Goodbye TV licence — This is what could replace it

With less than one in every five TV licence holders in South Africa paying their fees over the last year, several proposals are on the table for a new way to fund the struggling SABC.

The public broadcaster’s TV licence revenue has nose-dived, with fewer TV licence holders willing to pay the R265 annual fee for possessing a TV set.

Payment compliance dropped from 31% in March 2019 to 18% by March 2021. Only about 2 million out of more than 10 million TV licence holders paid their fees in the last year.

The situation has worsened due to the Covid-19 pandemic, which has made it more difficult for people without Internet access or the means to transact online to travel to pay-points.

Many households have also taken an income hit, and with the SABC’s collection efforts rather lacklustre, delinquent viewers likely don’t see paying a TV licence as a priority.

In its dire financial dilemma, it is also too expensive for the SABC to send TV licence inspectors to homes.

The broadcaster’s debt collectors also appear to have failed to bring compliance back to the required levels.

Most stakeholders agree that the SABC plays an essential role in keeping the general public, particularly those without broadband access or the ability to afford pay-TV, informed on current events that affect their lives.

The government aims to address the SABC’s funding, along with other issues in the rapidly-changing broadcasting industry, through new legislation that has been outlined in the Draft White Paper on Audio and Audiovisual content services.

Various stakeholders in the industry — including the SABC, eMedia, MultiChoice, and Netflix — responded to its contents during public hearings in May and June 2021.

These included several suggestions for alternative funding to replace the TV licence, which are summarised below.


Household levy 

The SABC wants a technology-neutral household levy to be collected from the public by the dominant subscription broadcaster, currently MultiChoice, but in future could be a streaming service like Netflix.

The SABC said that MultiChoice’s 8 million DStv subscribers in its billing system would make it easy to collect the licence fee.

“The collection of the licence fee from subscribers, per household, is not an onerous requirement from a systems point of view,” the SABC stated.

The SABC will then collect the outstanding fees from households that aren’t DStv or Netflix subscribers.

In addition to its current collection methods, the SABC said it would use a more efficient digital collection method, using the SABC’s digital broadcasting and OTT services.

SABC logo black white


New taxes

As a counter-proposal, MultiChoice has suggested the outdated TV licence model be scrapped in favour of a more effective ring-fenced public broadcasting levy that the South African Revenue Service (Sars) must collect.

“As MultiChoice’s financial modelling shows, a flat rate for TV licence fees collected by Sars would far exceed the television licence fees that the SABC collects,” MultiChoice said.

“In FY18/19 if Sars had collected the R265 TV licence fee from taxpayers, it would have raised R5.9 billion in total revenue for public service broadcasting, as compared to the total revenue of R968.1 million collected by the SABC.”

MultiChoice firmly opposed that subscription broadcasters or on-demand services be required to collect TV licence fees.

“Such a requirement is fraught with problems, both at the level of principle and practical implementation,” Multichoice said.

“Such an obligation would be out of line with international best practice and completely inappropriate and unfeasible, and should not be given any serious consideration,” it added.

Netflix agreed with this, stating it would be “wholly inappropriate for the SABC to cede any part of its public service mandate to private sector actors.

MultiChoice


Government grant 

Civil action group Outa has proposed a regular grant funded by cutting wasteful expenditure in other programmes that could cover part of the SABC’s running costs.

“We are advocating for the SABC to be funded with a government subsidy, so we don’t need TV licences which are uncollectable,” said  OUTA executive director Stefanie Fick.

“It will provide a more stable revenue stream and, in conjunction with good governance and management, will avoid the irregular and disastrous last-minute bailouts.”

Alternatively, Outa believes TV licences should be treated as a tax through a money bill passed by Parliament instead of a decision made solely by the communications minister.


Privatise it

The Free Market Foundation blames the SABC’s financial situation on mismanagement and does not want the state’s coffers to fund the SABC at all.

“The funding model that will ensure the sustainability of the SABC will be for it to be privatised,” the FMF stated.

The FMF wants the new policy to bar it from bailouts from the public purse.

It believes the SABC should not receive funding from taxpayers, like every other business.

Failure to achieve sustainability as a private business would imply that South Africans are not interested in what the SABC offers.


Now read: Good news for digital TV in South Africa

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Goodbye TV licence — This is what could replace it