Big drop in TV licence payments as SABC pushes for new ways to collect

The South African Broadcasting Corporation (SABC) tabled its 2019/20 annual report in parliament on Tuesday (17 November), showing a further decline in people paying TV licence.

The broadcaster said that the TV licence revenue declined by 18% year-on-year to R791 million due the delayed use of debt collection agencies in this period.

“This resulted in only 24% of the total licence fees billed being realised as revenue, compared to 31% for the year ended 31 March 2019.

“As part of an overall policy review, the SABC is currently finalising proposals to government on the future collection of a public broadcasting levy, taking into account differing public views on this issue as well as international best practice,” it said.

New ways to collect

In an op-ed published at the start of November, the SABC’s head of TV licences Sylvia Tladi said that changes need to be made to South Africa’s broadcasting regulations – including an expanded definition of a ‘TV set’ or now, a broadcasting device.

Some of the devices which are being considered under this expanded definition include:

  • Laptops;
  • Tablets;
  • IPTV;
  • Internet;
  • Decoders;
  • Set-top boxes;
  • Smartphones.

Tladi said that these devices, which have resulted in new media platforms and content dissemination channels, have a direct impact on TV licence legislation.

She said that the SABC’s submission also calls for an overhauled TV licence fee system and changes to the legislation regarding public funding strategies envisaged by TV licences.

“To ensure maximum compliance with legislative requirements concerning the payment of TV licence fees, the SABC proposes that the act should place stricter obligations on all relevant stakeholders or role players because the ‘traditional’ television set is no longer the only means of receiving a television broadcast.

“Therefore, to administer compliance on the payment of licence fees, the SABC is of the view that other entities must be compelled to report on the sale, lease or usage of these ‘television sets’ or ‘viewing devices’.

Bleak figures 

The drop in TV licence revenue combined with lost advertising revenue during the coronavirus lockdown meant that total revenue declined by 12% year-on-year to R5.7 billion.

At the end of March 2020, the Corporation reported a net loss of R511 million, a 6% decline compared to the previous year, but a 20% better performance against budget.

Other key financials from the report show:

  • A 28% decline in content investment and a 16% decline in other operational expenditure. Despite this, the Cost-to income ratio of 110%;
  • Total expenses were under budget by 23% or R1.8 billion;
  • The settlement of long outstanding creditors reduced trade and other payables by nearly 50%, with creditor payment days closing the year at 51 days, which was at 143 days as at 31 March 2019;
  • Cash on hand as at 31 March 2020 amounted to R2.1 billion, a marked improvement from the R73 million as at 31 March 2019;
  • The broadcaster reported a decline in year-to-year irregular expenditure of 40%, amounting to R202 million, compared to R336 million for the year ended 31 March 2019;
  • Year-on-year fruitless and wasteful expenditure decreased by 87% to R27 million, with R26 million of that incurred from interest and penalties due to late payments caused by cash flow constraints.

“The SABC has taken bold and decisive steps in implementing the approved turnaround plan,” it said.

“Notwithstanding difficult economic conditions, the SABC remains on track to achieve financial sustainability and will continue to fulfil its public mandate of educating, entertaining and informing the nation for generations to come.”

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Big drop in TV licence payments as SABC pushes for new ways to collect