Funding challenge for SABC as it takes on public role

Broadcaster’s spokesman says relying too much on state is about as undesirable as total dependence on advertising.

THE SABC’s new focus on its public-service directive, rather than relying as it does now on advertising revenue, raises questions as to how the broadcaster will fund itself as it embarks on its “true mandate” — of public service rather than commercial excellence.

Peter Matlare, predecessor of current SABC head Dali Mpofu, gave a lot of attention to the financial performance of the broadcaster, which reported its best results in its 70-year history in the year to March last year.

Despite the SABC’s financial prudence, Rhodes University journalism professor Guy Berger says: “The corporation has come under a lot of flak in recent years for competing too much with private players and, in the process, short-changing public service.”

In order for the broadcaster to fulfil its mandate, its dependence on advertising will have to drop substantially from its current level of more than 80%.

Public funding is the alternative, a contentious issue for commentators already wary of government’s grip on the SABC.

Mike Bosman, group CEO of TBWA/SA, says the SABC has to walk a fine line in implementing its public-service strategy. “If the broadcaster becomes wholly dependent on government for financing, the credibility of its content could be compromised.”

However, associate professor of media studies at Wits University, Tawana Kupe, says relying on public funding does not necessarily mean the ruling party of the day perpetuates its own policies on the broadcaster. Public funds belong to the citizenry of a country, he says, and the government of the day is just a custodian.

“We can have mechanisms to ring-fence the broadcaster from government control,” he says. Berger agrees, saying it is a myth that commercial funding eliminates government control and equally wrong that state funding necessarily guarantees government control.

“The issue with state funding is to ensure adequate insulating mechanisms, while also keeping the SABC accountable for the use of taxpayers’ money. The Independent Communications Authority of SA could be one such insulating mechanism.”

SABC spokesman Kaizer Kganyago says there is no intention of increasing dependency on government funding, because an overreliance on government is as “undesirable” as overreliance on advertisers.

“It is much more preferable for a public broadcaster to depend on funding directly derived from the public without the agency of government or advertisers, which invariably comes with strings attached.”

Currently, the broadcaster gets 3% of its funding from government and 12% from licence fees, with the balance emanating from the commercial sector.

Unlike the BBC, which relies on licence fees paid by more than 80% of its viewers, the SABC is still struggling to get the buy-in from local television watchers.

On licence fees becoming more central to the funding of the broadcaster, Kupe believes the public has never really seen itself as the owner of the SABC and that government, rightly or wrongly, is seen as its owner.

“There is a symbiotic relationship between the BBC and its viewers that doesn’t exist between the SABC and its own.”

Complicating the relationship further, Kupe cites the SABC’s “nasty” sociopolitical history.

Starcom CEO Gordon Patterson believes the SABC simply cannot sustain its new strategy.

“Bills have to be paid and government cannot pay them,” he says. “The SABC strategy is hollow and full of political rhetoric.”

One of the SABC’s biggest advertisers, SABMiller, says it will become concerned only if the result of broadcaster’s new strategy is an increase in marketing costs due to reduced alternatives.

“Advertising is a key means of communicating to a market, and advertising messages help consumers make choices. Any decision that reduces the ability to reach these audiences is not necessarily positive for consumers,” says SABMiller’s communications manager, Michael Farr.

Further financial constraints on the broadcaster is the imminent launch of two new television channels — SABC 4 and SABC 5.

Kganyago says the new channels will be launched as soon as the funding model is approved by government.

Kupe maintains that instead of using funding for these new channels, the broadcaster should use it to add more official language broadcasting to the three existing channels.

At a recent colloquium, Mpofu touted the establishment of an SABC trust fund created by a levy on private-sector broadcasting revenue. The idea, if implemented, is based on the premise that the SABC disposes of its commercial arm, which includes radio stations 5FM and Metro FM.

Berger says one possible scenario is that all commercially viable stations be privatised “but with substantive public-service obligations on them, leaving SABC with fully subsidised stations that do not compete for advertising”.

However, Kganyago says the disposal of the broadcaster’s commercial operations is not a practical solution.

Instead, he contends that the SABC needs to “strengthen its public commercial service division so that it can fulfil the legislative intention of subsidising the public service broadcasting division and provide an additional internal source of funds”.

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Funding challenge for SABC as it takes on public role