Critics accuse RTE of spending too much on digital TV, online presence

DUBLIN — Irish national broadcaster RTE has responded to a mounting internal financial crisis by asking the government for a whopping 70% increase in the public TV license fee, from 70 pounds Irish ($80) to $137 a year.

Arts Minister Sile de Valera will give a recommendation to the government on the proposal within the month.

Meanwhile, the country’s only commercial channel, TV3, has made a complaint to the European Union competition commissioner, saying the increase would give RTE an unfair advantage in the market.

RTE is supported by two revenue streams: the license fee and ad income. It has operated at a broadcast loss but group profit since the late ’90s, and is heading into serious overall deficit — a projected $26 million in 2002.

The most significant change which has led to this financial crisis is the entry of TV3 in 1998. British media conglom Granada bought a 45% stake in the channel last year, giving it access to a broad base of popular U.K. programming.

Competition has driven ad rates up, and because the license fee is not index linked it has remained flat since 1986 (save a small increase of $9 in 1996).

License fee income contributes 37% of RTE’s revenue, as opposed to 50% in 1991. An additional financial blow to RTE has been the loss of “Riverdance” income: As one of its original producers, RTE has enjoyed an investment stream from the dance spectacular since 1995, but that contract ran out last year.

RTE says all of the license-fee increase would go toward programming, but industry critics and rivals are skeptical, accusing the network of devoting too much of its energies to its online presence and the development of a yet-launched digital TV service.

Meanwhile, the Irish public has remained surprisingly silent on the issue, given that each of 1.1 million TV-owning households could soon be dunned for an additional $57 a year.

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