SABCs Funding Model Options for the Future

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SABCs Funding Model Options for the Future

• Justine Limpitlaw
• Media Law Consultant
• Academic, University of Pretoria

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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, devils advocate, puts the cat
  among the pigeons, stir debate etc

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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

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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

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SABCs 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

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International Trends

• Ofcoms 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

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SABC Funding options?

• Proceeding with hybrid content/funding model
• Key problem simply cant 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

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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

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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

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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