South Africa’s TV licence failure

Communications minister Solly Malatsi says South Africa’s TV licence collection regime has failed, given the high delinquency rate among households and businesses.

In its previous financial year, the SABC’s TV licence compliance rate stood at 13%, down from 31% five years ago.

Therefore, 87% of TV licence holders did not pay their fees in the SABC’s previous financial year.

TV licence revenue stood at R741 million in 2023, R3.76 billion short of what the SABC had billed.

The delinquency rate only measures those people the SABC billed and refused to pay. It excludes anyone who has never held a TV licence despite owning a TV.

Had the compliance rate been around 40% or more, South Africa’s public broadcaster would have been close to breaking even or making a profit instead of recording a R1.13-billion loss in 2022/23.

Historical TV licence debt has also climbed to over R44 billion, with at least 9.2 million defaulters as of last year.

In addition to declining TV licence revenue, the SABC’s advertising revenue has also seen year-on-year decreases.

During its past five financial years, the SABC’s advertising has dropped over 40% from R4.47 billion to R2.61 billion. DStv and eMedia have seen their advertising revenues increase over the same period.

With South Africans refusing to pay their TV licence and advertisers spending less with the SABC, it raises questions about how to fund South Africa’s public broadcaster.

Malatsi recently told MyBroadband that he has some wild ideas about improving the SABC’s financial position.

“These are just ideas. This is not a policy decision, so it mustn’t come across like it’s a policy announcement,” Malatsi said.

He said government already had systems in place to collect outstanding money from citizens.

“For instance, you can’t renew your driver’s licence if you have outstanding fines and an enforcement order against you,” said Malatsi.

“If you’ve got multiple vehicles, you can’t renew the one without settling fines on the other, because those things are coordinated and integrated with eNatis.”

Malatsi said there are opportunities to interlink the SABC’s TV licence to other licence fees to ensure it is collected.

However, while he has ideas for improving TV licence collections, he also did not let the SABC off the hook.

“I think it’s unfortunate that the TV licence collection regime has collapsed to this extent,” he said.

“The SABC needs to be far more creative. Broadcasting is evolving and it’s highly competitive. What gives broadcasters the edge is the quality of their content in addition to how stable they are being run.”

Malatsi said he believes good governance is being restored at the executive level by the SABC’s current board and CEO.

“What is clear, given its current situation, is the expectation that the SABC can rely on bailouts from Treasury to meet some of its pressing and immediate is not going to be realistic with the financial times of our country,” said Malatsi.

“That is why the Treasury — and also the President in this instance — has been adamant in saying that where it is possible, explore public-private partnerships for state-owned enterprises,” he continued.

“This is so state-owned enterprises, be it the Post Office, or the SABC, can be commercially viable — to the extent that they are self-reliant.”

Malatsi’s comment that the SABC’s TV licence collection regime has failed echoes the sentiments of the Organisation Undoing Tax Abuse (Outa).

Malatsi’s predecessor and current deputy minister, Mondli Gungubele, published a proposed law last year that broadcasting sector commentators had hoped would address the problems with SABC TV Licences.

Instead, the law would give the minister three years from its commencement to develop a new funding model framework for the SABC.

“The bill has effectively kicked the funding can down the road by not laying out any specific changes or proposals,” said Outa senior legal project manager Andrea van Heerden.

“Instead of the bill dealing with the SABC’s financial crisis, TV licences remain, and deliberations on a new funding model are kicked down the road for three years,” Van Heerden stated.

“Moreso, the Minister of Communications and Digital Technologies, in consultation with the Minister of Finance, alone is tasked with identifying a new funding model.”

Outa has advocated for Parliament to refer the SABC Bill back to the department for amendment.