SABC’s existential threat

Failing to address the South African Broadcasting Corporation’s (SABC’s) funding model could force the public broadcaster into an existential crisis.

This is according to Portfolio Committee on Communications and Digital Technologies chair Khusela Sangoni, who spoke to SABC News and reiterated the need for an urgent review of the broadcaster’s funding model.

The SABC generates up to 83% of its revenue from selling airtime, content exploitation, and advertising. Sangoni said the SABC receives 56% of its funding through government grants and TV licences.

Of the 56%, government grants account for 45% and TV licence revenue accounts for 11%.

While its financial situation is improving, the public broadcaster has been loss-making since the 2014/15 financial year.

It most recently reported a loss of R1.13 billion in 2023/24. The SABC expects to reduce its losses to R590 million at the end of the current financial year.

The broadcaster says its current budget reflects “an SABC in financial distress”.

In a recent meeting between the committee and the public broadcaster, Sangoni said the committee fully supported reworking the SABC’s funding model.

The committee also supports greater public funding for the broadcaster. However, she requested that the SABC and Department of Communications and Digital Technologies (DCDT) give it additional funding options to consider.

“We’re in the process of looking at the bill to see if there are legislative requirements that need to be effected,” she added.

Despite the fact that no decision on the public broadcaster’s funding has been made, the SABC is confident that it will return to profitability by March 2028.

In documents presented to the portfolio committee, the SABC says it expects to go from a loss in March 2027, to a profit of R907 million in March 2028.

The public broadcaster told MyBroadband that it can’t share specifics regarding its plans as they are commercially sensitive. However, it revealed that it plans to reduce the anticipated R590-million loss in March 2025 to R243 million by March 2026.

“The SABC has a commercial strategy and corporate plan geared towards the financial recovery of the entity,” it said.

“Our key priority initiatives to protect current revenues and drive sustained growth are subject to funding.”

Part of the SABC’s plan to return to profitability likely includes its recently revamped streaming platform, SABC+.

During the portfolio committee meeting, the public broadcaster revealed that it has yet to monetise the streaming platform. It believes SABC+ will accumulate more than half a million users by March 2025.

TV licence alternatives

If the SABC had a more efficient mechanism for collecting TV licence payments, the revenue generated would likely amount to far more than the 11% it currently contributes.

Many South Africans have actively avoided paying their TV licence fees, with evasion rates climbing from 69% in 2019 to 87% in 2023/24. This means only 13% of TV licence holders paid their fees in the last financial year.

To this end, it generated R741 million in TV licence revenue in 2023/24, R3.76 billion less than it billed.

A promising alternative to the current TV licence scheme would be to introduce a household levy that must be paid if households can access SABC services, regardless of whether they use them.

The SABC has voiced its support for the scheme on several occasions. It initially said the country’s dominant pay-TV players — Netflix and MultiChoice — should collect the fees on its behalf.

However, it appears to have changed its stance on how the levy should be collected.

In recent feedback to MyBroadband, it said no collection method or agency can be considered until the relevant regulations are established.

South Africa’s communications minister, Solly Malatsi, also has some ideas for fixing the SABC’s funding model.

During an interview with MyBroadband, Malatsi noted that the country already has established systems for collecting money from citizens.

“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,” the minister said.

Malatsi said there could be an opportunity to link the TV licence to other licence fees to ensure collection.

However, he emphasised that these were just “wild ideas”, and not official policy announcements.