SABC loses R2bn per year in unpaid TV licence fees - COO
Johannesburg - The SABC would be commercially viable and would receive an immediate cash injection of up to R2bn per year if everyone paid their TV licence fee.
This is according to the public broadcaster’s chief operations officer Ian Plaatjes, who was speaking to IOL in a wide ranging interview on Friday.
Plaatjes said only 30% of TV licence holders were compliant and that had substantially affected the public broadcaster’s funding model.
“Our TV Licence is R265 per year and we have 30% of people paying, so we have a default rate of 70%.
“As you know the organisation’s funding model is through TV licence fees as well as advertising revenue, so we are not government funded, we are very dependent on that.
“If everybody was paying their TV licence, we certainly would be a financially stable and viable organisation, but that isn’t the case,” said Plaatjes.
The public broadcaster also lost a lot of money in advertising revenue during the peak Covid-19 and has only started to show promising signs recently.
He said advertising revenue plunged between 70 to 80% during hard lockdown months.
Plaatjes said the organisation was entering into a Section 189 retrenchment process which would see 400 jobs on the line as part of the SABC’s bid to save about R700m per year for the next three years.
Management at the SABC have also said they will freeze salary increments for the next three years, abandon the company’s leave encashment policy and have also reviewed annual leave and sick leave policies.
Plaatjes also said the public broadcaster would be making a push to utilise DSTV as a TV licence revenue collection stream, while also clarifying that they will not be doing the same with international streaming services such as Netflix.
“We have said that we expect DSTV to collect television licence fees on our behalf, they have about 10 million subscribers and if those subscribers do not pay their fee, they can cut them off immediately.
“Some of those subscribers (on DSTV) do not have a TV licence, so we are saying they can collect those TV licence fees on our behalf,” said Plaatjes.
“(Unpaid TV licence fees account for) about R2bn per year, we would be financially stable and viable immediately, so, if you compare ourselves with the BBC (in the UK), which is completely funded through their TV licence, their fee is over R3000 per year and they have nearly 100% collection rate, so it makes a huge difference.
“All that money can be redirected to content and we can have fresher, newer content and also additional content as well,” said Plaatjes.
Meanwhile, he said the public broadcaster had developed a new target operating model which was geared at cashing in on digitisation of the sector.
On Monday, the Telkom streaming service went live with SABC content.
“With our new target operating model, we have identified additional revenue drivers, one of it being carriage licences, like the deal we have just concluded with Telkom which went live on Monday.
“What that does to our revenue is it gives us two additional revenue streams that we never had before, we get a licence (fee) for our channels and we will be able to share in the revenue on the Telkom platform.
“This is not an exclusive deal with Telkom, so we intend to do this deal with other telecommunication companies as well, and so, those will be other additional revenue.
“That is over and above what we have projected in turning the organisation around, so it is huge,” he said.
With the SABC still stuck on analogue, Plaatjes said it was critical to the SABC’s viability that the public broadcaster moved to digital in the next five years.
He said if the public broadcaster was able to offer direct-to-home (DTH) services with a set-top box, that would enable the SABC to have its own dedicated sports, health, education and channels aimed at the marginalised language groups.
Asked what a thriving SABC looked like in the next five years, Plaatjes said: “In a best case scenario, we will be in a multi-platform and multi-channel environment.
“Right now we are on analogue, we need to migrate to a digital platform. There’s currently two platforms available, DTT (digital terrestrial television) and DTH.
“The current legislation forces us to a DTT platform, but in five years time that cannot be the case because it is unsustainable in terms of the cost of it being too high.
“In five years time we will have more people on DTH, which is completely interoperable because you can be anywhere in the country and you will be able to be connected via DTH if you have a set-top box.
“But if I have a DTT box, and I move into an area which does not have DTT coverage, it is not interoperable, I have to buy a new box.
“We cannot grow our channels right now because we are on analogue, but on digital, we can have multiple channels and grow the industry through that, and by then we will have our own OTT (over-the-top) platforms, we will have our own OTT platform in the next couple of years,” said Plaatjes.
As much as Plaatjes said the SABC was ready to go with digitisation, the matter was beyond them.
“The future of our destiny is not in our own hands. With digitisation, we are ready right now, but that requires a set-top box.
“But the roll-out of the set-top box is not determined by us, the manufacturing of it, the setting up of it, the installation and the managing of it afterwards, is outside of our control (it is with the preserve of the Department of Communications).
“So if that is not rolled out, then in five years time, worst case scenario, we will still not be off analogue,” he said.
He added: “There is no stumbling block from our side, all we need is a set-top box, because the infrastructure is there.
“There are 4.5 million households right now that do not have digital TV, so they are still on analogue.
“If you go provide them with a DTH set-top box right now, they will be able to connect.”