Question NO502 to the Minister of Communications and Digital Technologies
21 September 2023 - NO502
Mthembu, Ms AH to ask the Minister of Communications and Digital Technologies
Noting that the SA Broadcasting Corporation (SABC) has reported to only have R234 million remaining from the R3,2 billion bailout funds that it received from the National Treasury, what (a) are the relevant details of the total amount of the used funds that have been directed towards the commercialisation of the SABC for profit maximisation and programmes attached to such funds and (b) plans are in place to mitigate against declining revenue as a result of a decline (details furnished)?
Reply:
The SABC was allocated an amount of R3.2 billion in 2019 to fund initiatives outlined in its approved Turnaround Plan, aimed at transforming its financial sustainability status. More specifically, these funds were intended for the settlement of trade and other payables, investment in fresh and compelling content as well as funding long-term capital expenditure projects and partnerships crucial for monetizing and commercializing SABC Television, Radio and Digital platforms.
The investment in content was therefore vital for increasing audiences across all SABC platforms on TV, Radio, Digital and Sport to drive revenue performance. As of 31st March 2023, the SABC spent a total of R1.1 billion out of the allocated R1.2 billion from the bailout specifically designate for content investment aimed at driving commercialization of platforms and ultimately enhancing the profitability for the public broadcaster. Unfortunately, the investment in content efforts by the SABC did yield desired results towards the commercialisation of the SABC for profit maximisation.
The R1.2 billion that was allocated to Content was used to fund 196 properties across the following genres mainly: Drama, Entertainment, Children, Religion, Education, and Documentaries. The SABC indicated that it was difficult to commercialise newly acquired content successfully and extracting profits from it. Although some of the popular dramas and entertainment properties yielded significant profits, the SABC has advised that new dramas that were premiered, did not meet expectations towards profit maximisation. Regarding the investment in Capex projects and their potential to contribute towards profit maximisation, the SABC indicated that this will only be evident in years to come.
The projects funded from the bailout funding were a combination of projects to start the journey towards digital transformation and some critical projects to replace aging technology infrastructure. These were almost all major and complex projects that not only required open tender processes following the compilation of complex specifications, but the project rollouts are all multiyear in nature with benefits that can only be tracked post project handover.
The newly appointed Board has developed a Revenue Improvement Plan that is expected to protect and attract current and new audiences respectively to safeguard the current revenue base and improve financial performance over the short-medium to long term period. The plan cannot be attached due to its commercial sensitivity implying that the details of the plan cannot be shared as part of this response.
Thank You.