The South African Broadcasting Corporation (SABC) has admitted that its funding model is no longer viable, as TV licence fee evasion remains a significant issue. The CEO, Nomsa Chabeli, highlighted in the public broadcaster’s annual report that the expectation that captive radio and television audiences would generate sufficient commercial revenue to support the SABC’s public service mandate is outdated.
Chabeli noted that the media landscape has fundamentally changed. The market is now crowded with both global and local competitors that do not share the same public interest obligations or costs as the SABC. This shift has forced the SABC to compete fiercely for dwindling advertising and sponsorship revenue in a highly competitive environment, often lacking the resources to acquire the compelling content that attracts advertisers.
The SABC’s revenue has been declining for years, with advertising spending shifting from traditional broadcasting to digital and social media platforms. Furthermore, the number of individuals paying their TV licences has also decreased. While there was a 10.4% increase in collections last year, South Africans paid only R758 million of the R4.9 billion demanded, a slight improvement from R686.5 million in the previous financial year. This increase stands in contrast to the decline in collections observed from 2022 to 2024.
Chabeli explained that efforts to improve licence fee collections have reached a point of diminishing returns. The broadcaster cannot effectively innovate its business model without substantial investment in high-impact content, which requires capital to meet audience demands.
To address these challenges, a new and innovative funding model is necessary, alongside changes to existing legislation and regulations. Recently, the Department of Communications and Digital Technologies appointed BMI-TechKnowledge Group (BMIT) to devise a new funding strategy for the SABC. BMIT’s task involves applying economic modelling and market analysis to help the broadcaster fulfil its public mandate in an era marked by declining compliance with TV licence payments and reduced advertising revenues.
Proposals such as a household levy or fees on streaming service providers like Netflix have faced significant opposition. The recommendations from BMIT will be included in a revised SABC Bill, which is set to be reintroduced to Parliament after the previous version was withdrawn, sparking backlash from the ANC.
Despite a slight uptick in TV licence revenue this financial year, attributed to improved debt collection performance and additional agencies, the SABC faces ongoing economic pressures. The sluggish economy has strained household finances, impacting both consumer spending and advertisers’ budgets, as well as the likelihood of families paying their licence fees.
Furthermore, wealthier viewers are increasingly moving to online streaming services, contributing to a widespread belief that licence fees are unnecessary if they are not watching SABC content. This has led to high rates of licence fee evasion and a general perception that the current licence fee system lacks credibility and legitimacy among the public.