Sky and RTE clash over pay TV fee plans
RTE says licence-fee-payers are ‘subsidising commercial media companies’, writes Samantha McCaughren
SKY and RTE have clashed over plans by the Government to capture some of the €50m in Irish ad revenue going to the London-based media group and other UK channels.
As part of review of the funding of RTE and TG4, Communications Minister Denis Naughten has been exploring ways of getting Sky and other pay-TV platforms to contribute more money to the Irish broadcasting industry.
One option is the introduction of retransmission fees, whereby Sky would pay RTE for carrying its channels. A levy on Irish advertising going to UK channels is also under consideration.
In a submission to the Oireachtas Committee on Communications consultation on the future of public service broadcasting (PSB), Sky said some of the proposals could damage the Irish broadcasting market. While RTE insiders say that Sky would lose Irish viewers and significant subscription revenues if RTE was downgraded on or even missing from the Sky offering, Sky would argue that RTE gets significant advertising by being on Sky. In its submission, Sky estimates that €32m of RTE’s ad income is derived by viewing on the Sky platform.
“Sky has never paid [for] retail free-to-air channels in any market in which it operates and there is simply no compelling case to break this precedent in Ireland,” read the document.
“Our subscribers are already paying for RTE through their licence fee and we do not believe it is fair or reasonable to expect them to pay twice to receive this service,” it continued.
“Potential changes in this area risk a detrimental effect on the broadcasting market as a whole, and may even exacerbate problems that the PSBs may face.” At present Sky is obliged to carry RTE and give it a prominent position on its electronic programme guide.
“It is important to recognise that the current legislation provides significant mutual benefits to all parties,” said Sky.
However, in a strongly-worded statement to the Sunday Independent, RTE claimed that licence fee money is effectively propping up commercial platforms such as Sky.
“In effect, the current law is creating a situation where publicly-funded media and indeed TV licence fee payers are indirectly subsidising the commercial activities of hugely profitable international media companies.
“In an increasingly competitive and globalised market, where investment in Irish programming and Irish journalism is increasingly under threat, the re-balancing of outdated legislation in Ireland to enable negotiation of a much fairer commercial relationship between Irish broadcasters and platforms is long overdue.”
RTE said pay TV operators regularly pay for content. “Across these islands TV platforms routinely pay very significant sums to a whole range of broadcasters and rights holders so they can offer their channels to their customers.
“However, because of outdated legislation, TV platforms such as Sky, Virgin, Eir and Vodafone, pay nothing to Irish terrestrial broadcasters like RTE and TG4 for their linear channels.
“This is resulting in an unfair and large imbalance in the commercial relationship between TV platforms and Irish broadcasters.”
In its submission, Sky also said its total investment last year in Irish content amounted to more than €20m.
“Furthermore, in the latest financial year (2015/2016) our contribution to the Exchequer, in terms of corporation tax, Vat and employer PRSI was in excess of €150m.”
Sky also said that any “market intervention should be done in as minimally a distortive way as possible”.