SABC at risk of collapse

The City Press has reported that the SABC is in deep financial trouble – and the broadcaster is on the brink of collapse.

Citing confidential documents, the City Press said revenue for the previous financial year was well below budget. This year it is expected to be R2 billion.

This forced the state broadcaster to continue with its retrenchments, despite the ANC’s resistance to cutting jobs.

In June this year the SABC issued a notice of possible redundancies following consultations with key stakeholders.

The SABC said at the time the notice of redundancies will impact approximately 600 employees.

The organisation has now met with unions again to discuss a way forward to prevent the collapse of the organisation – highlighting that it has a bloated workforce and has to become more efficient to become sustainable.

These comments follow complaints from the SABC about policies and regulations that tied its future growth to the Digital Terrestrial Television (DTT) migration project.

The public broadcaster said it operated in a highly-regulated environment and that existing policies have had a negative effect on its business model.

The Broadcast Digital Migration Policy of 2008 compels the SABC to use 84% of DTT, which the company said results in an environment that is “grossly anti-competitive”.

“Our competitors can scale and reach a larger audience at substantially lower distribution costs and time to market,” the SABC said.

“The barriers for entry are greatly reduced and more global and local OTT players are entering a less regulated environment.”

Major global and local OTT players in South Africa include Netflix and Showmax, both of which have grown significantly as adoption of Internet streaming services continue to rise.

This plea echoes the SABC’s complaint around local policy, which it voiced last year when it said it wanted to launch a streaming service to compete with Netflix and Showmax.

The broadcaster said at the time that it aimed to put all of its content on its own streaming service, adding that it had developed an integrated OTT strategy with the goal of developing or acquiring its own streaming platform.

“This will allow the SABC to control its own destiny into the future,” the SABC said.

Now read: South Africans are not paying for TV licences – Here is the SABC’s plan

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SABC at risk of collapse