Government Funding of €725m for RTÉ Could Distort Media Market, Warns Publisher

Mediahuis, the publisher of the Irish Independent, has warned Minister Patrick O'Donovan that the Government's €725m funding agreement for RTÉ could distort the media market by bankrolling enhancements to RTÉ's digital products. Mediahuis is concerned that the rise of artificial intelligence could compound the imbalance between Big Tech and commercial media companies. The company believes that RTÉ's large financial commitment to digital optimisation could hinder independent media's ability to compete for commercial revenue.

Mediahuis, the publisher of the Irish Independent, has expressed concerns over the €725m funding agreement for RTÉ, warning that it could distort the media market. The company believes that the significant financial commitment to digital optimisation could hinder independent media's ability to compete for commercial revenue. This comes as the rise of artificial intelligence (AI) further tilts the balance between Big Tech and traditional media companies.

In a letter to Minister for Culture, Arts and Communication Patrick O’Donovan, Mediahuis director of legal and public affairs, Fergus Foody, expressed his concerns. Foody highlighted that RTÉ's planned investment of €40 million in digital products such as the RTÉ Player and RTÉ News and Audio apps could create an unfair advantage. This investment, he argued, is an "enormous commitment of financial resources that independent media can only dream about," potentially making it difficult for commercial media companies to compete for advertising revenue and user engagement [1].

Foody also noted that the rise of AI could exacerbate the existing imbalance between Big Tech and commercial media companies. The use of AI by RTÉ for digital enhancements could further compound this issue, as third-party companies often exploit the intellectual property of commercial media platforms without fair compensation or appropriate attribution [1].

The funding agreement, which guarantees RTÉ €225 million this year, rising to €240 million in 2026 and €260 million in 2027, is the first time in a generation that the broadcaster's funding has been guaranteed for more than one year. While the agreement is below the €780 million that RTÉ initially requested, Mediahuis believes that the significant financial commitment could have unintended consequences for the media market.

Mediahuis is not the only commercial media company to criticize the RTÉ funding settlement. Last year, Virgin Media, owned by US telecoms billionaire John Malone’s Liberty Global group, also raised concerns about the sustainability of its competition with RTÉ. Virgin Media requested €30 million to fund its news and public service output, highlighting the challenges faced by commercial media companies in the current funding landscape [1].

The rise of AI in the media sector is not without its benefits, as demonstrated by the success of language-learning app Duolingo. Duolingo has reported exceptional financial results for the second quarter of 2025, with its revenue soaring to $252.3 million, a 41% increase year-over-year. The company's AI-enhanced features have significantly boosted user engagement and subscription rates, leading to a raise in its annual revenue forecast for 2025 [2].

However, the success of Duolingo's AI integration does not negate the concerns raised by Mediahuis. The media landscape is complex, and the impact of significant funding agreements on market dynamics is an important consideration. As AI continues to play a larger role in media, the balance between public funding for broadcasters and commercial media companies will remain a critical issue.

References:
[1] https://www.irishtimes.com/business/2025/08/09/rte-725m-funding-could-distort-media-market-irish-independent-publisher-warns-minister/
[2] https://theoutpost.ai/news-story/duolingo-s-ai-powered-growth-revenue-soars-as-language-learning-app-embraces-artificial-intelligence-18792/