2. Principal Activities and Segmental Information

(a) Principal activities

RTÉ is a not-for-profit organisation. Its principal public-service activity is the broadcast of a comprehensive range of free-to-air television and radio channels, and online services. Further opportunities to access RTÉ’s public-service content are provided via the RTÉ One+1, RTÉ2+1 and RTÉjr channels. These services serve all demographic categories in Irish society with a wide variety of output and genres, irrespective of commercial audience attraction, and with specific emphasis on indigenously produced programmes. RTÉ’s other public-service activities include RTÉ Orchestras.

The cost of RTÉ’s public-service activities is substantially in excess of the amount of public funding received in the form of licence fee revenue. Accordingly, RTÉ also engages in ancillary commercial activities to support its public-service activities. These include the sale of advertising and sponsorship, publication of the RTÉ Guide and other broadcast-related commercial activities.

As required by legislation, RTÉ provides digital terrestrial television (DTT) multiplexing services which it makes available to national broadcasters, including RTÉ’s own services, in accordance with published regulated market tariffs. The management of this multiplexing service is separated within RTÉ from the management of the broadcast divisions. RTÉ Transmission Network DAC (trading as 2rn), a subsidiary of RTÉ, supplies transmission and distribution services to multiplex operators (including RTÉ) and national and quasi-national sound broadcasters, including RTÉ. 2rn also makes the transmission network available to local broadcasters and rents surplus tower/mast space to a variety of third-party non-broadcast users.

RTÉ is structured under the following divisions: Commercial, Content, News & Current Affairs, Audience, Channels and Marketing, Network; and support divisions Operations & Production Services, Technology & Transformation, Human Resources and Finance. Network division, entirely located within 2rn, managed the transmission, distribution and related activities as described above. RTÉ’s Commercial division manages all commercial activities other than: those carried on by 2rn, the provision of multiplexing services (see above) and sales of archive and library services managed by the Content division. The Commercial division was established further to the publication of RTÉ’s updated Fair Trading Policy and Procedures to more clearly demonstrate the separation of RTÉ’s public-service and commercial activities. For each division, the Director-General and the RTÉ Executive review internal management reports on a monthly basis. A detailed list of RTÉ’s activities by division and legal entity is set out in note 20 to these financial statements.

In addition to the divisions, RTÉ operates Corporate HQ and Corporate division. Corporate HQ consists of general administrative and other activities that arise at the entity level relating to the governance of RTÉ as a public-service broadcaster. The Corporate division includes activities that are carried out centrally on behalf of the divisions, the cost of which is allocated in accordance with the cost allocation principles set out in note 1(c). The cost of the Corporate HQ is not allocated to divisions and is reported in All Other Segments.

(b) Segmental information and other analysis

Broadcast and transmission services including multiplex services are charged to the Audience, Channels and Marketing division on the basis of published tariffs. 2rn invoices RTÉ at the published regulated tariff for supply of transmission and distribution services as a multiplex operator and as a sound broadcaster. Costs incurred in support of RTÉ’s television and radio channels are charged to those channels on the basis of the published regulated tariffs. Other elements of the tariff are reported as a reconciling item between the cost of reportable segments and the total cost. Other 2rn services are invoiced at appropriate market rates.

Transactions between activities in pursuit of RTÉ’s public-service objects and activities to exploit commercial opportunities are effected at market rates.

The segmental information in note 2(d) presents information for the divisions above. Other segmental analysis as required by the Broadcasting Act 2009 is set out in note 2(e).

Note 2(e) provides an analysis of gross/net cost of public-service activities and (deficit)/surplus by channel and service. In addition, gross costs of indigenous content by broadcasting genre are also provided. The analysis between public-service and non-public-service activities is reported in a manner that is consistent with the principles used to report revenues and costs set out above.

Audience, Channels and Marketing, Content and News & Current Affairs division costs are fully allocated to the relevant television and radio channels and online services in accordance with the cost allocation principles outlined in note 1(c). Other supporting division costs are allocated to the divisions they support using appropriate cost accounting principles.

The residual non-channel and non-service activities are aggregated together under the category “Other” and include 2rn, provision of multiplexing services, RTÉ Guide and non-channel activities.

(c) Licence fee attribution

Each RTÉ service has a detailed service description which clearly defines how the channel or service contributes to the delivery of RTÉ’s public-service objects.

In line with common practice among public-service media organisations (PSMs) across the EU, RTÉ attributes public funding to individual services based on the net cost of the public service. Net cost of public service is the gross cost of delivering the public service after deducting the contribution from commercial activities.

The gross public-service cost of each of RTÉ’s channels and services includes all costs incurred in the production and delivery of the service. It does not include any costs incurred in the exploitation of commercial opportunities arising from the provision of the service. These costs are allocated against the commercial revenue to which they relate, to calculate the commercial contribution. Surpluses on commercial activities not directly linked to channels or services are attributed to those public-service activities which have significant revenue-generating potential (RTÉ One, RTÉ2, RTÉ Radio 1, RTÉ 2fm, online services) in proportion to the gross cost of public services.

Licence fee revenue is firstly attributed to those public-service channels and services that have a limited capacity to generate commercial revenue in their own right and therefore are, of necessity, primarily funded by licence fee revenue in order to facilitate continued delivery of the public service. The services at issue comprise RTÉ Orchestras, RTÉ Raidió na Gaeltachta, RTÉ lyric fm, statutory provision of programming to TG4, supplementary DTT and digital audio broadcast (DAB) channels (“other channels”), Corporate HQ and financing costs.

The remaining licence fee is attributed between services with significant commercial revenue potential in proportion to the net cost of the public services. These services include: RTÉ One, RTÉ2, RTÉ Radio 1, RTÉ 2fm and online services. No licence fee revenue is attributed to 2rn, the provision of multiplexing services by RTÉ or any costs incurred in the exploitation of commercial opportunities.

(d) Revenues, costs and surplus/(deficit) by Division (continuing operations), in line with RTÉ’s organisation structure, year ended 31 December 2020

	REPORTABLE SEGMENTS					OTHER
			News &
			Current			All
	Commercial	Content	Affairs	ACM	Network	Other	Consolidation	Group
	Division	Division	Division	Division	Division	Segments	Adjustments*	Total
	€’000	€’000	€’000	€’000	€’000	€’000	€’000	€’000
Revenue
Advertising income	97,504	-	-	-	-	-	(474)	97,030
Sponsorship income	8,888	-	-	-	-	-	-	8,888
Facilities income	2,721	-	-	-	-	23	(66)	2,678
Circulation and event income	3,644	-	-	-	-	-	-	3,644
Transmission, mast and towers income	-	-	-	-	26,492	-	(16,835)	9,657
Content, merchandising and related sales	8,428	444	-	-	-	-	-	8,872
Other commercial revenue	38	-	-	-	-	3,752	(40)	3,750
Commercial revenue	121,223	444	-	-	26,492	3,775	(17,415)	134,519
Licence fee revenue attribution	-	120,083	34,275	37,492	-	4,773	-	196,623
	121,223	120,527	34,275	37,492	26,492	8,548	(17,415)	331,142
Costs by output category**
Programme and output costs - by source
In-house productions	-	(116,105)	(54,822)	(1,079)	-	-	-	(172,006)
Commissioned programming	-	(37,056)	(38)	(475)	-	-	-	(37,569)
Indigenous programming	-	(153,161)	(54,860)	(1,554)	-	-	-	(209,575)
Acquired programmes - Ireland	-	(3,551)	-	(96)	-	-	-	(3,647)
Acquired programmes - Overseas	-	(22,846)	-	(1,457)	-	-	-	(24,303)
	-	(179,558)	(54,860)	(3,107)	-	-	-	(237,525)
General broadcast, transmission & other output costs	(8,069)	(4,301)	-	(41,546)	(17,254)	(107)	620	(70,657)
2rn transmission and power charges	-	-	-	(13,698)	-	(3,101)	16,799	-
Sales costs	(8,165)	-	-	-	-	-	170	(7,995)
	(16,234)	(183,859)	(54,860)	(58,351)	(17,254)	(3,208)	17,589	(316,177)
Unallocated revenues and costs
Corporate HQ	-	-	-	-	-	(5,010)	-	(5,010)
DTT related	-	-	-	-	-	(895)	352	(543)
Interest payable	-	-	-	-	(698)	(279)	8	(969)
Disposal of assets	-	-	1	-	(14)	5	-	(8)
Divisional Surplus/(Deficit)	104,989	(63,332)	(20,584)	(20,859)	8,526	(839)	534	8,435
Net defined benefit pension related finance income	-	-	-	-	-	1,366	-	1,366
Surplus/(Deficit) before income tax	104,989	(63,332)	(20,584)	(20,859)	8,526	527	534	9,801
Income tax								(1,863)
Surplus for the year								7,938

* Elimination of intra-group revenue and costs at arm’s length.

** Costs by output category include applicable depreciation, amortisation, net finance (expense)/income and exclude operating costs of Corporate HQ.

Additional Segmental Disclosures

Commercial revenue of:
External customers	120,683	444	-	-	9,657	3,735	-	134,519
Revenue from other operating segments	540	-	-	-	16,835	40	(17,415)	-
	121,223	444	-	-	26,492	3,775	(17,415)	134,519

One customer of all the reporting segments represents €199 million of the Group’s total revenue.

Material non-cash items included in the reportable segment costs include:

Depreciation and amortisation	558	4,072	2,077	1,465	5,693	244	(566)	13,543
Difference between pension charge and cash contributions	61	464	214	110	45	9	-	903

(d) Revenues, costs and surplus/(deficit) by Division (continuing operations), in line with RTÉ’s organisation structure, year ended 31 December 2019

	REPORTABLE SEGMENTS					OTHER
			News &
			Current			All
	Commercial	Content	Affairs	ACM	Network	Other	Consolidation	Group
	Division	Division	Division	Division	Division	Segments	Adjustments*	Total
	€’000	€’000	€’000	€’000	€’000	€’000	€’000	€’000
Revenue
Advertising income	101,404	-	-	-	-	-	(723)	100,681
Sponsorship income	11,738	-	-	-	-	-	-	11,738
Facilities income	2,987	-	-	-	-	22	(148)	2,861
Circulation and event income	5,701	-	-	-	-	-	-	5,701
Transmission, mast and towers income	-	-	-	-	27,283	-	(17,567)	9,716
Content, merchandising and related sales	10,722	466	-	-	-	-	-	11,188
Other commercial revenue	33	-	-	-	-	3,959	(40)	3,952
Commercial revenue	132,585	466	-	-	27,283	3,981	(18,478)	145,837
Licence fee revenue attribution	-	124,746	30,440	35,148	-	5,914	-	196,248
	132,585	125,212	30,440	35,148	27,283	9,895	(18,478)	342,085
Costs by output category**
Programme and output costs - by source
In-house productions	-	(137,560)	(53,296)	(415)	-	-	504	(190,767)
Commissioned programming	-	(43,222)	(55)	(1,100)	-	-	-	(44,377)
Indigenous programming	-	(180,782)	(53,351)	(1,515)	-	-	504	(235,144)
Acquired programmes - Ireland	-	(3,201)	-	(143)	-	-	-	(3,344)
Acquired programmes - Overseas	-	(22,214)	-	(1,158)	-	-	-	(23,372)
	-	(206,197)	(53,351)	(2,816)	-	-	504	(261,860)
General broadcast, transmission & other output costs	(8,127)	(4,525)	-	(43,010)	(19,089)	(385)	806	(74,330)
2rn transmission and power charges	-	-	-	(14,119)	-	(2,944)	17,063	-
Sales costs	(9,062)	-	-	-	-	-	64	(8,998)
	(17,189)	(210,722)	(53,351)	(59,945)	(19,089)	(3,329)	18,437	(345,188)
Other revenues and costs
Corporate HQ	-	-	-	-	-	(5,581)	2	(5,579)
DTT Related	-	-	-	-	-	(1,279)	571	(708)
Interest payable	-	-	-	-	(691)	(355)	8	(1,038)
Disposal of assets	-	19	-	-	(17)	286	-	288
Divisional Surplus/(Deficit)	115,396	(85,491)	(22,911)	(24,797)	7,486	(363)	540	(10,140)
Net defined benefit pension related finance income	-	-	-	-	-	994	-	994
Exceptional Items	-	-	-	-	-	256	-	256
Surplus/(Deficit) before income tax	115,396	(85,491)	(22,911)	(24,797)	7,486	887	540	(8,890)
Income tax								1,689
Deficit for the year								(7,201)

* Elimination of intra-group revenue and costs at arm’s length.

** Costs by output category include applicable depreciation, amortisation, net finance (expense)/income and exclude operating costs of Corporate HQ.

Additional Segmental Disclosures

Commercial revenue of:
External customers	131,713	466	-	-	9,716	3,941	-	145,837
Revenue from other operating segments	872	-	-	-	17,567	40	(18,478)	-
	132,585	466	-	-	27,283	3,981	(18,478)	145,837

One customer of all the reporting segments represents €200 million of the Group’s total revenue.

Material non-cash items included in the reportable segment costs include:

Depreciation and amortisation	233	4,093	1,331	1,441	6,914	363	(572)	13,803
Difference between pension charge and cash contributions	44	469	214	102	-	10	-	839

(e) Analysis of revenues, costs and surplus/(deficit) by channel, service and broadcasting genre and between public-service and non-public-service activities,
year ended 31 December 2020

	RTÉ One €’000	RTÉ2 €’000	RTÉ Radio 1 €’000	RTÉ 2fm €’000	RTÉ lyric fm €’000	RTÉ RnaG €’000	TG4 Support €’000	RTÉ Orchestras €’000	Corporate HQ €’000	DTT Related €’000	Online Services €’000	Other Channels €’000	Other €’000	Consolidation Adjustments €’000	Group Total €’000
PUBLIC-SERVICE ACTIVITIES
Indigenous programme costs
In-house productions	(73,165)	(24,406)	(26,844)	(5,001)	(3,770)	(9,765)	(5,496)	(11,701)	-	-	(11,065)	(793)	-	-	(172,006)
Commissioned programming	(25,539)	(6,959)	(1,037)	(21)	(110)	(106)	(1,908)	-	-	-	(542)	(1,347)	-	-	(37,569)
	(98,704)	(31,365)	(27,881)	(5,022)	(3,880)	(9,871)	(7,404)	(11,701)	-	-	(11,607)	(2,140)	-	-	(209,575)
Programme costs - by genre
Arts	(887)	-	(1,887)	-	(141)	(44)	-	-	-	-	-	-	-	-	(2,959)
Religious	(2,420)	-	(180)	-	-	(145)	-	-	-	-	-	-	-	-	(2,745)
Other factual	(25,037)	(3,020)	(2,924)	(23)	(168)	(1,371)	(179)	-	-	-	(488)	-	-	-	(33,210)
Factual	(28,344)	(3,020)	(4,991)	(23)	(309)	(1,560)	(179)	-	-	-	(488)	-	-	-	(38,914)
Drama	(15,918)	(133)	(614)	-	-	(7)	(360)	-	-	-	(38)	-	-	-	(17,070)
Entertainment	(18,672)	(326)	(2,685)	(2,506)	(419)	(509)	(1,619)	-	-	-	(2,392)	-	-	-	(29,128)
Music	(407)	(315)	(1,412)	(1,427)	(2,685)	(1,713)	(233)	(11,701)	-	-	-	(793)	-	-	(20,686)
News, Current Affairs and Weather	(34,186)	(22)	(14,930)	(630)	(429)	(4,783)	(4,954)	-	-	-	(7,230)	-	-	-	(67,164)
Sport	(1,088)	(23,787)	(3,249)	(436)	-	(1,088)	(30)	-	-	-	(1,459)	-	-	-	(31,137)
Young People’s	(89)	(3,762)	-	-	(38)	(211)	(29)	-	-	-	-	(1,347)	-	-	(5,476)
Indigenous programming	(98,704)	(31,365)	(27,881)	(5,022)	(3,880)	(9,871)	(7,404)	(11,701)	-	-	(11,607)	(2,140)	-	-	(209,575)
Acquired programmes
- Ireland	(2,934)	(595)	-	-	-	-	-	-	-	-	(96)	(22)	-	-	(3,647)
- Overseas	(13,166)	(9,262)	-	-	-	-	-	-	-	-	(1,456)	(419)	-	-	(24,303)
General broadcast, transmission and other output costs	(12,078)	(8,340)	(5,430)	(4,175)	(561)	(521)	(15)	(154)	(5,010)	(895)	(9,235)	(1,071)	(3,698)	406	(50,777)
2rn transmission and power charges	(2,177)	(2,114)	(1,938)	(1,056)	(1,068)	(1,056)	-	-	-	-	-	(4,289)	-	-	(13,698)
Net interest payable	-	-	-	-	-	-	-	-	(279)	-	-	-	-	-	(279)
Net defined benefit pension related finance income	-	-	-	-	-	-	-	-	1,366	-	-	-	-	-	1,366
Gross Cost of Public-Service Activities	(129,059)	(51,676)	(35,249)	(10,253)	(5,509)	(11,448)	(7,419)	(11,855)	(3,923)	(895)	(22,394)	(7,941)	(3,698)	406	(300,913)
Surplus on Commercial Activities	57,526	13,900	14,757	6,092	419	-	-	619	46	-	6,987	-	13,617	128	114,091
Distribution of Non-Channel Specific Contribution from Non-Public-Service Activities	7,068	2,830	1,931	562	-	-	-	-	-	-	1,226	-	(13,617)	-	-
Net Cost of Public-Service Activities Before Attribution of Public Funding	(64,465)	(34,946)	(18,561)	(3,599)	(5,090)	(11,448)	(7,419)	(11,236)	(3,877)	(895)	(14,181)	(7,941)	(3,698)	534	(186,822)
Public Funding
Licence fee revenue attribution	68,869	37,330	19,828	3,845	5,090	11,448	7,419	11,236	3,877	895	15,147	7,941	3,698	-	196,623
Surplus before income tax	4,404	2,384	1,267	246	-	-	-	-	-	-	966	-	-	534	9,801
Income tax	-	-	-	-	-	-	-	-	-	-	-	-	(1,863)	-	(1,863)
Surplus for the year	4,404	2,384	1,267	246	-	-	-	-	-	-	966	-	(1,863)	534	7,938

External commercial revenue includes €1.3 million from sales outside of the Republic of Ireland, primarily generated in the UK. Total non-current assets contain €0.5 million situated outside of the Republic of Ireland in 2020 (2019: €0.6 million).

(e) Analysis of revenues, costs and surplus/(deficit) by channel, service and broadcasting genre and between public-service and non-public-service activities,
year ended 31 December 2019

	RTÉ One €’000	RTÉ2 €’000	RTÉ Radio 1 €’000	RTÉ 2fm €’000	RTÉ lyric fm €’000	RTÉ RnaG €’000	TG4 Support €’000	RTÉ Orchestras €’000	Corporate HQ €’000	DTT Related €’000	Online Services €’000	Other Channels €’000	Other €’000	Consolidation Adjustments €’000	Group Total €’000
PUBLIC-SERVICE ACTIVITIES
Indigenous programme costs
In-house productions	(76,707)	(36,055)	(27,570)	(5,190)	(4,686)	(9,998)	(5,542)	(15,403)	-	-	(9,177)	(943)	-	504	(190,767)
Commissioned programming	(29,095)	(8,423)	(1,014)	(30)	(123)	(76)	(2,056)	-	-	-	(1,302)	(2,258)	-	-	(44,377)
	(105,802)	(44,478)	(28,584)	(5,220)	(4,809)	(10,074)	(7,598)	(15,403)	-	-	(10,479)	(3,201)	-	504	(235,144)
Programme costs - by genre
Arts	(889)	-	(1,797)	-	(236)	(60)	-	-	-	-	-	-	-	-	(2,982)
Religious	(2,418)	-	(153)	-	-	(145)	-	-	-	-	-	-	-	1	(2,715)
Other factual	(23,014)	(5,670)	(2,952)	-	(198)	(1,384)	(178)	-	-	-	(946)	-	-	52	(34,290)
Factual	(26,321)	(5,670)	(4,902)	-	(434)	(1,589)	(178)	-	-	-	(946)	-	-	53	(39,987)
Drama	(22,491)	(189)	(615)	-	-	(3)	(274)	-	-	-	(132)	-	-	-	(23,704)
Entertainment	(20,959)	(754)	(3,265)	(2,815)	(444)	(502)	(1,983)	-	-	-	(2,033)	-	-	4	(32,751)
Music	(940)	(412)	(1,481)	(1,318)	(3,210)	(1,808)	-	(15,403)	-	-	-	(943)	-	20	(25,495)
News, Current Affairs and Weather	(33,585)	(44)	(14,911)	(634)	(660)	(4,762)	(5,037)	-	-	-	(6,072)	-	-	407	(65,298)
Sport	(1,304)	(35,413)	(3,410)	(453)	-	(1,194)	(73)	-	-	-	(1,296)	-	-	19	(43,124)
Young People’s	(202)	(1,996)	-	-	(61)	(216)	(53)	-	-	-	-	(2,258)	-	1	(4,785)
Indigenous programming	(105,802)	(44,478)	(28,584)	(5,220)	(4,809)	(10,074)	(7,598)	(15,403)	-	-	(10,479)	(3,201)	-	504	(235,144)
Acquired programmes
- Ireland	(1,985)	(1,152)	-	-	-	-	-	-	-	-	(143)	(64)	-	-	(3,344)
- Overseas	(12,797)	(8,932)	-	-	-	-	-	-	-	-	(1,158)	(485)	-	-	(23,372)
General broadcast, transmission and other output costs	(12,826)	(9,385)	(5,206)	(4,211)	(597)	(549)	(16)	(354)	(5,583)	(1,279)	(8,686)	(1,114)	(3,924)	655	(53,075)
2rn transmission and power charges	(2,207)	(2,229)	(1,970)	(1,101)	(1,113)	(1,101)	-	-	-	-	-	(4,398)	-	-	(14,119)
Net interest payable	-	-	-	-	-	-	-	-	(355)	-	-	-	-	-	(355)
Net defined benefit pension related finance income	-	-	-	-	-	-	-	-	994	-	-	-	-	-	994
Gross Cost of Public-Service Activities	(135,617)	(66,176)	(35,760)	(10,532)	(6,519)	(11,724)	(7,614)	(15,757)	(4,944)	(1,279)	(20,466)	(9,262)	(3,924)	1,159	(328,415)
Surplus on Commercial Activities	56,450	21,264	14,631	6,328	553	-	-	2,863	308	-	6,784	-	14,459	(619)	123,021
Distribution of Non-Channel Specific Contribution from Non-Public-Service Activities	7,303	3,563	1,925	567	-	-	-	-	-	-	1,102	-	(14,460)	-	-
Net Cost of Public-Service Activities Before Attribution of Public Funding	(71,864)	(41,349)	(19,204)	(3,637)	(5,966)	(11,724)	(7,614)	(12,894)	(4,636)	(1,279)	(12,580)	(9,262)	(3,925)	540	(205,394)
Public Funding
Licence fee revenue attribution	67,181	38,654	17,952	3,400	5,966	11,724	7,614	12,894	4,636	1,279	11,761	9,262	3,925	-	196,248
Exceptional item	-	-	-	-	-	-	-	-	-	-	-	-	256	-	256
(Deficit)/Surplus before income tax	(4,683)	(2,695)	(1,252)	(237)	-	-	-	-	-	-	(819)	-	256	540	(8,890)
Income tax	-	-	-	-	-	-	-	-	-	-	-	-	1,689	-	1,689
(Deficit)/Surplus for the year	(4,683)	(2,695)	(1,252)	(237)	-	-	-	-	-	-	(819)	-	1,945	540	(7,201)

External commercial revenue includes €2.0 million from sales outside of the Republic of Ireland, primarily generated in the UK. Total non-current assets contain €0.6 million situated outside of the Republic of Ireland in 2019 (2018: €0.1million), this increase is primarily due to the adoption of IFRS 16 Leases.

(f) Analysis of network charges to all RTÉ services

	2020	2019
	€’000	€’000
RTÉ One	2,177	2,433
RTÉ2	2,114	2,229
RTÉ Radio 1	1,938	2,038
RTÉ 2fm	1,056	1,113
RTÉ lyric fm	1,068	1,122
RTÉ Raidió na Gaeltachta	1,056	1,191
Other	4,289	4,485
	13,698	14,611