The South African Broadcasting Corporation (SABC) is focusing on new sources of revenue and increased cost-cutting measures as it attempts to move away from its reliance on government bailouts.
Speaking to the Sunday Times, group chief executive officer (CEO) Madoda Mxakwe said this includes a 5% tariff increase on the current TV licence fee of R265. This would bring the new fee to around R278 per annum.
As part of its new strategy, Mxakwe said that the SABC would also invest heavily in new broadcast technology, renegotiate sports rights, and embark on a major marketing drive.
The SABC will also look at creating more local content, he said.
“We have not been able to invest in local content for many years, and this has affected our audience ratings and indirectly affected our revenue.
“We are in the business of driving eyeballs to our platforms, and the only way you can do that is to ensure you have compelling content.”
Following years of mismanagement, the SABC, like many other state organisations, relies on state funding in order to stay afloat.
At the start of October, communications minister Stella Ndabeni-Abrahams said that government would immediately transfer R2.1 billion to the embattled national broadcaster.
Ndabeni-Abrahams said that a further R1.1 billion will be transferred once it meets a number of preconditions as set by the National Treasury.
The bailout comes after the SABC said that it was technically insolvent and is struggling to honour payments to service providers and contractual obligations.
The broadcaster tabled its 2018/19 annual report in parliament at the end of September, showing a net loss of R482.4 million for the year ending March 2019.
The SABC also only collected R968 million in TV licence fees over the period, indicating a fee evasion rate of 69% of the known TV licence holders not paying their licence fees.
SABC group chief financial officer, Yolande van Biljon said that it ended the previous financial year with a cash balance of only R72 million.
“There are instances where we are unable to honour payments and even (unable) to adhere to committed contracts, which means we often need to renegotiate because we have been unable to meet the requirements.
“Currently, the organisation is technically insolvent. We are also under tremendous strain towards being factually insolvent as a result of our liquidity issues. Cash is depleted and the trade and other payables amount to R1.8 billion as at June 2019.
“There are a number of significant suppliers that make this up, notably Sentech (R554 million), our signal distribution provider; Supersport, Samro and various other content providers (amount to R174 million). We have monthly engagements with all these parties,” she said.