How DStv can help the SABC fix its TV licence problem

The SABC recently admitted it is has seen an increase in non-compliance by TV licence holders which hurt its revenue in 2020.

In a presentation to Parliament, the broadcaster revealed TV licence cash collections between 1 April and 31 July 2020 amounted to R228.05 million, with a shortfall of R166.99 million (42.3%).

It outlined plans to recover licence fee revenue in South Africa – which include new marketing campaigns, developments in technology requirements, campaigns to increase debit orders, and settlements of licence fees in arrears.

The SABC also claimed it continually pursues TV licence fee collections on a monthly basis despite all the challenges faced.

A more controversial proposal previously made by former acting SABC CEO James Aguma was that South Africa’s biggest pay-TV broadcaster – DStv – should collect TV licence fees on behalf of the SABC.

While the Broadcasting Act does not dictate that DStv is responsible for ensuring its customers pay TV licences, its massive subscriber base and reach means it could be well-positioned to assist the SABC in this regard.

How DStv could help

Under a distribution agreement, SABC’s free-to-air (FTA) channels are available on all of DStv’s packages – including its cheapest EasyView offering.

This is a noteworthy figure to consider when looking at TV licence payment compliance in South Africa.

In its previous annual report for the 2019 financial year, the SABC said it only collected payments from 2.9 million of the 9.4 million licence holders on its database.

Even in a best-case scenario where we assumed that all those who paid their TV licences in 2019 are also DStv subscribers, it would still be less than half of the broadcaster’s customer base.

It is therefore clear that many DStv subscribers are using a TV and are able to watch SABC content without paying a TV licence.

MyBroadband spoke to William Bird from Media Monitoring Africa and independent media analyst Nozi Dikgale about the relevance of TV licences in South Africa.

We also asked the analysts what the SABC must do to collect more revenue, and if some sort of partnership with MultiChoice could improve TV licence collection rates.

Why people aren’t paying TV licences

Dikgale said she expects the SABC’s shortfall in TV license collections to increase as the economic conditions in South Africa worsen in the upcoming months.

Bird said there were numerous reasons why South Africans were not paying their TV licences.

Internally, the broadcaster has been lurching from crisis to crisis, he said.

Additionally, there has been a big increase in access to digital platforms and services, which means people have been able to get SABC content without the need for a licence.

“We also had the high cost of collections and some stories I recall that pointed out how some of the service providers simply weren’t doing their jobs properly,” he added.

Bird also claimed that government had handed out set-top boxes for digital broadcasts to people who did not possess TV licences.

“So you had the state to a degree tacitly supporting non-payment – and a breaking the law,” Bird said.

Another major factor is that the R265 annual fee is quite expensive for the poor in South Africa.

Why TV licences are still the best way

Despite the issues with collecting TV licence fees, both Bird and Dikgale believe it is still the best model for collecting revenue for free-to-air broadcasts in South Africa.

Dikgale noted that in the current television landscape in South Africa, FTA still has the widest reach.

“Despite the competition that SABC faces from OTT players such as Netflix, Facebook, YouTube, and more, the most watched TV shows in the country are from SABC channels and eTV,” Dikgale said.

“Its purpose is to support public service content. That is a public good and one that all who support a democracy should support,” Bird said.

“While they are not ideal, they are there, as is the law. To help get the SABC out of its current criss they need people to pay, but to do that they need to be properly managed, they need credibility, and local content.”

“Sadly I don’t think there is sufficient political will for real independent sustainable funding,” Bird added.

New funding models

Dikgale said monetisation of SABC content on digital platforms was one way to expand the broadcaster’s funding model.

“The SABC can also look at other digital distribution partnerships to expand their content reach to  generate additional revenue,” she added.

Bird said another possible alternative is a public service content fund that is supported by big corporations – including social media platforms.

This fund could be launched with the high demand frequency spectrum auction, which is due to take place by the end of March 2021.

However, he said the SABC was being blocked from making the necessary structural changes to be able to operate efficiently in the digital space.

“Many public broadcasters are going through huge changes and big reductions, yet the SABC is being prevented from trying to reduce staff costs.”

The ANC previously warned the broadcaster not to cut jobs, as it would embarrass the governing party.

Possible DStv collaboration

The SABC did not respond to a request for comment on whether it would consider working with MultiChoice to collect its licence fees.

MultiChoice told MyBroadband the TV Licence Regulations does not apply to parties who provide broadcasting services, nor any other secondary devices that work in conjunction with a TV.

It did not provide feedback to a question over whether the SABC had approached it to assist in the collection of TV licence fees.

Dikgale expressed doubts over the possibility of a partnership between MultiChoice and the SABC for the collection of TV licence fees.

“DStv would not benefit from that particular deal, because it has nothing to gain,” Dikgale said.

Bird disagreed and noted such an agreement could be beneficial to both parties.

“One of the ideas we as MMA and the SOS [a Public Broadcasting Coalition] have been putting forward is that DStv has excellent infrastructure for collection of fees and services,” Bird said.

“If half of DStv’s subscribers could pay their TV licences it would bring in just over R1 billion,” Bird said.

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How DStv can help the SABC fix its TV licence problem