Major blow to TV licences in South Africa

The South African Broadcasting Corporation (SABC) revealed in a recent parliamentary presentation that even government departments have now ceased paying for TV licences.

This decline is contributing to a significant financial crisis for the beleaguered broadcaster, which reported a rise in unpaid licences over the past year.

As reported by City Press, SABC’s presentation indicated that the number of unpaid TV licences surged from 84% to 86% in the financial year ending March 2024.

Among the defaulters are approximately 2,500 TV sets owned by government departments, collectively accruing an outstanding licence fee of nearly R35 million.

Yolanda van Biljon, the SABC’s chief financial officer, noted that the corporation was expected to collect around R5 billion in licence fees, yet it only managed to bring in R726 million.

This sharp decline in revenue is compounded by a loss of viewers and a corresponding decrease in advertising income. In response, the SABC has cut R162 million from its content creation budget over the past year.

The SABC is facing an uphill battle in terms of financial sustainability.

Its 2023/2024 annual report revealed that the state broadcaster is technically insolvent.

“The impact of actuarial valuations on post-employment benefits since FY2020 has given rise to the negative equity reported in the Statement of Financial Position as of 31 March 2024,” it said.

Another name for negative equity is technical insolvency, which the state-owned enterprise must address to become sustainable.

Its audience is shrinking, and people who migrate to streaming services do not want to pay for TV licences.

To add insult to injury, the broadcaster is also grappling with a looming threat from Sentech, the state’s signal distributor, cutting off its radio and TV signals due to an outstanding debt of nearly R1 billion.

In an effort to stave off this crisis, Communications and Digital Technologies Minister Solly Malatsi facilitated a temporary agreement between the SABC and Sentech, allowing for a two-month reprieve during which the SABC will start paying its monthly bill of R51 million.

Adding to the urgency of the situation, the government is set to switch off analogue TV signals on December 31 as part of its transition to digital terrestrial television.

This change risks leaving many viewers without access to SABC channels, exacerbating the broadcaster’s already critical loss of audience and advertising revenue.

Nomsa Chabeli, head of the SABC, expressed grave concerns in Parliament about the potential implications of the analogue signal switch-off, warning that it could have “extremely serious implications for the SABC.”

Michael Markovitz, former SABC board member and head of the GIBS Media Leadership Think Tank, told Rapport that “the situation is critical and it’s encouraging that Parliament recognises the crisis over the broadcaster’s funding model. The situation requires an accelerated policy process which includes public participation for essential policy reform.”

Other plans to raise funds

To raise funds, the SABC also plans to abolish the TV licences and introduce a host of new levies as per new legislation.

It was estimated that over 9 million South Africans owe the SABC R44 billion in unpaid TV licence fees.

The South African Broadcasting Corporation Bill was introduced to Parliament in October 2023 and revived in July of this year, following the seventh administration’s swearing-in and the Government of National Unity (GNU).

Notably, there are no funding models in the Bill, which states that the minister of communications and digital technologies will have to develop a model for funding the SABC in three years.

During oral hearings on the Bill before the Portfolio Committee on Digital Technologies and Communications, the SABC suggested introducing a device-independent levy, essentially a household levy based on the ability to access the SABC’s services without having a TV.

The SABC also suggested being the dominant subscription broadcaster levy, where a dominant subscription broadcaster, such as MultiChoice, can assist the SABC.

In this levy, the dominant subscription broadcaster can deny customers a service unless they pay their licences.

The SABC also suggested that it access the Universal Service Fund (USAF), which is run by the Independent Communications Authority of South Africa.

The USAF received funds from broadcasters and telcos who pay a fee based on their annual turnover for universal services of electronic communications network services.

The SABC noted that Section 88(1) of the Electronic Communications Act allows broadcasters access to a USAF subsidy for constructing or extending electronic communications network services in under-serviced areas.

The SABC said it could thus use the USAF to finance its underfinanced public service mandate.

On to of this, the SABC earmarked auctioning off three pieces of land in Durban Central to raise funds.

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