The SABC and Department of Communications and Digital Technologies’ plan to force DStv subscribers to pay TV Licences could be highly damaging to South Africa’s largest pay TV broadcaster, which is already getting hammered by streaming services.
The proposals for TV Licence amendments have been detailed in the White Paper on Audio and Audiovisual Content Services Policy Framework, and more recently discussed during a Portfolio Committee on Communications meeting in Parliament.
According to the proposed regulations, MultiChoice would either be required to have DStv decoder buyers present a TV Licence upon purchase or when they subscribe to its service.
DStv currently carries the SABC’s free-to-air channels on all of its packages, which are used by more than 8.7 million customers in South Africa alone.
However, SABC CFO Yolande van Biljon has told Parliament that only around 2.5 million of the 9.5 million TV licence holders on its database settled their TV licences last year.
That implies that the vast majority of DStv subscribers are not paying their TV licences, despite having an active service.
On this basis, a move to make TV Licences compulsory for DStv subscribers could bolster collections significantly.
Even assuming that all 2.5 million paying TV licence holders are DStv customers, 6.2 million others would not be paying their TV licences.
In theory, having these customers pay would add more than R1.6 billion to the SABC’s coffers, effectively turning it into a profit-making entity.
Piggybacking off private companies
However, TV broadcasting analyst and journalist Thinus Ferreira has slammed this plan as another example of the abject failure of South Africa’s public broadcaster to do its own job and to piggyback on private companies.
“The SABC has been lazy and incompetent and now wants to grab onto private companies who have kept up with the times to use their power to drag itself out of its financial quagmire,” Ferreira said.
“The SABC imploded its own TV Licence base with mismanagement, corruption and bad decisions over decades and now wants to grab whatever information and other resources it can get in the form of private companies’ consumer data and information to leech off of that because it didn’t keep its own information up to date,” Ferreira said.
According to Ferreira, the new regulations will have significant consequences for the sales of decoders in particular.
“Pay TV providers like StarTimes SA and MultiChoice will get shackled in terms of decoder sales and decoder upgrades if consumers must prove they have a valid SABC TV Licence or must take out one in store,” Ferreira said.
Doing things in reverse
Ferreira stated that the SABC was approaching the entire process by which consumers become pay TV subscribers in reverse.
The typical TV owner starts as a free-to-air viewer, he said, where it is the SABC’s responsibility to capture them at the point of sale of a TV set.
“If you buy a dishwasher you are progressing because you already have a kitchen sink at home. Now when want to buy the dishwasher you are forced to show proof that you have access to running water.”
Ferreira said it will be extremely damaging to not only pay TV providers like MultiChoice or StarSat to be forced to add or verify SABC TV Licence requirements, but also to streaming services like Netflix, Showmax, VIU, and Amazon Prime Video.
“There will definitely be existing subscribers who won’t want to prove they have a licence and will cancel their pay TV subscription, as well as potential people who might sign up for a pay TV or streaming service or want to buy a better decoder who won’t because of the added hassle of having to show a SABC TV Licence.”
“To what degree compulsory proof of a valid SABC TV Licence might dampen either new sales or new subscribers or increase churn – existing subscribers who cancel and leave – remains to be seen,” Ferreira added.
Learn from the BBC
Ferreira maintained the SABC should follow the example of the UK’s public broadcaster the BBC by rather launching its own streaming service, app, or platform to offer its content on demand.
TV Licence holders can then use their licence number to sign up and log into the service.
“The SABC should behave like a public broadcaster like the BBC who has control of its licence fee division, gets money from viewers through its iPlayer and in annual fees and doesn’t force private companies to tack on licence fees on its behalf,” Ferreira stated.
“People who want the SABC’s content will make sure they have a valid licence for it, Ferreira said.