The SABC is caught between the devil and the deep blue sea, having to cope with legislative and regulatory changes while simultaneously modernising in order to deliver on its mandate.
CEO Peter Matlare said this week, after the tabling of the corporation’s annual report in Parliament, the broadcaster had to invest heavily in product, technology and top-class people, while focusing on becoming an efficient, low-cost, high-quality producer.
Robin Nicholson, chief financial officer, said the corporation had undertaken a major review of its technology strategy in the light of the “significant” impact of digital technologies on its operating methods and its “ageing broadcasting and facilities infrastructure”.
Nicholson told the Mail & Guardian that the digitisation exercise would cost the broadcaster £74-million (about R844-million), with most of the equipment sourced in the European Union. This would translate into a cost of about R100-million a year over the next eight years.
The SABC will use its cash reserves — now standing at R280-million — to fund the first phase of the plan and is discussing with the Department of Communications how the balance will be funded.
A further investment of R122-million has been committed for updating the SABC’s information technology.
Keeping the corporation’s infrastructure up to date is not the only financial pressure. It spent nearly R1-billion on local content in the financial year to the end of March.
But, with stagnant licence fees and minimal state support, this and other costs took a financial toll, leaving the broadcaster with an operating loss of R32,5-million. While revenue rose 10% to R2,45-billion, costs rose 11,1% to R2,536-billion. The resultant loss of R84-million was reduced to R32-million by interest receipts.
TV contributed the lion’s share — 62,8% — of total revenue, followed by radio’s 20% and audience services’ 14,7%. Advertising, however, favoured radio, with revenue rising by 25,6%, while TV revenue only rose by 9,6%.
Corporatisation of the SABC is to be finalised next month. This will see the corporation change into a limited liability company and become liable for normal taxes.
Matlare said that commercialisation was the next big step on the corporation’s modernising journey. The broadcaster was already funding 87% of its operations.
Licence fees represent 14,7% of the broadcaster’s income — this year’s R361-million was R9-million higher than in the previous year. Licence piracy has been reduced from 52% to 31%. The SABC has added about five million radio listeners and two million TV viewers in terms of its expanded reach since 1999. About 6,7-million South African households are estimated to have TV sets.