Goodbye TV licence — South Africans voting with their wallets
The SABC has released its annual report, revealing that more than 80% of South African TV licence holders did not pay their yearly fees over the past financial year.
The public broadcaster tabled its latest annual report in Parliament on Tuesday, stating that TV licence revenue had declined by 0.4% to R788 million.
“This resulted in only 18% of the total licence fees billed being realised as revenue, which is very similar to that realised for the year ended 31 March 2020,” the SABC said. Last year, the SABC said only 24% of its total licence fees billed were paid.
Stated differently, the SABC faces an increasing TV Licence delinquency rate that has gone from around 76% in March 2020 to 82% in March 2021.
The SABC said that online payments had increased by 26% year on year, while numerous initiatives to simplify the payment process were being rolled out.
These figures do not consider the suspected millions of households with TVs of which the SABC is unaware.
At the same time, the SABC’s advertising revenue plummeted by R740 million, an 18% decrease.
SABC Television was hit by the most significant loss, with a drop of R600 million in revenue.
The broadcaster blamed the drop in advertising revenue on the depressed economy compounded by the effects of the Covid-19 pandemic, lack of marketing, and declining audiences.
The retrenchment of 877 permanent employees also cost the SABC R177 million in once-off severance packages, although the broadcaster overall employee costs for the year were reduced.
The SABC once again received a qualified audit opinion on its report from the Auditor-General of South Africa (AGSA).
The broadcaster reported that irregular spending had dropped from R202 million in 2019/2020 to R111 million in 2020/2021.
The AGSA said the irregular expenditure resulted from payments made in contravention of supply chain management legislation and regulations.
It also stated that the SABC had failed to “implement adequate procedures in the past to identify and record all instances of irregular expenditure from prior years and the possible impact of these transactions on the ongoing multiyear contracts concluded in those years”.
The SABC said only 10% of its irregular spending related to transgression in the financial year under review and 90% was from legacy multi-year contracts.
The losses in revenue and irregular expenditure contributed to a rise in a net loss at the public broadcaster to R530 million, about R20 million more than in the 2019/2020 financial year.
Based on the R265 licence fee per holder, the SABC would have made a substantial profit had TV licence payment compliance been at just 50% of its base.
At 100% compliance, that profit would have been into the billions of rand.
South Africans have increasingly resisted the TV licence regime following years of corruption and maladministration at the entity.
In addition, many have moved to video streaming services and rarely still access the broadcaster’s channels, mistakenly under the impression that this exempts them from paying the fee.
To address the changing broadcasting industry and migration of consumers to digital platforms, the SABC has been pushing for a technology-neutral public broadcasting levy that every South African household must pay to fund its operations.
The broadcaster stated this household levy should be based on the ability to access the SABC’s services rather than the actual use of its services.
It wants this fee to be collected, in part, by the country’s dominant pay-TV broadcaster, which is currently MultiChoice.
MultiChoice has rejected this and proposed that the TV licence fee be replaced with a new tax to be collected by the South African Revenue Service.
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