17 September 2014
The South African Broadcasting Corporation (SABC) today briefed the parliamentary committee on their 3rd quarter reports for 2013/2014 financial year which covers the period of 1 October to 31 December 2013.
The SABC highlighted success in achieving results in some areas but also conceded that they were also working on dealing with some challenges.
Key among these achievements is the fact that the Broadcaster has fully paid up government guarantee loan granted in 2009 following the Corporation’s financial woes.
The total revenue of R2 099.6 billion for the period under review was R143m which is 7% higher than what was budgeted.
The total expenditure of R1 688.5bn increased by 10% (R153m), while the 3rd quarter surplus was R371m. The surplus was 7.5% or R26m higher than budget.
Year-on-year revenue also increased by R494m which accounts for 10% and the highest increase was from Television sales.
According to the 3rd quarter report All Adults,Television delivered an audience share of 48% against a target of 53%. This was attributed to the increased competition for South African audiences on TV.
Radio on the other hand achieved a national adult audience share of 68.6% compared to the 67% target. This represents a growth of 1.2% from the previous year’s level of 67.4%. SABC Radio also delivered a share of 53.4% in the advertiser attractive LSM 7-10 audience segment.
Minister of Communications Ms. Faith Muthambi said in her opening remarks, “During the period under review, the former President, Nelson Mandela passed on. The SABC played a critical role as the host broadcasting providing feeds to other broadcasters both national and international. The SABC fully paid up its government guarantee loaned granted in 2009 following the Corporation’s financial woes.”
Although the SABC has posted a positive performance in critical areas, particularly finance, the non-performance is symptomatic reflection of a plethora of long outstanding issues which, unless comprehensively dealt with, Minister believes this will continue to inhibit the Corporation’s performance. She indicated that these issues are broad, ranging from policy/legislation to organizational - both exterior and interior to the organization.
While appreciating the positive financial performance of the Corporation during this Quarter as exhibited through the total revenue collected, Minister Muthambi highlighted that the following should be disconcerting:
The Corporation’s continued reliance on commercial revenue. While this may be lauded for overcoming dependence on public funding particularly the fiscus, it exposes the public broadcaster to the vagaries of the market, instead of it focusing on delivering public value.
Muthambi further expressed concern that TV license fees which is a barometer to measure the link between the public broadcaster and its viewing public is under-performing. This in her view makes government’s project of revising the Public Broadcaster’s business model more urgent as announced previously in our interaction with the PCC.
Television’s under-performance can be attributed to low investment in new content as discussed above. Unless this is addressed, this negative performance will persist as it has done in the 2 previous quarters.
As acknowledged by the Corporation during this Quarter, continued under-investment in content and its continual increase in its headcount present huge risks to the organization.
The 3rd quarter report also revealed challenges in the continued delays of DTT project implementation. Even though these are beyond the Corporation’s control they continue to affect the SABC’s performance in terms of improving its channel offerings and overcoming channel disruptions caused by the broadcasting of sports of national interests. While the Corporation has reported on its readiness, no new channels, including dedicated parliamentary services, and others provided for in the Broadcasting Digital Migration Policy approved by Cabinet in 2008, can be introduced, while limited expansion of public radio services can be carried out owing to unavailability of radio frequency spectrum in many critical areas of the Republic.
Another policy issue that poses a challenge to the SABC is that the current policies governing public broadcasting are not only archaic as they were developed in the early years of our transition to reposition the public broadcaster to a new democracy.
The Minister presented the following key interventions:
- Prioritization of the Public Broadcaster’s long outstanding funding model in consultation with the public.
- Government will work with the Board and Executive Management to ensure that a new content business model is developed to drive efficiency and to achieve sustainability of the organization. This will include a Content Investment strategy, including programming and scheduling.
- A discussion should be held to deal with the matter of rapid increase in Sports rights. This should be done with the Department of Sport and Recreation on the possibility of them funding development and minority sporting codes. Similar arrangement exists with Department of Basic Education whereby they subsidize and fund educational programmes.
- She will reveal detailed plans to revive the DTT project in due course. The details will also be shared with Portfolio Committee.
- Despite the limited resources, the Department is currently engaged in a process for a comprehensive Broadcasting Policy Review that also covers public and community broadcasting. Report on the progress to be shared with Parliament in due course.
Said Minister Muthambi, “We are currently analyzing a number of reports based on investigations that were carried out at the public broadcaster since 2009. These reports include the Auditor-General, the Public Protector, the SIU, and Pricewaterhouse Coopers (PwC)’s Skills Audit. The issues raised in these reports are very important and they will receive immediate attention as they are at the core of the smooth functioning of the SABC. For the Department, they will eventually be part of the process to turn the Corporation around in the interest of the South African public.”
The Minister undertook to work with the SABC Board and Parliament where required on the implementation plan. A progress report will be shared with the Portfolio Committee before the end of the financial year.
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