s two tabloid titles to sponsor RTÉ’s Premier League coverage is an example of RTÉ cross selling across its media platforms that is annoying the newspaper sector.
John Handoll, a competition lawyer in William Fry who is advising NNI, says: "If the 2009 Broadcasting Act were to be enforced properly, you would see an end to bundling by RTÉ where advertisers are offered a commercial package straddling television, radio, websites, RTÉ Guideand so on.
“The Act is designed to reflect EU State aid law to make sure that RTÉ doesn’t take advantage of public funding to make life difficult for its competitors. RTÉ’s online involvement in commercial sectors such as dating, motoring and property is so disassociated from its public service remit that we doubt they even have the right to do that.”
RTÉ counters that its licence fee income, which amounted to €200 million last year, does not fund its online or other digital activities. The broadcaster insists that all its online activities are financed entirely from commercial income without recourse to public subvention of any kind.
NNI claims that this argument is disingenuous. Handoll says: “There are substantial public resources funding news provision in RTÉ. News provision goes into the website from which RTÉ gets all sorts of commercial spin-offs.”
Kevin Dawson, RTÉ’s head of communications, disputes this analysis: “The protectionist logic which seems to underpin the NNI submission proposes that having paid a TV licence which contributes towards RTÉ news content, that the public should then be prohibited from accessing such content in online form from RTÉ. This logic is untenable, anti-competitive, and perverse and defies rational analysis in the context of a modern, open, digital economy.”
According to RTÉ’s annual report for 2009, rte.ie is Ireland’s most popular media site, with unique users increasing by 22 per cent last year to 2.9 million. Traffic and unique users to the sport site increased by 24 per cent and 17 per cent respectively in 2009. On the sport section of RTÉ’s website, people can watch a large range of video clips, which are preceded by ads.
RTÉ Two’s indigenous programme costs categorised as public service amounted to €65 million last year. Of that, the cost of sport coverage was €39 million. The licence fee revenue attribution to the total spend of €65 million was €45 million. So whichever way you dice it, a large slice of licence fee income subsidised RTÉ sport broadcasts, bits of which then generate ads on the website.
RTÉ says there are substantial costs required to re-purpose audio, video and text programme content into online form, and this is solely funded from other RTÉ commercial activities and revenue sources.
NNI wants Eamon Ryan to direct the Broadcasting Authority to examine how the arms length process works in RTÉ and reassure newspapers that there is fair competition. John Handoll says: “There is a need for more clarity and transparency. There are currently major problems with the way the Broadcasting Act is being applied. It’s the Minister’s job to make sure State aid rules are properly implemented.”
Paul Cooke, managing director of the Star Newspaper Group says: “The continued failure to implement current legislation and policy is threatening the newspaper industry and its ability to provide employment for thousands of people.”
Cooke’s views are echoed by Joe Webb, chief executive of Independent News Media (Ireland). “We are not looking for handouts. All we want is a fair landscape. Why does RTÉ need to be involved in commercial activities at all when it receives €200 million in licence fees.”
siobhan@businessplus.ie
