Financial Squeeze

Colum Kenny in Sunday's Independent offers analysis of the recent financial crisis and how it is affecting the Irish media market, for instance:

The Broadcasting Commission of Ireland has, in principle, awarded the Irish DTT franchise to a Swedish/Irish company, backed by Denis O'Brien, in order to provide extra new bundles of programming. A new Irish film channel is among other delights promised, but current conditions may not augur well for the future of DTT.

RTE must build a transmission system to deliver DTT to Irish homes. But it has yet to to reach agreement on terms with O'Brien's consortium Boxer. It could cost RTE €100m to build the planned system, and nobody is sure where that money can be found or how much Boxer will agree to pay for using it. There is a danger that RTE may have to borrow the cash, thus building up big debts for the station and possibly subsidising BOXER's private service with public money.

Eleven years ago, in 1997, RTE received just over €77m in TV licence fee payments from members of the public -- and earned €110m more by selling advertising space. By last year, those two streams of income had risen to more than €195m and €245m respectively. That was before the financial crisis, and already now RTE is trailing its projected income by €25m.

Recent figures on Irish advertising suggest a modest annual growth up to last summer, but the figures do not reveal discounts on the asking price, or take into account the sudden downturn that is now happening.