Tuesday, 13 September 2016

VM Ireland on MB Blog - Irish Times: RTÉ should not try to do everything, says Virgin Media boss

Story from Irish Times:

RTÉ should “take a hard look” at whether it needs to have “a foot in every camp” of Irish media in light of its weak financial position, according to the chief executive of one of its biggest rivals, TV3-owner Virgin Media Ireland.

Tony Hanway questioned why RTÉ has been spending money on sports rights when it recorded a deficit of €2.8 million last year and has been on track for some time to record a much greater deficit in 2016.

The Virgin Media boss, who was speaking at the Mediacon broadcasting conference in Dublin, also said RTÉ should consider cutting some of its services.

“Does RTÉ really need to run a pop radio station?” he said, referring to 2fm.

“It seems there is quite a lot there to take a hard look at,” he added.

“If you haven’t got the money do everything, you have to look at what you are spending your money on.”

Mr Hanway conceded that RTÉ, in an industry marked by ongoing global consolidation, had a role to play in ensuring media plurality and that having a strong State broadcaster was “very important” to Ireland.

But RTÉ shouldn’t be permitted to sink back into substantial annual deficits and “have a foot in every camp” while doing so, he suggested.

Director general Dee Forbes, who is due to speak at the same conference on Wednesday, has been drawing up her plans for the future of the organisation.

Staff expect they will include a large target number of voluntary redundancies, as well as the possible merger of its television and digital divisions.

RTÉ has already lost out in a number of recent sports rights auctions.

The Six Nations rugby tournament will move to TV3 from 2018, while Eir Sport is understood to have beaten a joint bid from RTÉ and TV3 when it snatched the rights to the 2019 Rugby World Cup.

Earlier this year, RTÉ sub-licensed some of its Euro 2016 matches to TV3 in an attempt to balance the books in what was always set to be an expensive year, during which the general election, 1916 centenary events and the Olympic Games have all swollen its costs.

Lower-than-expected advertising revenues this year have worsened its financial position.

Meanwhile, Minister for Communications Denis Naughten, who opened the Mediacon event at City Hall, has been examining ways to generate more funding for Irish broadcasters.

Mr Naughten is preparing to bring to Cabinet his ideas on how the Government can help the wider creative sector.

Virgin Media, which is owned by the John Malone-controlled cable multinational Liberty Global, is firmly against the introduction of retransmission fees, one of the policy ideas that has been mooted.

Retransmission fees, whereby broadcasters charge platform owners like Virgin for carriage of their channels, are prohibited under a “must carry” / “must offer” obligation in the Broadcasting Act.

RTÉ has been calling for a change in the law, while British broadcasters including ITV – which is 9.9 per cent owned by Liberty Global – have been lobbying for a similar move in the UK.

Mr Hanway described retransmission fees as a “surcharge” that would only end up being passed onto customers.

“I don’t think it would encourage the efficiency that [RTÉ]should be applying to their own business model,” he said. Leave Bill Malone, the former RTÉ2 controller poached by TV3 in July, will take up his director of programming role at TV3 Group at the end of the year, Mr Hanway said.

Mr Malone is currently sitting out a period of gardening leave.

Virgin’s acquisition of UTV Ireland from ITV is also expected to be cleared by regulators and the Minister before the end of 2016.

Mr Hanway said the long-term content agreement with ITV’s distribution arm was an “equally important” part of this deal.

No decisions have yet been made on the future of UTV Ireland, he said.

However, if TV3 Group retains it as a third channel alongside TV3 and 3e, it will not continue under the name UTV Ireland.

Asked whether Virgin might rebrand its portfolio of Irish television channels as Virgin 1, 2 and 3, Mr Hanway said the company “hadn’t thought about it in depth”, adding that there was “a lot of brand equity built up in TV3 as well”.

The Virgin Media boss said it would not be “ignoring” local content.

He identified “the Pat Hickey story” as one that would be of future interest to Irish audiences.

“I think someone will be commissioning that in a few years, and I think a lot of us will be tuning in.”