SA Broadcasting Corporation: Budget and Strategic Plan 2007/8

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Communications

15 March 2007
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Meeting report

COMMUNICATIONS PORTFOLIO COMMITTEE
16 March 2007
SA BROADCASTING CORPORATION: BUDGET AND STRATEGIC PLAN 2007/8

Acting Chairperson:
Mr G Oliphant (ANC)

Documents Handed Out:
South African Broadcasting Corporation Presentation
SABC Presentation by the Chief Financial Officer Mr R Nicholson

 

Audio Recording of the Meeting (Extract 1)

Audio Recording of the Meeting (Extract 2)

SUMMARY
The SABC briefed the Committee on its efforts as the public broadcaster to contribute to the evolution of democracy in South Africa as well as to socio-political and economic reconstruction. A broad new strategy inspired by corporate goals was outlined, with particular attention paid to the SABC’s dual mandate as both a public and a commercial broadcaster. Issues surrounding the advent of digitization and its inevitable threat to traditional television and radio broadcasting were also put before the Committee. SABC reported that it was placing great emphasis on the World Cup in 2010, particularly the goal of enabling all South Africans to be able to access it through television.

The discussion centred on issues around the impending digital migration and the readiness of the SABC as well as the public to embark on this. Concerns were raised about the seemingly limited capacity of the television medium to facilitate the national discourse. Members asked why so little time was being given to the national discourse on television, when it seemed that the radio was able to attribute so much time to this, the predominance of English and Afrikaans, and the lack of television geared to the senior citizen. SABC was asked to explain how the 24-hour news channel would operate. Further questions addressed the license fees, funding, governance, the increased use of consultants, the urban bias, the gender and disability profile of staff, and staff remuneration. Some of the matters would stand over to a further meeting. Finally questions were asked about the findings of the Sisulu Commission of Enquiry, and the alleged blacklisting of journalists. It was suggested that a full day be set aside in May for further engagement.

MINUTES
South African Broadcasting Corporation (SABC) Briefing

Mr Eddie Funde, SABC Chairperson outlined the broad initiative of delivering an on and off-screen service to the South African Public. He made mention of the Board’s role of establishing broad principles and an overarching philosophy for the effective and successful management of the SABC.

Adv Dali Mpofu, Group Chief Executive Officer (GCEO):SABC, outlined the corporate goals of the SABC. He noted that the strategic framework was built on corporate goals, the organisational values and strategic pillars. The corporate goals would include issues of content, which was based on principles of  democracy, non-racism and nation building. There must be support and respect of shareholders and audiences. The SABC must be sustainable in an empowering environment. It should aim to be the preferred employer in the industry, and use innovative technology. Governance and  performance monitoring over corporate goals and SABC policies were vital. The organisational values would promote conversations and partnerships, aim to restore human dignity and build a common future. The strategic pillars consisted of people, operations, funding, technology and governance.

Mr Robin Nicholson, Chief Financial Officer, SABC, outlined the discussions regarding a revised funding model for the SABC. He mentioned some of the threats to the traditional sources of revenue. New entrants into the broadcasting market were expected as soon as ICASA went about the further distribution of licenses, and these were expected to pose competition when it came to the SABC’s traditional advertising sources. SABC would continue to invest heavily in improving the quality of content, including an allocation to Research and Development of Shows and Formats. The performance of Sport would be key to revenue and audience performance on all platforms with two World Cup events in the 2008 budget, ICC cricket and Rugby World Cup. Sales needed to strengthen performance in this area.

Discussion
A member enquired as to the readiness of the SABC regarding digitization. He asked whether the public were aware of it, and what would be happening to the old equipment that had been used on the current hat was happening with regards to the old equipment that had been used on the current or old analogue systems. He further enquired what was the role of the SABC with regard to Corporate Social Responsibility, and what specific efforts were being made to reach the poor. Finally he enquired whether the overall skills shortage in the country was affecting the SABC, and how was it dealing with this.

Mr Mpofu answered, in regard to digitization, that the SABC was part of a Digital Migration Programme Committee that was tackling all these issues, along with Sentech and the Department of Communications (DOC). There were technological and socio-economic constraints and problems in making cheap equipment available to people. Ageing equipment was a problem because of the speed of technological change. There was, however, room for old equipment to be used by smaller players such as community radio and others. He stated that the social responsibility programme did operate. A foundation would be launched in a few months that was going to deal with Corporate Social Responsibility. The SABC was also compliant with the BEE charter that dealt with its sector. Regarding skills, the SABC was in the unique position that it not only had to train people for its own purposes but also for the industry as a whole, and it was doing this with a strategy that targeted the most marginalized.

Mr Funde added that part of the work of the foundation would be to provide bursaries; both for  SABC and the entire industry. The SABC was also a strong participant in the Accelerated Shared Growth Initiative of South Africa (ASGISA), which meant that it was providing regular internships and similar assistance.

Dr P Mulder (FFP) asked for some clarity with regards to the issue of migration from “analogue to analogue”, and what exactly was meant by it. Ordinary people saw the license fee as paying for a service, where in fact it was a tax. The problem of non-payment came as a result of this misinterpretation. In regard to the payment of licenses, the SABC had mentioned partnering with ETV and Multichoice to enforce payment, and he asked it to explain how it was planning to achieve this. He felt that the Executive was downplaying the role of the legislature by making announcements from  Pretoria, no longer from the legislature. If commercial standards were applied across the board, important matters such as Parliament Live would not longer be aired.

Mr Nicholson replied that in the current plan proposed by ICASA and Sentech, people would have to tune their television sets on the analogue transmitter, from one frequency to another. That would, on the current frequency plan, affect 10.7 million households. The retuning might require them to change their aerial. Therefore, what he had referred to was a move from an SABC aerial to ETV-type aerial. With regard to licensing, the SABC was suggesting that any device capable of receiving a television signal would require a license. If a person could not provide proof of a license, their DSTV or other transmission would be disconnected.

Mr Mpofu added that although non-compliance with regard to TV licences alone was explainable  by reason of inability to afford the license, the same did not hold true where a person had a DSTV connection. If a person could afford R400 per month for that DSTV, they could certainly afford to pay R200 for a TV licence.

With regard to the comments on Parliament Live, Mr Mpofu explained that the SABC did not determine the venue for announcements by government, and would film them wherever they took place. Members should raise this grievance on another platform. The Parliament Live issue pin-pointed the dilemma of the SABC regarding its dual mandate. Management decisions had of necessity to be linked to the money. Proportions were very much in favour of the commercial side. The SABC was unlike the BBC, which had endless financial backing. The SABC always had to be concerned with commercial viability.

Mr M Mohlalonga (ANC) asked what the SABC wanted to do about the idea of a National Youth Radio. During the State of the Nation debate, the SABC had not featured strongly. The debate should have dwelled more on the public mandate perspective of the SABC. .

Mr Mohlalonga commented that he was not convinced that it would be necessary to raise the license fees. There should be broader discussion around the funding model. He noted also that the news broadcasts were "polluted" with advertising.

Mr Mohlalonga also was of the opinion that the strategic location of the SABC was not ideal. If one wanted to participate in the national discourse one had to go to radio. He asked why the SABC was doing so little in terms of facilitating the national discourse on television. He also enquired whether there were any plans to speak to the issue of not being able to get certain languages in certain parts of the country; something that was effectively the “bantustanisation” of radio. Finally he noted that the Board may be appearing before the Committee for the last time, and thus it should be congratulated on being up to the task of leading the public broadcaster.

The Acting Chairperson mentioned that the Committee had faced an unfortunate situation with the Post Office, where the entire board had disintegrated.

Mr Funde commented on some of the operations of the Board, and stated that the Board had worked hard on the issue of governance. It did not have a company secretary for a long time, but the secretariat had now been strengthened. It was seeing good results. It had established a Board Charter, a Risk committee as well as a Procurement committee. It was finalising a comprehensive delegation of authority document. It had also established a governance structure.

The Acting Chairperson intervened to note that Mr Funde had promised to give the Committee documents detailing some of these developments, thus it was not necessary to go through them.

Mr Mpofu said that on the part of management, he wished to echo the sentiments of Mr Mohlalonga with regard to the work done by the current board. The issue of a National Youth Channel was one that needed to be raised with ICASA; but another frequency would be required. The SABC had committed to the multi-channel environment, and one of those channels would be a twenty-four hour news channel. The funding issues were provocative. He did not think it possible to say that the SABC should not increase license fees while in the same breath saying that the news was polluted by advertising. A public broadcaster had three means of generating funds, and these were government, license fees and advertising. South Africa was one of the countries with the highest reliance on public funding in the world, and it was unable to do anything about this. The proportions should be changed so that these issues could be dealt with. The issue of the so-called “bantustanisation” of radio would be dealt with under the digital migration. This would also deal with the issues of SABC 4 and 5. There was a technological issue, since these channels were conceived as analogue, and the problem was now whether to go ahead with them and then have to change to digital in the near future, or rather to wait for digital migration to take place. He noted that the national discourse had been easier on radio simply because radio had fifteen channels and television had three. In the digital environment this would change.

Mr Radhakrishna Padayachie, Deputy Minister of Communications, stated that he was mindful of the financial and other challenges that the SABC was facing. The SABC was doing a sterling job. The idea of reconfiguration into clusters was very good. He noted that nothing had been said in the presentation about the SABC’s continental role. SABC had a huge role to play in the African Renaissance.

Adv P Swart (DA) asked what had happened to the language targets of 2005/6. He also enquired what the vacancy rate was in the technological departments.

Adv Swart enquired if the problems at Eskom had impacted on the SABC at all.

Mr Mpofu said that in regard to Eskom problems, the SABC did have back-up mechanisms, and it was working at improving these.

Adv Swart asked why there was such an increase in the use of consultants at the SABC

Mr Mpofu said that the SABC did not want to increase the use of consultants, but because of the rapid movement into the era of digitalization, these consultants were necessary.

Adv Swart also commented that he had never thought that the television licensing system was going to work. Some people did not want to pay for political reasons, some could not pay and others did not want to pay. He asked if there had ever been a study looking at how many people paid once for their license and then never renewed it. He commented that the model of collecting money needed to be further examined.

The Acting Chairperson stated that the vacancy issue was being shelved for a later date, so that data could be presented by the SABC. The same would apply for the licensing matter

Adv Swart asked that the Committee be given a short report on the implementation of the recommendations of the Sisulu Commission.

Mr Mpofu reported that the Sisulu Commission issues were being addressed. All of the recommendations of the Sisulu Commission were accepted and some were still ongoing. It was not a process that would happen overnight.

Mr R Pieterse (ANC) stated that the language issue needed to be addressed and that there needed to be greater representation of the less widely used languages on SABC media. He commented that perhaps the television licence matter was persisting because of the SABC’s failure to reach everyone and accommodate everyone linguistically. He considered that it was not sufficient for  SABC to say that when digitization came around matters would be sorted out, and just leave it at that. English was simply too dominant as a language, with it being used in about  90% of all broadcasting. It was not fair that ten other official languages should be forced to share the remaining 10%. Finally he asked how many of the 7 000 workers at the SABC were disabled, how many were women, and how many youth.

Mr Mpofu replied that it was not correct that SABC was saying that when digitization came the language issue would be solved and that it was doing nothing until then. The SABC had news in all the official languages. That was not the case two years ago. Language was obviously a gigantic obstacle, because of the traditional domination of English and Afrikaans. Much still had to change, but the reality of the history of the country meant that those changes could not take place overnight. Unfortunately the statistics for youth and women were not readily available.

Ms S Vos (IFP) asked how the 24-hour news channel would operate.

Mr Snuki Zikalala, Managing Director: News and Current Affairs, SABC stated that the 24-hour news channel would be launched on 7 June. Then SABC would ensure that public as well as private broadcasters throughout the continent had access to it. The SABC had opened a number of bureaux on the continent, and in Latin America, including Jamaica and Sao Paulo. Next year it would be opening a bureau in the People’s Republic of China. Currently there were correspondents in Washington as well as New York. This way, there were regular updates on developments in the United Nations and in Washington, through correspondents. There was thought about opening another bureau in London. A bureau had been opened in the Democratic Republic of Congo; and a person has been interviewed to set up a presence in Senegal. An application had been made to have a person based in Zimbabwe. These bureaux were the ones that would be responsible for informing South Africans what was happening on the continent. New digital equipment was being purchased so that SABC could cross live to the correspondents on the continent, in the Caribbean, China, Brazil and elsewhere. The SABC was setting up a news agency, so that it could sell the information that it had on audio, on video and in text. In this way some money could be recouped so that the new bureaux could be supplemented. When the Multichoice license expired in 2007, there was a plan to migrate SABC Africa to SABC International, which would have lively debates on the continent itself. Here journalists would engage Heads of State in debate and this would be transmitted across the continent. This was the channel that would be competing with other international channels, including CNN, which had already been or were being set up on the continent. SABC was very excited about this challenging environment.

Ms Vos asked if the people who had been been blacklisted would be approached for comment in future and seen when appropriate.

Mr Mpofu stated that there was nobody that had been subjected to a blacklist. Certain people, rightly or wrongly, were not consulted regarding certain issues, but there was never a blacklist.

Ms Vos commented that there was a need to sit with the Department of Trade and Industry to devise a way in which greater public awareness could be created regarding digital migration and the purchases being made by consumers.

Mr K Khumalo (ANC) commented that the SABC would lose staff because it was not paying them competitively. Some of the anchors for the morning show were paid significantly less than their counterparts. In 2005/06, the Chief Financial Officer was paid more than the CEO; as were those in Sales and Marketing. It was not that these should be paid less, but surely the GCEO deserved to be remunerated at a higher level. This had further implications, for he pointed out that it was difficult for reporters and cameramen to be promptly on duty when some of them had to take public transport.

Mr Funde replied that the Board had raised the issue of payment and it was being thoroughly investigated. Due to staffing problems, not much progress had been made on the matter in the past. The Board was concerned about losing people, especially as new broadcasters were being licensed which made the environment more competitive. He stated that the figure given in the Annual Report for the GCEO’s salary was low because at that time he had not yet completed a full year with the company. Sales and marketing staff were salaried on a different scale that included commission, because it was they who had to bring the money into the organisation in the first place.

Mr Khumalo commented that news on the commercial broadcasters such as Metro FM was poor, and there was too much of an urban bias with regard to news. He also commented that senior citizens had very little to watch on television and it surely would not be too difficult to give them even a single programme. He also stated that the issue of subtitles and sign language needed to be improved.

Mr Mpofu admitted that there was an urban bias. The new strategy looked to deal with this. Programmes directed at senior citizens were not labeled as such. The SABC was trying to ensure that they were included more in scripts.

Ms M Morutoa (ANC) commented that while there was parity at the management levels, in terms of gender, SABC had not stated what was being done at the lower levels.

Ms Morutoa asked the SABC what its opinion was of being accused of being a state broadcaster by some political parties. She asked whether the SABC was subjected to political interference.

Mr Mpofu replied that political interference was "urban legend", and likened it to a ghost that was frequently referred to but never seen. Nobody had ever told Mr Mpofu how to do his job. If they had, he probably would have resigned by now. Many people tried to influence the SABC, not only political parties, and the SABC had withstood this.

The Chair said that the skills development issues should be dealt with when data had been  produced by the SABC and the Committee had the opportunity to study it. He suggested that a full day be set aside in May for further engagement.

The meeting was adjourned


 

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