{"id":817262,"date":"2025-03-18T08:13:10","date_gmt":"2025-03-18T06:13:10","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=817262"},"modified":"2025-03-18T08:15:03","modified_gmt":"2025-03-18T06:15:03","slug":"tv-licence-warning-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/media\/817262\/tv-licence-warning-in-south-africa\/","title":{"rendered":"TV licence warning in South Africa"},"content":{"rendered":"\n

As the government weighs its options to cover the lost revenue from TV Licence failures in South Africa, industry experts warn that imposing a new streaming tax may backfire spectacularly.<\/p>\n\n\n\n

This is because streaming services like Netflix, Disney+ and Amazon Prime are unlikely to absorb the cost of such a tax and would likely pass the levy on to subscribers through higher monthly fees.<\/p>\n\n\n\n

With South African consumers already under immense pressure and entertainment being one of the first budget items cut to reduce spending, the levy may hurt the wider industry.<\/p>\n\n\n\n

The SABC’s TV licence regime has been a dismal failure in South Africa, with less than 20% of South Africans with a licence paying the annual fee.<\/p>\n\n\n\n

The cost of chasing down those who do not pay is also higher than the revenue the broadcaster will get from them paying their fees.<\/p>\n\n\n\n

This has led to a debate about how the government can fund the state broadcaster in a stable and sustainable way.<\/p>\n\n\n\n

Communications Minister Solly Malatsi said that his department is looking for an alternative funding plan that will not burden households more.<\/p>\n\n\n\n

However, one of the proposals that has gained the most attention among stakeholders is the so-called streaming levy or media subscription levy.<\/p>\n\n\n\n

This would shift the burden of funding to local and international streaming platforms and other media groups, such as MultiChoice and eMedia, to fund the SABC.<\/p>\n\n\n\n

Malatsi said he does not support a direct tax on households as they are already constrained.<\/p>\n\n\n\n

Reach Africa’s sales director, Leslie Adams said the biggest concern with this type of levy is that consumers may ultimately pay anyway.<\/p>\n\n\n\n

He said that streaming services absorb levies as part of their operating costs in some countries, but this is unlikely to be the case in South Africa.<\/p>\n\n\n\n

“We\u2019ve already seen Netflix, Amazon Prime and Disney+ increase their prices multiple times in the past few years,” he said.<\/p>\n\n\n\n

“If this levy goes ahead, chances are high that South Africans will be the ones covering the cost through higher subscription fees<\/strong>.”<\/p>\n\n\n\n

Streaming levy plan could backfire<\/h2>\n\n\n\n
\"\"<\/a>
Reach Africa’s Leslie Adams<\/figcaption><\/figure>\n\n\n\n

Adams said that the poor economy and budget strain have already caused many South Africans to cut back on entertainment spending. <\/p>\n\n\n\n

Household finance surveys show that streaming and entertainment services are already the first to go when considering ways to save costs.<\/p>\n\n\n\n

This was reflected in both the NedFinHealth survey and Old Mutual Savings & Investment Monitor (OMSIM) for 2024.<\/p>\n\n\n\n

Cost saver<\/th>NedFinHealth<\/th>OMSIM<\/th><\/tr><\/thead>
Switch to cheaper streaming<\/strong><\/mark><\/td>30%<\/strong><\/mark><\/td>32%<\/strong><\/mark><\/td><\/tr>
Switch to cheaper supermarket brands<\/td>30%<\/td>30%<\/td><\/tr>
Cutting down domestic help<\/td>11%<\/td>29%<\/td><\/tr>
Cutting down cellphone and data<\/td>30%<\/td>27%<\/td><\/tr>
Cutting gym subscriptions<\/td>30%<\/td>26%<\/td><\/tr>
Putting major purchases on hold<\/td>25%<\/td>22%<\/td><\/tr>
Maintain rather than replace big items<\/td>25%<\/td>22%<\/td><\/tr>
Cashing in investments\/saving early<\/td>28%<\/td>15%<\/td><\/tr>
Downgrade rented property<\/td>–<\/td>14%<\/td><\/tr>
Moving children to cheaper school<\/td>–<\/td>13%<\/td><\/tr>
Switching or trading down vehicle<\/td>–<\/td>12%<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n

Adams said that if prices rise again, more people might turn to illegal streaming, free ad-supported content, or even ditching paid services altogether.<\/p>\n\n\n\n

A streaming levy could work in South Africa, but only if it doesn’t make streaming unaffordable.<\/p>\n\n\n\n

“The levy must be reasonable. If it\u2019s too high, streaming platforms will pass the cost onto consumers or cut local investments, hurting viewers and the industry,” he said.<\/p>\n\n\n\n

While companies like Netflix, Amazon Prime and Disney+ are unlikely to leave the South Africa because of the levy, they could end up scaling back their operations, reduce local content investments or bundle the costs in a way that makes streaming less affordable for South Africans. <\/p>\n\n\n\n

Adams said that streaming services already face high costs in South Africa, where bandwidth isn\u2019t cheap, and many platforms partner with telecom providers to keep data costs manageable. <\/p>\n\n\n\n

“Adding another tax into the mix could make things even more complicated,” he said.<\/p>\n\n\n\n

Different streaming models must also be considered, as a flat tax won\u2019t work for platforms that operate differently. <\/p>\n\n\n\n

“Additionally, private broadcasters like MultiChoice and eMedia could also contribute, as a local content levy for these broadcasters would ensure that funding responsibility is shared more equitably, rather than placing the entire burden on global streaming platforms,” Adams said.<\/p>\n\n\n\n

Importantly, the tax would be better received if the funding raised went back into the local industry rather than the government budget’s black hole.<\/p>\n\n\n\n

The SABC fell into financial trouble because of the failed TV licence regime, its own mismanagement, and political interference over the years.<\/p>\n\n\n\n

Adams said that the broadcaster would have to prove that it can manage funds responsibly.<\/p>\n\n\n\n

“Before imposing a new tax, the government must fix inefficiencies and ensure transparency so this revenue benefits South African content producers,” he said.<\/p>\n","protected":false},"excerpt":{"rendered":"

Introducing a streaming or media subscription levy to replace TV licences in South Africa could backfire in a big way if not handled correctly.<\/p>\n","protected":false},"author":10,"featured_media":808876,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5554],"tags":[22048,22047,667,20317,10881],"class_list":["post-817262","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-media","tag-leslie-adams","tag-reach-africa","tag-sabc","tag-solly-malatsi","tag-tv-licence"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/817262","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=817262"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/817262\/revisions"}],"predecessor-version":[{"id":817306,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/817262\/revisions\/817306"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/808876"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=817262"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=817262"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=817262"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}