Economist Jim Power published a report entitled The Potential Impact on Irish Media of the Public Health (Alcohol) Act 2015. This report analyses the impact of the proposed restrictions on alcohol advertising as set out in the Bill, in terms of their effectiveness and the impact on Irish media.
The Public Health (Alcohol) Bill 2015 proposes severe restrictions on the advertising of alcohol products. These include restrictions on advertising in certain places (such as local authority parks, public service vehicles, train and bus stations, near schools etc). It will also be an offence for more than 20% of advertising space in a publication to be allocated to alcohol products, unless that publication sells or distributes alcohol.
International Literature
Section 3 of the report considers a range of international literature on banning or restricting the advertising of alcohol. Overall, the international research does not provide conclusive evidence that a ban or severe restrictions on advertising alcohol would have the desired effect of reducing the harmful consumption of alcohol, particularly among young people. Furthermore, it is far from certain that an evidence base exists to justify the significant restrictions contained in the Public Health (Alcohol) Bill 2015. It is very questionable if the benefits to be derived from a ban on advertising would outweigh the costs.
Voluntary Code of Conduct
Ireland already has a strong regime in place to restrict the advertising and marketing of alcohol, and is supported by all relevant media bodies. By imposing the proposed new regulatory regime, the revenue tap for media will be turned off and media will suffer as result. The proposed changes will lead to fewer advertisements, which will result in less finance for professional Irish media content, job losses and less consumer choice.
Impact on Broadcast Media
Irish media in general is under significant financial pressure from declining advertising revenues and other factors, such as the alternative means of viewing and reading content.
RTE receives most of its funding from licence fees and advertising revenues. In 2007, RTE’s commercial revenue peaked at €245.5 million, however, this declined to €155 million in 2015. In addition, more than €20 million of RTE Television’s advertising revenue, totalling more than €80 million in 2015, is booked by companies that make their decisions in the UK. Due to the recent decline in the value of sterling, the euro equivalent is down by up to 17% over the past 18 months. Already RTE is under severe pressure; this would be exacerbated if the proposed measures in the Bill are introduced
TV3 is an independent commercial broadcaster that employs over 300 staff directly and another 200 indirectly. It invests tens of millions in content every year and is Ireland’s only non-state, truly independent free to air broadcaster. Unlike RTE, it cannot rely on licence fee or subscriber revenue, so it is also very vulnerable from an advertising revenue perspective if the proposed measures are introduced.
Over 40% of viewing to commercials by young Irish adults is to UK ‘opt-out’ channels. Introducing the proposed Bill would provide a significant material advantage to non-Irish broadcasters, which provide no public service value to the Irish viewer or make no meaningful contribution to the Irish economy.
The Irish broadcasting industry estimates that the cost to the Irish broadcasting sector across radio and TV, if the measures proposed in the Bill were to be implemented, would be €7 million per annum. This follows eight years of depressed advertising revenues which has resulted in aggressive cost cutting initiatives. There is little room for further cost cutting, and if revenues are hit further by Brexit related issues and the measures included in the Public Health (Alcohol) Bill 2015, then Irish programming content and the associated employment will be damaged further.
Out of Home Media
Measures in the Bill seek to prohibit advertising in many public spaces. This includes a prohibition on advertising within 200 metres of the perimeter of school grounds, compared to 100 metres at present. There does not appear to be any justification or evidence base to support such a measure.
Furthermore, there is no reliable, accessible and up-to-date information readily available to outdoor media owners to identify the perimeters and grounds of the country’s 3,300 primary schools, 723 secondary schools, and the many thousands of additional locations comprising local authority owned or maintained playgrounds, pre-school services, day nurseries, crèches, child-minding services,
The advertising industry estimates that the proposed measures could rule out the advertising of alcoholic products on around 88% of all existing advertising panels owned by OMA members. Media owners would be obliged to survey all sites individually to ensure absolute compliance so a blanket ban on alcohol advertising on all outdoor media would be initially necessary until this process of assessment was completed.
The outdoor advertising of alcohol supports 112 full-time equivalent jobs; it generates €1.7 million in taxation; and contributes €9.3 million to economic output annually. Based on advertising spend independently monitored by Nielsen, it is estimated that the proposed measures would cost the out of home media industry around €11 million per annum.
Newspapers
Since 2007, there has been a decline of more than 50% in advertising revenue and newspapers are struggling in the face of such pressures. This is resulting in job losses, lower wages and it is inevitable that the standard of content will come under pressure. The need for a high quality, professional and well-resourced newspaper industry has never been more apparent in the context of the growth of ‘fake news’. Hitting the revenues of newspapers will threaten further the effectiveness of the newspaper industry and apart from the economic impact; society will be worse off as a result. It is estimated that the proposed regulations could cost print media around €2 million per annum.
Conclusion
The Irish media industry is already under significant financial pressures from declining revenues. These pressures will be exacerbated by the proposed legislation with the loss of an estimated total of €20m in advertising revenue. This will inevitably cost further jobs in the sector and equally importantly, undermine the ability of the sector to deliver high quality media content and support Irish programme making. Furthermore, by imposing the regulations on advertising and marketing contained in the Public Health (Alcohol) Bill 2015, it is far from certain that they will actually achieve the desired objective to reduce harmful drinking, and the risk is that they will have significant unintended consequences for Irish media.
Read the full report here Alcohol Study Final Report 28 6 17
