SABC’s financial sustainability, operational challenges, implementation of turnaround strategy; with Ministry

Meeting report

Mr Solly Malatsi, Minister of Communications and Digital Technologies, said that the South African Broadcasting Corporation (SABC) Chairperson would not be here, but the Deputy Chairperson was. He asked that Deputy Minister Mondli Gungubele, who had just returned from an international trip, be excused at 17h00.

The Chairperson thanked Deputy Minister Gungubele for gracing the Committee with his presence. She understood that he had not slept very well.

She informed the Committee that a new presentation had been submitted around 14h00. She asked for an indication of which pages had been altered.

Minister Malatsi apologised, and said that the new presentation was simply to strengthen the presentation with additional information that the team felt would be useful. It was not about changing the presentation substantially, but involved the addition of two more slides. Ms Nomsa Chabeli, Group Chief Executive Officer (GCEO), SABC, would be able to confirm which pages had been added.

Minister's opening remarks

Minister Malatsi said that it was a pleasure for the Department of Communications and Digital Technologies (DCDT) and the SABC to meet with the Committee and present on the SABC’s financial sustainability. The approach of the presentation was that the SABC would spend most of the time dealing with the substance for the Committee to get a view of the corporation's challenges, progress regarding the turnaround strategy, and its financial sustainability and viability.

It was important to recognise the strides that had been made by the SABC, particularly regarding governance and leadership stability at the executive and board level, and the audit outcomes. Many who had followed the developments around the SABC in the previous years would have acknowledged that the SABC had weathered difficult storms to get to the type of environment it was in. It was through the current leadership that there was now some restoration, focus on good governance, operational efficiency and ensuring that the public broadcaster fulfils its key role in providing entertainment, education, and informative aspects to the public. This was more on the positive side.

On the pragmatic side, there were challenges regarding sustainable funding, which were applicable across many state entities, particularly with the state of the fiscus, limited resources and the evolution of developments in broadcasting and audio-visual media across the board. The SABC would be able to get into the plans and interventions that it was embarking on to mitigate that impact. The SABC still needs to remain competitive by being a platform that provides audiences with the type of content that keeps their eyes on the screens.

He said it would be amiss not to highlight major developments around the analogue switch-off, especially since the deadline was at the end of March. There was litigation currently underway. The matter was initiated by e-media, as one of the broadcasters, with regard to government’s decision to proceed with the analogue switch-off. The SABC would be able to outline some of their views on that. The matter had been longstanding. It came down to a simple matter of the affordability of dual elimination, which was the requirement to keep both digital and analogue at the same time. He said that with the state's shrinking purses, it was becoming unaffordable for the state to do so. This was the prism within which the extension was sought, and which was granted from December 2024 to the end of March 2025. There had been an effort to try and get as many of those registered beneficiaries to migrate to digital, to ensure that they did so as the country moved towards an analogue switch-off.

Overview of SABC's status

Ms Nomvuyiso Batyi, Deputy Chairperson, SABC, said that the new board had come in in 2023, which was just after the SABC was previously allocated a bailout. Many challenges had come with that. The board had to determine how it would ensure that the SABC kept the lights on. The bailout had managed to cover only part of what the SABC needed to do. Over and above, one may recognise that the role of the public broadcaster as it currently stands has changed globally, not only in South Africa. It was in the space of public media. The document that would be presented dealt with the priorities of the SABC in terms of the strategic focus and moving forward.

Audiences were consuming content differently. Most people were using bi-directional equipment such as handsets, and no longer using screens. It was more individualised, and different options were available for this. There were different platforms and applications. The industry as a whole had been disrupted by technology. The audiences in South Africa also consumed international content and not only local content. In this regard, the SABC was required to invest heavily in both technology and fresh content that consumers would want to consume.

The SABC had a dual mandate, which was a commercial and public service mandate. In terms of the commercial mandate, the SABC had to compete with both local and global entities to survive. The content focused mostly on the local players. In terms of revenue, most of the advertising revenue was directed to locally based competitors.

There were also issues with the public service mandate. The role of the SABC has become very important because, currently, there is a lot of misinformation, disinformation, and artificial intelligence. People were being misled every day as far as news was concerned. The SABC still had an unfunded public mandate. It had to use its commercial revenues to fund the public mandate for some of the programming. The SABC had to be more innovative, even though the funding had not changed in almost 50 years, since 1975. Television in South Africa was switched on in 1976, and the monopoly of the SABC had started then. Since the analogue switch-off, the SABC had lost audiences in areas that had already been switched off, and if there were fewer audiences, advertisers did not come on board.

The board had had some achievements in 2024. The board had completed and filled critical vacancies such as the Group Chief Executive Officer (GCEO), Chief Operating Officer, Group Executive Human Resources, and Marketing and Corporate Affairs, and the vacancy for the Chief Financial Officer (CFO) position had been advertised since January. The board was happy that the top structure of the SABC was strategically aligned to take the SABC forward. The board had come up with a clear and compelling strategy that had an executional pathway aligned with the budget.

In 2024, as directed by the Independent Electoral Commission (IEC) and related parties, the SABC had covered the elections exceptionally. There were issues around radio shows, and it had the potential to exist, despite the challenges that were being faced.

Regarding human resources, the board had ensured that the organisation was better focused and aligned with the governance needed. It had shown that governance was being strengthened and was being improved day by day. Last year, there had been a very positive audit finding. Internal controls and systems had been put in place. There was a new culture at the SABC. There was greater transparency on the side of the GCEO, and more accountability on how things were done. In the last financial year, the SABC ensured that the costs were managed effectively.

Ms Batyi said the board was looking forward to the acceleration of regulatory processes. The Independent Communications Authority of South Africa (ICASA) has been slow in making decisions and inquiries. An innovative funding model was required that would enable the financial sustainability of the SABC to be achieved. An urgent investment in solutions was required in order to mitigate the analogue switch-off. The SABC and the board would appreciate the support of the Committee moving forward.

Challenges in implementing SABC's turnaround strategy

Ms Nomsa Chabeli, GCEO, and Mr Tendai Matore, Acting CFO, took the Committee through the presentation, which provided the Committee with pertinent information regarding its financial sustainability, operational challenges and problems encountered in executing its strategy.

Contextual challenges

The SABC’s funding model has not changed in 50 years. It was designed for a world that no longer existed and was no longer relevant to the current context. The public mandate was largely funded by SABC’s commercial mandate and licensing, where compliance levels dropped to 14%. In a hyper-competitive industry, advertising revenue has shifted from linear radio/television to digital media. With an extensive inventory, many more players, local and global, were competing in an ever-declining advertising market. None of the competitors had a public interest mandate or the cost structure associated with it. The funding model could not be changed without changes in enabling legislation, the SABC Bill.

Funding public broadcasters

Public broadcasters were globally funded, but South Africa was not on the list. SABC’s financial position constrained its ability to invest in compelling global and local content, contributing to a vicious cycle with a downstream impact on creative industries.

Cost of unfunded mandate

On average, 55% of the mandate costs were funded by television (TV) licence fees, and 45% government grants. The SABC self-funds almost 50% of public mandate costs at the expense of investing in the maintenance and replacement of assets (physical and human), as well as its competitiveness and viability.

What had been achieved in 2024?

The SABC received an unqualified audit opinion, managed costs effectively, and aligned the top structure strategically. Some vacancies were filled, exceptional news delivery was achieved, and the governance reputation significantly improved.

Most significant immediate challenges

The analogue switch-off had decreased audiences and reduced the value for advertisers. There was no government funding for the unfunded portion of the public interest mandate. There were ongoing delays in establishing an enabling governance and funding environment. There was also the financial crisis, with no access to capex and the inability to attract loans or funding from commercial banks, as the National Treasury was not prepared to provide guarantees.

What was holding the SABC back?

Many things were holding the SABC back. There was a lack of compelling content. There was a slow pace moving to the new innovative funding model. There was an inability to borrow to fund capex and working capital. There was poor execution that impacted the confidence of advertisers. There was a slow pace of monetising SABC Plus. The analogue switch-off created uncertainty, which resulted in the loss of audiences and advertisers.

What enables the SABC to move forward?

The SABC could move forward due to its unparalleled reach and access, its legacy blockbusters, radio listenership, the resilience of people, advertising inventory, and the large amounts of audience data.

Areas of focus

There were ten strategic initiatives that would receive focus during the 2025/26 and 2026/27 corporate plans. The areas of focus were:

• Innovated funding model;
• Content acquisition;
• Analogue switch-off;
• Sales effectiveness;
• SABC Plus growth,
• Digital automation and transformation;
• Optimise radio portfolio;
• New positioning and business model for linear television
• Innovation capability; and
• Digitisation of television back catalogue.

Updated TV licence fees, securing National Treasury loan guarantees, agreeing to a short-term funding mechanism, modernising media regulations, establishing a new funding model, leveraging government spending, and resolving the Sentech dispute would address financial sustainability.

Bailout utilisation

R3.2b was received in two tranches on 7 October 2019 and 27 March 2020, following the confirmation of compliance with National Treasury. A standard operating procedure was developed, approved, and implemented to ensure that the correct procedure was followed in the management of the bailout funds in a manner that meets the expectations of all oversight and assurance bodies. The progress on the execution of the turnaround strategy activities and the bailout utilisation were presented monthly to the monitoring task team, which included the shareholder and National Treasury.

Context was important

There had been headwinds that constrained the expected benefits from the investments made in the utilisation of funding received. The COVID-19 pandemic had led to productions being impacted, and existing and new content productions being put on hold for a while. The analogue switch-off implementation had led to the loss of audiences and revenues. The extended periods of loadshedding significantly reduced television consumption hours and revenue generation. There was a reported audience loss of over 1.4m.

Financial and other issues impacting operations

Some issues included funding investments, ageing infrastructure, keeping up with audience and advertiser expectations, digitising and preserving legacy content, and upskilling and reskilling people for a new world of work. Other issues included attracting talented people with scarce, valuable skills, limited opportunities for youth, access to sports of national interest, shaping the culture, and building constructive collective relationships.

The request

The SABC asked for advocacy to accelerate processes to amend existing legislation and develop new regulations. It sought support regarding the media and digital platforms market inquiry. The narrative had to change, because the SABC was not looking for a bailout, but wanted to champion equitable funding for the public media enterprise/public broadcaster. It was asking for government agencies and entities to be encouraged to support advertising opportunities with the SABC.

(Please see the presentation attached for further information)

Discussion

The Chairperson thanked the SABC for the comprehensive report. She had been waiting for this report for a while. She thought that Members had received a very good presentation. She asked the Minister to allow Members to ask four to five questions each. The questions that could not be answered now should be submitted in writing. The Department of Communication and Digital Technologies (DCDT) and the SABC would have until Friday to submit the written responses.

Minister Malatsi said that this was reasonable.

Ms S Mokoena (MK, KZN) thanked the SABC for an elaborate presentation because it allowed her to learn more about the SABC than she had initially. Some good work had been done. She was concerned about the relationship between the SABC and National Treasury. There seemed to be a lack of cohesion, or National Treasury did not understand the SABC's mandate. There was R14b that had been raised from the spectrum auctions, but it was never given back to the SABC. There was a lack of financial guarantees from National Treasury. What had been done so far? Had there been any meeting to untangle those legal frustrations? If National Treasury were called for this meeting, it would have allowed for the elaboration of these challenges. Why had the funding model of the SABC remained the same for 50 years, despite repeated attempts to create a new model?

Mr N Pienaar (DA, Limpopo) said this situation was tough for someone who strongly believed in free markets economics. The SABC would always struggle to compete within the media industry. However, there was still a very important space for the SABC. Millions of people were struggling financially who could not afford subscriptions and needed to have access to entertainment and the correct information. He was hopeful that the GCEO would be able to steer the ship in the right direction. The GCEO had been appointed in November 2023, and he trusted that she would have a good hold on the system by now. She has experience with Massmart, MTN, and SuperSport.

He asked about the strategic partnerships that the SABC had and what value had been added to the system. This was going to be a huge role for the SABC going forward. There were people out there who had cell phones and an internet connection that could create a programme -- a podcast that millions of people could watch. It was always going to be difficult to compete with that system. Was this something that the SABC had considered? Were there any strategic partnerships with individual podcasters that could air on some of the channels? The podcast space was booming across the world. He listened to podcasts daily.

He believed that filling key positions was critical to ensure that the SABC was heading in the right direction for mindsets and growth aspirations. Was there not a sense that the SABC was overstaffed in some departments, or were people still being sorted out?

The GCEO had spoken about competing with other sectors such as Netflix, Multichoice and multinational corporations, and regulations and overregulation. Was the SABC advocating the regulation of these industries or the deregulation of the SABC? He would always fight for deregulation, because that was where the red tape lay. He thought that this was what was holding the GCEO back, because it was struggling to compete with companies that had connections and bank accounts. It would be critical for the SABC to be able to compete on a level playing field. He had more questions that he would submit in writing, specifically for the CFO, because the most immediate crisis was the financial challenge.

Ms S Sithole (ANC, North West) said that she would submit her questions in writing. When she was growing up, there were people going door to door to check on TV licences. She did not see these people any more, but believed that it had worked at the time. She raised the issue of monitoring the shops that sold TV sets. This was important, because one could find that an individual owned 20 sets, and it was impossible for someone to own that number of sets. The monitoring side of things should be taken seriously. She believed that the lack of monitoring had caused some of the problems that were confronting the SABC.

Mr M Modise (ANC, Gauteng) said that when the GCEO's presentation was more like a plea than a complaint. His understanding was that the SABC was doing its best within the limitations, as opposed to saying what people were supposed to do. The presentation was put together cleverly by stating the limitations, and then asking for assistance at the end. It was almost like a promise that if the assistance was given, the SABC would present far better next time. The ball was now in the Committee’s court, because the SABC had made their presentation. The message was how the parliamentarians, as lawmakers, could help the SABC. There was no fishing because the presentation was clear.

He listened to the SABC's radio stations. If someone had to say that Ukhozi FM was the biggest radio station, he would not debate that because it was a fact. He was listening to one of the employees coming up with an idea for a community radio award during an interview on SAFM. He was concerned that he had not seen such an interview on TV. This was a ground-breaking idea -- did the SABC want to partner with this employee to take this idea forward? He did not recall any radio awards for community radio stations, because they were mostly for the mainstream media. Was there a point where the SABC might take this project forward? It was a beautiful project.

The Chairperson said that the ball was now in the SABC’s court again.

Ms M Kennedy (EFF, Limpopo) said that one of the SABC’s main objectives was to reflect on the identity and diverse nature of South Africans, which must also reflect on the multilingual and diverse nature through the different languages. Did the SABC achieve the objective of covering all the South African languages in their broadcasting? Had the 19 radio stations been able to reach out to all of the diverse cultures of South Africa? It had taken 50 years to realise that the funding model was not working, and the compliance level was reaching only 14%. Why did it take so long? Advertising and TV licences were two core primary revenue streams for the SABC. However, advertisers were not coming on board. Was there a mechanism to entice these advertisers, or steps to prepare advertisers to come on board? There were a lot of first-time television buyers who did not want to pay for TV licences. Were there strategies in place to force them to pay? There were about 800 000 registered users that needed to comply with payments to ensure that the SABC grows and functions.

Mr B Farmer (PA, Western Cape) supported Mr Modise’s statement of how the presentation had come across. Towards the end of the presentation, the Committee had been asked to encourage government agencies and entities to support advertising opportunities with the SABC. In light of the public mandate that the SABC carries, the Committee should not be asked to do this. This was a standard that must be coming from the public mandate. He did not have any questions.

Ms A Matshobeni (EFF, Eastern Cape) was worried about the TV licences. What could be done to fast-track this? Every day, people were buying television sets, but there was no growth in funds for the SABC. She said that mechanisms must be put into place. This borrowing of someone else’s TV licence should not be allowed. There should be a mechanism in place to ensure that everyone who buys a set has a TV licence and pays for it.

Mr P Mabilo (ANC, Northern Cape) said it was unfortunate that the pages of the presentations were not numbered for reference purposes. There was a page that dealt with context and challenges. A few challenges were mentioned, but one of the areas that was highlighted was the funding model versus the unilateral withdrawal of the SABC Bill. Was there any plan to fast-track the SABC Bill that was withdrawn? The implications were quite clear -- the funding model could not be changed without changes in the enabling legislation.

He came from a province larger than Germany. The Northern Cape had Indigenous languages spoken by the Khoi and San people. He commended the SABC for having radio stations where the languages were advanced and developed. Were there any plans to have this as a permanent feature for television? He acknowledged that ICASA might have to come in, but there was a problem with these languages not being available on the public broadcaster.

He noticed that the SABC had partnerships at a national and international level. However, it seemed more inclined to work with the BBC and other media houses, but there was no coverage of the more than 65 000 people that had been killed in the Middle East and Palestine. If an individual wanted to get that information, it would have to rely on Al Jazeera, which was not part of the partnership. Why was the SABC limiting itself? This was a human rights and global governance issue. There had to be some coverage on that.

Was the SABC going to meet the deadline for the analogue switch-off? If not, what would the implications be? This matter had been running for many years. The SABC was not achieving the targets for local content -- were there measures in place to ensure that these targets were met?

Mr H van den Berg (FF+, Northern Cape) asked whether the IEC or other government entities also paid for airtime for advertisements, and whether this counted as advertisements or grants. What percentage of the advertising income came from the public sector? This was also government money that flowed into the SABC.

The SABC could influence the critical masses with an acceptable narrative. Everybody loves a good story. This was something that could be used for good to influence people. There was a programme called "LA Law" being broadcast, and everyone wanted to be a lawyer. At the time, "Sex in the City" was being broadcast, but everyone wanted to be a lawyer. It was not the same anymore. There was a problem in South Africa when it came to entrepreneurship. There was a problem with employment, but everybody wanted to be a lawyer or a manager. There was a responsibility towards the population to show that an individual could be proud to be a plumber or an electrician. Having a good story and showing the future potential market could help little Sipho become a plumber, have his own business, and get a wife. This would have a positive impact on the narrative in the country.

Content creators were now streaming on platforms like YouTube. He said it might be possible to speak to those creators directly to acquire some of the content. It might be missed by the people who were not streaming. There might be good content for a very reasonable price. He could not see the government making a massive financial difference. The Minister had spoken about private-public enterprises. It was as if a bit of the mandate had been given to look at that.

The SABC had spoken about the success of Netflix -- had it looked at that type of scenario, given the legislative commitment? Had it looked at the scenarios or financial modelling where it could reduce those regulations to an absolute minimum? Was there an alternative collection mechanism to overcome the challenge of non-compliance over TV licences? He admitted that he had not watched television for the last ten years. YouTube had been his favourite choice to keep up with a lot of nice stories. He also did not own a television set. He asked whether anyone had tried to cancel their TV licences, because it was a difficult process which he could not do.

The Chairperson said that one must just pass away. She did not want to go overtime, because everybody was tired. She allowed the DCDT and the SABC to respond. The Minister would thereafter make his closing remarks.

Responses

Minister Malatsi said that Ms Nonkqubela Jordan-Dyani, Director-General, DCDT, would deal with the question around the relationship with the National Treasury. He suggested that it would be useful for the Committee to have a conversation with the Minister of Finance, because that was a crucial stakeholder in terms of resource allocations. He would come in afterwards to answer any political questions.

Ms Jordan-Dyani said that there had been a contentious relationship with National Treasury when a request was made for a R3.2b bailout, but that was not the original amount. The amount had been downsized. It was difficult when a strategy was presented, but only a portion of the amount requested was approved with an expectation that the full plan must be delivered. This was always the relationship with all the programmes, including SA Connect and other critical stakeholders like the regulator ICASA. When the requests for the bailouts were made, the entire suit was expected, but only a sleeve of the shirt was received. This was why it was leveraging on the creative side and looking at partnerships. She hoped that this would yield results.

It was difficult to enter into partnerships, because they would request to look at the books. If the books were not healthy, they would walk away. It had been difficult to clinch and solidify those partnerships. There had been bi-annual requests, but nothing had been received yet. The DCDT had to be creative and look at alternatives. There had been a portion of local content on the Africa channel, but it had had to be readjusted for other needs. There has been support for looking at some exemptions for the SABC. It was difficult for SABC to compete with other broadcasters, because it had to adhere to the Public Finance Management Act (PFMA), and all the other regulations. A multi-year application for exemption in terms of the PFMA would be made that would allow the SABC to go out and compete. However, credit must be given to the SABC in terms of local content in South Africa. The SABC was contributing 90% to that in terms of radio and television.

It had to be made sure that on the one side, the SABC was stimulating local content and supporting entrepreneurs and those providing content, but also assisting the platforms from the offset. If one starts a new channel, one would not get viewership immediately. However, the channel would grow over time because of fascination with it. In the meantime, the SABC would have to see how to offset that risk by funding it from a local content perspective. This was included in the Audio and Audio-Visual White Paper which would soon be finalised and tabled.

Ms Batyi said that the podcaster sector was not regulated, and could speak anyhow. The SABC was governed by the Electronic Communications Act and the Broadcasting Complaints Commission of South Africa (BCCSA) rules. There was one person who was on radio who owned his own podcast, but his content was clean. This was possible when the person was aligned with the work of the SABC. The SABC was talking about regulation parity, but parity did not necessarily mean the same thing. The SABC was one entity in South Africa that was expected to cover all the languages. This did not come cheaply -- it costs money. The other television and radio stations were mostly in English. Regarding regulations, the legislature must ensure that the playing field is even for everyone. This would help to ensure that the SABC was not burdened with issues over and above that. No one was going to cover news that was happening in the rural areas, except if it was controversial. However, the SABC was expected to be there. It was part of the licence conditions of ICASA.

There was this whole talk about the public mandate. The SABC was advocating regulatory parity, and proposals had been put forward to ICASA. This was also linked to the issues around the sports of national interest. No one paid fees to watch the SABC as opposed to other subscription fees. There was also still a fee with YouTube. The Professional Soccer League (PSL) did not sell free-to-air rights to a subscription service. In South Africa, there were only two free-to-air services -- eTV and the SABC. Why was it being sold to Multichoice? These were some of the things that the SABC was looking at.

The SABC had dispensed of the door-to-door checks many years ago. There were various reasons, but one of the reasons included people staying in gated estates. There were also people pretending to work for the SABC. It had not yielded the desired results. The SABC had produced a plan involving collection agencies that could collect. An SMS would be sent to an individual indicating how much was owed, and the amount should be paid to them. However, because of the accumulated debt, an extra fee would be charged in the case of a successful collection. The collection was a concern, because there were more television sets than people paying for TV licences.

The SABC did not play in the community television space. However, there was some assistance through the requirement for the Media Development and Diversity Agency (MDDA) to run those kinds of programmes. For example, in the Northern Cape, there was a requirement that, when ICASA issued a licence, there must be an invitation to apply for people to have a community television station. There was a feasible case for that part of the Northern Cape. The SABC would then be required to partner, because no one was willing to go to the Northern Cape, except the SABC. No one was coming to assist with languages not even in the Constitution. These were the kinds of things that the SABC did.

In South Africa, there were several media awards. There were the Telkom awards that had different categories, including community radio awards. She addressed the question about the employee who had come up with the idea of community radio awards. It depended on the contract of the employee. If it was an independent contractor, whatever accrued from that would be that person’s responsibility. If the person was an employee of the SABC, there were internal processes that would have to be looked at operationally.

The SABC did not miss the local content quotas, but exceeded them. ICASA reports confirm that the SABC had met the local content quotas. However, it did not mean that people did not complain. She made an example of Radio Sonder Grense (RSG), where people would complain that presenters speak a little bit of English, so it was not a pure language. RSG was one of those radio stations that could combine both radio and written form. Both RSG and Lesedi FM would bring in authors to expand the African languages, but people would still complain.

Ms Chabeli said that enticing advertisers was the core business of the SABC. Over 80% of the revenue came from advertising and sponsorship. It was the core business of the SABC, but was also the most contested revenue stream. The SABC competed with all the strength of its sales steams, with value propositions, trade marketing and pricing. It was also something that could be improved. When it came to sales enablement and agility, the system was still behind because there were a lot of manual inputs, unlike the competitors. From a programme perspective, the competitors were ahead of the SABC. The SABC was introducing a new booking system that would enable the SABC to compete and optimise a bit better. There would be more automation around that. She believed that the SABC could be improved, and that the competitors were more commercially savvy.

Whether all South Africans were reached when it came to the issue of languages would always be a contentious issue. However, the SABC welcomed it because the platforms were meant precisely to have such debates. The platforms were there to ask, “am I being represented” and “what are they doing about it?". She was glad that the Committee knew about the radio station in the Northern Cape. It was trying to produce innovative ways of collecting TV licence fees. In South Africa, there was a culture of non-payment for TV licences. In the United Kingdom, there was an adherence rate of more than 80%, whereas in South Africa it was the reverse. The worst part was that the younger the person, the more they were not going to pay for it, and these were the people who were buying television sets. It meant that one had to think differently about the licensing regime. A funding model innovation was required. However, in the interim, the SABC had to try as much as possible to collect what it could with the existing payment base. Retailers would also have to be held to account, because TV sets were sold somewhere. The notion of borrowing TV licences from other people had to be eliminated. The SABC had now curtailed the number of televisions that one person could own. An individual could own any amount of sets before, but now it had been curtailed to five.

She said that 4% of advertising revenue came from the public sector across all levels of government. Most of the money came from the private sector. The SABC had to compete with everybody else. The private sector was not interested, because it wanted the content, the audiences, and the relevance. This was how the SABC competed at the moment. Last year, the SABC received R142m from the government, but it spent far more than that amount on advertising.

Minister's concluding comments

Minister Malatsi said that the non-compliance with payment for TV licences did not indicate a drop in the sales of television sets. The sales of sets were going on. This was where the gap was. They had to think creatively about this and involve everyone in the value chain. The limitation on the number of sets per individual had gone as far as it could have. There was criminality and fraud in the process.

He was surprised that Ms Chabeli had not spoken about the SABC Plus app, because she was always advocating for it. The consumption of television services for convenient purposes had moved to people’s fingertips, by using cell phones and apps. He advocated that the Committee should get on that app. The growth of that app itself also represented a potential source of revenue. The corporation had to think creatively about how to leverage that.

The SABC had reflected that there was a requirement in terms of what the public mandate was. The funding of the public mandate did not match the demand. The SABC was not saying that because it was a public broadcaster it was entitled to 100% of government spending on advertising. It was saying that the Committee, through its interactions with other entities of the state, could help to establish how much the entities were spending on the public broadcaster. This was beyond the capacity of the public broadcaster, but also the community media. This was also an important medium of communication for the DCDT. At a household level, those were very basic things that could help resource-wise.

The analogue switch-off deadline was on 30 March. There was a legal challenge that had been brought up by e-media. The first hearing was set for 18 -19 March. The DCDT would be watching how the matter unfolds. At the current moment, there is no indication of what the outcome may be. Across the board in government, there was a scramble for very limited resources. These resources had impacted the analogue signal in the form of the deadline that had been imposed. Everyone across the board was trying to find the most precise way of resolving the issue of what sustainable model was best for the environment that the SABC finds itself in.

He said the weakness of the TV licence model was that an individual would not lose access to the SABC's product if the individual did not pay the TV licence. It could not be switched off, whereas with motor vehicle licences, traffic officers could stop an individual and they would be in trouble. There was no incentive in the instruments of the law to do that. The SABC had to rely on the good conscience of South Africans to pay their TV licences. This was a challenge.

The process of the SABC Bill was at the Cabinet. This would guide how the DCDT would move forward with the Bill. Whatever the Cabinet decides, he was sure that the DCDT would be able to abide by the outcome. Hopefully, this would close the chapter about the outcry over the withdrawal of the Bill.

The Chairperson asked whether there were any follow-up questions.

Follow-up questions

Mr Modise said he was haunted by what had been said by the CEO of Nokia in his last address before Microsoft took over. He had said Nokia did nothing wrong, and that the mistake was not changing when the world was changing. He was scared that if nothing was done, the SABC would fold. He was happy that Minister Malatsi spoke about the car and driver’s licences that expire at a particular time, and if it was used beyond the expiration date, an individual ran the risk of being stopped at a roadblock. He suggested that the Committee, along with the Portfolio Committee on Communications and Digital Technologies and others, come together to get a dedicated budget for the SABC. There should then be monthly feedback. He suggested each Committee should give R100 000 to the SABC towards this type of feedback, and securing a particular slot on the SABC. He believed that the SABC should be everywhere. Whether an individual went to the Northern Cape or the Free State, the SABC should be there. There had to be some sort of oversight. If Parliament did not support the SABC, how could it expect others to?

The Chairperson said that this was something that the Minister and the team should look into. She jokingly said that she hoped it would not be deducted from her salary, because she would point fingers at Mr Modise. She said that the presentation showed that solutions were being worked on, especially regarding the TV licences. She asked that the comments by Mr Modise be taken seriously. She asked the Minister to make his closing remarks.

Minister Malatsi said that the responses were his closing remarks. He did not want to keep the Committee for the sake of talking. He thanked the Committee.

Consideration and adoption of minutes

The Committee took the minutes of the previous meeting as read.

The minutes were adopted.

The meeting was adjourned.