South Africans kiss R3.2 billion goodbye

The Auditor-General of South Africa (AGSA) says the South African Broadcasting Corporation’s (SABC’s) finances have shown no real improvement despite receiving a bailout of R3.2 billion in 2019.

Presenting before the Standing Committee on Public Accounts, AGSA deputy business unit leader Nathan Lawnet highlighted that the public broadcaster has achieved only 52% of its targets for the 2023/24 financial year.

“For the 2023/24 financial year, we would like to commend the SABC for having not received any material findings relating to the annual performance information that was presented in the annual performance report,” he said.

“However, we are concerned about some of the key targets, where they have not achieved a lot of them.”

Lawnet highlighted the issue of the SABC’s prime time share of television ratings. It has set targets of 22%, 6%, and 3% for its SABC 1, SABC 2, and SABC 3 channels, respectively.

However, it only achieved a prime time share of 18.8% for SABC 1, 4.1% for SABC 2, and 1.5% for SABC 3.

“Why that target is important is because it indicates the number of viewers that are tuning in to watch the various channels that the SABC has to offer,” said Lawnet.

He explained that meeting these targets is key to attracting advertising clientele. He said failing to achieve the targets could result in a ripple effect of declining revenue.

As its viewership slips, advertising revenue follows a similar trajectory.

Lawnet said sliding viewership directly correlates to the number of shows the public broadcaster has in the top 20.

“Obviously, the more top-rated programmes that you are showcasing mean that you are attracting viewers to come watch your shows. Higher the viewership directly correlates to advertising,” he said.

The AGSA also highlighted other targets missed by the public broadcaster:

• Implementing an operational news production system — Not achieved
• Implementation of and training for a new scheduling system — Not achieved
• Target of 20,000 hours of TV content digitised — 16,333 hours digitised
• Target of 16 SABC websites completed — Not achieved
• Target of 16 completed SABC mobile apps — Not achieved

Lawnet suggested that the SABC’s use of in-house staff to develop the websites and mobile apps takes longer than contracting a third party for the same period.

“The SABC, trying to save money by doing it in-house, has impacted its performance in terms of delivering these initiatives,” he added.

Regarding the public broadcaster’s overall financial performance, Lawnet said the bailout it received in 2019 and its turnaround plan have done little to improve its finances.

“The SABC in 2019 did receive a R3.2 billion bailout, which was tied to a 3-year turnaround plan. Despite the turnaround plan, we haven’t seen a significant improvement in the financial position of the SABC,” he stated.

Forget broadcasting and focus on streaming

Former general manager of SABC Sport and Sportscape Media founder and director Garry Rathbone believes the SABC should focus all of its attention on its streaming platform, SABC Plus.

“The SABC has the most future-proof option in its hand right now, which is SABC+,” he said.

“Everything, every resource the SABC has, should be turned around to focus on driving advertising, audience reach, and retention into that space.”

Officially launched in November 2022, the SABC Plus platform has undergone two revamps and relaunches since, with the latest coming in July 2024.

The revamp included stability improvements, new features, higher resolution streaming, catch-up content, and compatibility with new smart TV operating systems.

Rathbone said the public broadcaster isn’t leveraging SABC Plus viewership numbers enough.

“If you look at free-to-air broadcasts in the United States, they don’t have this problem. They’ve got millions and millions of dollars to spend because they commercialise their huge audiences,” he said.

He said the BBC is a good example of how not to do it.

“The BBC could solve all their problems tomorrow if they did one simple thing: allow advertising, as they too rely on TV licences for funding,” Rathbone added.

He said the SABC has the country’s largest audiences but fails to generate the advertising revenue it should with those numbers.

Meanwhile, he noted that MultiChoice has accumulated a similar share of advertising revenue with far fewer viewers.

He also said the SABC should prioritise quality content through SABC Plus.

“If they increase the quality of their content, they can build and bring audiences back and start attracting advertisers again,” Rathbone stated.