RTÉ HAS introduced a new pricing system for its television advertising that it hopes will put a floor on this income stream, which has fallen sharply over the past year.

RTÉ earned about €180 million in gross (before commissions were paid) TV advertising income last year and expects this to decline by more than 20 per cent this year. This followed about five years of steep growth in revenues.

Following consultations with the advertising industry, the Montrose broadcaster has decided to move away from its “supply-and-demand” system – based on ratings and revenues – and moved to a fixed-rate mechanism that will offer set discounts to advertisers between June and December.

RTÉ said these discounts would range from 8 per cent to 16 per cent and would be in addition to existing discounts that have been in place for some months.

“We are committing to fair and transparent guaranteed discounts across audiences, regardless of whether the market rises or fall,” an RTÉ internal e-mail informed staff.

One advertising executive described the decision by RTÉ as a “move in the right direction of stabilising the TV market as it will reduce the uncertainty over planning forecasts and it offers clients a guaranteed savings potential”.

Some advertising practitioners, however, believe that the current system offers potentially bigger discounts given the economic climate.

It is understood that some agencies might push for RTÉ to introduce deeper fixed discounts, although the broadcaster is likely to resist such a move.

RTÉ said the move was designed to give it some certainty on its income, which it said is invested in home-produced programming.

RTÉ is currently seeking to achieve costs savings of €68 million as a response to a steep decline in revenues as a result of the economic downturn.

This week, the broadcaster axed the Seoige daytime chat show in a bid to save money.