SABC s Funding Model Options for the Future

1. 1 SABC’s Funding Model – Options for the Future Justine Limpitlaw Media Law Consultant Academic, University of Pretoria

2. 2 Purpose of this presentation SOS has few (any?) hard commercial broadcasting skill/expertise: SABC a huge corporation with massive budgets, large number of employees, difficult public mandate etc Requires a sophisticated/practical approach to the problem of public broadcasting: both funding/content issues We cannot stick to old modes of thinking in the light of: digital migration, international trends, convergence and new sources of content delivery eg cell phones, computers, etc Aim: to raise potential model(s) that will be controversial, devil’s advocate, puts the cat among the pigeons, stir debate etc

3. 3 Funding to follow function Key Issue: What the role of a public broadcaster should be? Total Citizen Empowerment: Creating SA citizens as assets for the country Overcoming legacy of apartheid Development of the unemployed, the unskilled, the poor Ability to engage in informed participation in our democracy: Requires: high quality, excellent news, information, current affairs, educational content Requires: mother tongue languages Nation Building: national identity, culture etc Fills in gaps from: commercial/community broadcasters

4. 4 Funding to follow function Key Issue: What the role of a public broadcaster should be? Developed countries: less critical need for a public broadcaster because of diversity of sources of information: radio, TV, Internet, commercial and community broadcasters ie the educated and the wealthy can choose/pay for their own sources of information Developing countries: public broadcasting critical because no/few sources of relevant info ie news, current affairs, local language content, educational content – PBS critical to empowering the public

5. 5 SABC’s Mandate/Funding Model SABC Mandate - most complex/difficult in the world given: 11 official languages Regional requirements Local content requirements Unclear Charter SABC Funding Sources: Commercial revenue (ads, sponsorship etc): 78% TV licence revenue: 17% Direct Govt funding: 2% Other: 3% Current crisis: SABC facing R500m loss this year! And SABC is using a commercial model to fund PBS

6. 6 International Trends Ofcom’s recent report on future of public broadcasting: Currently two broad models: BBC: no advertising – TV licence fee funded entirely (97% public payment of the TV licence) ie over 3 billion pounds annually Other operators with public mandates: Channel 4, 5, ITV etc Commercially funded But with public mandates ie local content, indep production etc but note no language requirements etc. Recognition: these other operator ie hybrid models simply not sustainable going into the future (within 3-5 years) options: Spread BBC funding amount more PBS operators OR They become purely commercial ie only BBC has public mandate requirements

7. 7 SABC Funding: options? Proceeding with hybrid content/funding model: Key problem: simply can’t be both commercial/public Not enough money for current/digital additional TV channels under this model? Certain popular ie commercially important content to become even more expensive eg sports rights – crisis over loss of PSL rights Danger: less and less real public interest content ie not a real PBS

8. 8 SABC Funding: options? Public Programming ie purely PBS NOT a hybrid content model One TV channel devoted to key/excellent public interest content ie SA-related news, info, current affairs, educational content Fewer radio channels: devoted to key/excellent public interest content ie SA-related news, info, current affairs, educational content Aim: citizen empowerment No ads ie no commercial imperatives at all Language issue: tailoring TV to reach most, not all, people ie isiZulu, isiXhosa, Sesotho, English, Afrikeens only. Note: commercial/community broadcasters could also have public service obligations: language requirements re minority languages: Xitsonga, Tshivenda, Setswana, Sepedi, siSwati and isiNdebele Local content/indep production etc Regional issues Note often commercial/community broadcasters can also play NB public role eg Radio 702

9. 9 SABC Funding: options? Public Funding ie purely PBS NOT a hybrid funding model TV licence fee model unlikely to work in SA Culture of non-payment/high levels of poverty No single collection point eg unlike certain international models based on collecting by a single electricity regulator Switch off through new DTB/pay as you go model is counter-productive ie no access to PBS Govt will not pay the full cost (billions of Rands a year will be required) through treasury allocations due to other social priorities eg education, housing, health, (arms deal!) Also: danger of “he who pays the piper calls the tune” ie becomes a state broadcaster through the back door

10. 10 SABC Funding: options? Public Funding ie purely PBS NOT a hybrid funding model Privatise. Note: not in the sense of having corporate shareholders but in the sense of slimming down ie lean PBS service ie selling off non-PBS assets to fund PBS long term: sell off 2 (or 6 incl. digital channels) TV channels and at least 3 Radio Stations eg Metro, 5fm, Good Hope ie music stations – SABC to keep the proceeds of sales to highest qualified bidders (unlike last time) Use the dividends/interest off the proceeds of privatisation to fund the PBS TV channel and radio channels Tax from privatised stations to go to SABC directly eg 12 years ago: Highveld Stereo made R26 m a year for the SABC – now making R260 million a year for Primedia ie now significant tax revenues to cover reduction revenues from the stations. Also: would result in a diverse range of commercial broadcasters likely to be more successful than the SABC at commercial functions