Submission by Virgin Media Ireland to the Joint Oireachtas Committee On
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Submission by Virgin Media Ireland to the Joint Oireachtas Committee on Media, Tourism, Arts, Culture, Sport and the Gaeltacht, on Challenges facing Public Broadcasting and the broader Media Sector as a result of Covid-19. Wednesday 16th December, 2020. 1. Chairperson and Members of the Committee. Thank you for your invitation and I am delighted to represent Virgin Media Television. My name is Paul Farrell, I’m managing director of Virgin Media Television and I’m joined by my colleague, Áine Ní Chaoindealbháin, our director of operations. As you would be aware, Virgin Media Television is Ireland’s leading independent national public service broadcaster, operating under the provisions of Section 70 of the Broadcasting Act, and our revenues and funding are sourced commercially on a competitive market basis. We are part of Virgin Media Ireland which employs 1,000 people and is Ireland’s leading cable TV provider, the largest national provider of high-speed broadband services and a leading provider of mobile services nationwide. 2. Virgin Media Television is a major investor in creativity and choice in Ireland. This is characterised through our investment in content and programming and our multi-tiered digital platforms to suit life and living in Ireland today. By close of play this year, we will have invested over €100 million in our content and programming – right across our operations (broadcast and cable), including our channels Virgin Media One, Two and Three, and Virgin Media Sport. We have developed a very effective and successful partnership model to support the broader ecosystem that creates, develops, produces and distributes Irish content and in particular, drama. For example, the recent success of productions including Blood, The Deceived, and real-life documentary Inside the K have gone on to be recognised internationally and distributed globally. 1 We also sponsor the Virgin Media Dublin International Film Festival and recently announced a short film competition with a prize fund of €150,000 in conjunction with Screen Ireland. 3. Virgin Media Television plays a major part of plurality in Irish media - essential for our public conversation - keeping the nation informed through trusted news and current affairs programmes, as well as drama, entertainment and sport. With regard to the pandemic, while our primary focus was always on the safety of our staff, we have worked tirelessly to maintain all our local programmes and shows on air, as well as continuing to inform the public and support the Government with coverage of live press conferences. This in our view was essential public service broadcasting especially in keeping people updated with essential information and also entertained through this very difficult period. To put this in context, during Covid-19, 3.49 million people have tuned into Virgin Media News and Current Affairs since the start of the current crisis. Viewing figures for our News at 12.30 are up 36% year on year. News at 5.30 increased its audience by 51% and viewership of our 8.30 pm news bulletin increased by 44%. We produced more live Irish content from our studios throughout each day from Ireland AM, Elaine and The Six O Clock show to The Tonight Show, which all provide public service content, staying the course through these trying times and supporting communities, charities, businesses and families all across the country. The Department of Health’s Amárach research report found in November that 44% of the population are getting their news and information through Virgin Media Television. 4. We operate an efficient broadcasting platform, and as a commercial broadcaster, we live within our budgets. Like every other organisation during the current crisis, our priority has been to ensure continuity, and simultaneously to radically increase programming and output. We have spent an extra and unanticipated €600,000 this year directly related to COVID- 19, including increased live broadcasting capacity and technology for remote working. 2 We also set out to support our communities and businesses as much as possible through our €1m #BackingBusiness and #BackingLocal initiatives where we have promoted over 200 Irish SMEs across our broadcast, digital and social platforms in recent months. Despite this, we were disappointed to be excluded from the relief offered to other broadcasters through the partial refund of the BAI levy and the reclassification of the Sound & Vision fund. In tandem with this, of the estimated €15m in necessary Government advertising spend associated with Covid-19 across all media up to October, we were very disappointed to receive just a 7% share of this given that our usual natural share of commercial impacts of the overall broadcast TV sector is greater than 30%. 5. The COVID-19 crisis has had a widespread and severe impact on the arts and entertainments sector. In line with the restrictions within the economy to stop the spread of Covid-19, many normally televised public, cultural and sporting events were cancelled. The supply of new TV content was limited, pending the resumption of production across some formats, including soaps, dramas, new TV series, game shows and variety programming. Market conditions in the media sector deteriorated very considerably, including a major slump in advertising revenues. This impacted severely on the broadcasting sector including Virgin Media Television. However thankfully we are now seeing improvements in this regard. The generally poor market circumstances also compounded an ongoing negative trend for the Irish media sector where a growing volume of advertising is increasingly being diverted from traditional media towards online platforms including social and sharing media. 6. The accelerated growth of Google, Facebook and Amazon, among others, has increased their dominance in the advertising market, with Google and Facebook now accounting for close to 80% of all digital advertising and 50% of the total advertising market. 3 As a broadcaster we are entirely dependent on advertising revenue to sustain our business and continue to fulfil our public service obligations. The pace of advertising revenue moving to Google and Facebook without a level playing field in terms of standards or accountability, in tandem with the uncertainty about the funding model for public service broadcasting, form the key contributing factors to the need for more urgency from Government in addressing this situation. 7. As you are aware, the Government has established a Commission on the Future of Media and we will be contributing our viewpoints to this process where we believe that public service broadcasting is an essential pillar for Irish society, media plurality and democracy. We would be concerned that the timeline and recommendations of the Future of Media Commission will ultimately come too late to become effective on any immediate basis or to address the challenges of Irish media over the next 18 months. It is essential that broadcasting policy and legislation should be modernised in light of rapidly changing technological developments and the reality that most public service broadcasting is provided by licensed commercial companies. This would underpin the overall viability of public service broadcasting in the changed media landscape and include an examination of funding models and supports which stimulate the benefits that the entire sector brings to Irish society and the economy, including arts and entertainment. 8. Chair, these are some of the facts we have been dealing with over the past year. Behind those facts is a fuller story. That story is of the rapid diversification of the Irish audience and around which the public policy implications are clear. They are in-play during this pandemic, and this pandemic and its impact are not yet over. It is essential now and for the future that the State’s funding of public service broadcasting is both transparent and accountable and that it is channelled and used in a manner that is economically viable, that upholds wider plurality throughout the indigenous media sector and ensures a free and fair marketplace. 4 There is a model through the Sound and Vision fund and Screen Ireland that highlights the potential for a more transparent and collaborative approach to how we fund public service content into the future. And that word ‘content’ is of paramount importance and so too, therefore, is the concept of Public Service ‘Content’. A move towards contestable funds with clear transparency and accountability, greater collaboration across the entire media ecosystem, and a clear strategy on distribution platforms to support all indigenous media, would be welcome in policy terms. Covid-19 has accelerated the move to digital media consumption across the board, and audiences are deciding when, where and how they wish to consume and find their content. Public Service Broadcasting needs to focus on clearly defining the type of content that will and should be supported through the public purse. This includes the creation of local content and the relevant channels to enable Irish audiences to find it, engage with it and trust it. That has to be a priority. For public service broadcasting to reach its target audience, it must be delivered on diverse platforms. Plurality on-air is an essential part of how the public conversation plays out every day on-air, and in parallel with print and on-line platforms. In the pandemic, that plurality, which Virgin Media Television as a licensed public service broadcaster plays an important part of, has ensured that quality, authoritative public service broadcasting is available to people to rely upon, and on behalf of Virgin Media Television I can assure you that we will continue to serve the people of Ireland to the maximum of our capability. Thank You Chairperson and Members of the Committee. 5 .