The South African Broadcasting Corporation’s (SABC) forecast for the remainder of the 2022/23 financial year paints a bleak picture for the broadcaster, with overall revenue coming in at R1 billion below budget.
SABC chief financial officer Yolande van Biljon said the grim forecast is primarily due to underperformance in advertising revenue and TV licence fee collection.
The SABC presented its forecast during a sitting of the portfolio committee on communications held on Tuesday, 29 November 2022.
“The projected de-risk loss at this point amounts to an anticipated R608 million versus the budgeted profit for the year of R64 million,” Van Biljon said.
“The main reason is the consistent underperformance in our advertising revenue as well as TV licence revenue which has consistently also not lived up to expectations.”
The SABC stated that its overall revenue is around 27% below budget for the year to date.
The SABC also said the savings expected from the analogue switch-off haven’t materialised, with distribution costs running higher than it had budgeted.
The last statement from communications minister Khumbudzo Ntshavheni on South Africa’s digital migration was that she would announce a new deadline after September 2022.
However, three months later, South Africans still don’t know when the switch-off of the country’s old analogue TV signals will occur.
Van Biljon also said the SABC’s primetime audience continues to shrink.
In May 2022, the broadcaster revealed that its declining audience contributed to R600 million in losses over the past two years.
“The decline in audience is multi-causational and is a global trend, and there is not much that can be done about that,” SABC COO Ian Plaatjes said.
Van Biljon added that the SABC attributes its shrinking audience to viewers’ migration to online platforms.
To expand its offerings and potentially get some of its audience to return, the SABC launched its streaming service — SABC+ — in November 2022.
SABC+ is a rebranding of the TelkomOne streaming service on which the two companies had partnered.
SABC group chief executive officer Madoda Mxakwe said the service signalled “a new digital era for the SABC and a key accomplishment in addressing universal access for all citizens”.
The broadcaster first announced that it was planning to launch an over-the-top platform in October 2020.
Before that, in 2013, signal distributor Sentech said it was working on a video streaming app for South Africa similar to BBC iPlayer.
TV licence fee evasion hurting the SABC
TV licence fee collections have been problematic for the public broadcaster for some time, with licence fee evasion rates climbing since 2019.
“Overall, 2,2m (2020: 2,5m) licence holders managed to settle their television licence fees in full or in part against a known database of 10,3m (2020: 9,5m) television licence holders,” the broadcaster said in its 2021 annual report.
“The licence fee collection rates indicate an evasion rate of 82% (2020: 81%.).” The licence fee evasion rate sat a 69% in 2019.
The SABC said it had rolled out several initiatives to get its customers to pay the fees.
Its latest plan involves launching a TV licence rewards programme, which the SABC hopes will encourage client loyalty and compliance with TV licence legislation.
The broadcaster believes the programme could help lower TV licence fee evasion rates to ensure its financial sustainability.
The SABC has been trying to replace its current TV licence regime to help with the collection of fees, with the broadcaster and the African National Congress wanting to scrap TV licence fees in favour of a broadcasting household levy.
SABC board chairperson Bongumusa Makhathini said it is crucial for major players in the industry, like MultiChoice, to assist with collecting the levy.
While MultiChoice supports a device-independent and technology-neutral media levy, it said it must not fall to the SABC’s competitors to collect this levy and that government must manage the funds like any other tax.