The South African Broadcasting Corporation (SABC) is facing a dire financial crisis, prompting Communications Minister Solly Malatsi to explore a potential levy on local and international streaming services like Netflix and DStv. This levy, if implemented, would exempt TV licence holders while generating funds for the struggling public broadcaster.
Malatsi revealed this consideration in response to a parliamentary question from IFP MP Khethamabala Sithole, who inquired about alternative funding sources for the SABC. This follows Malatsi’s controversial decision to withdraw the SABC Bill before its second reading in Parliament, a move that sparked tensions within President Cyril Ramaphosa’s Government of National Unity (GNU).
The Battle Over the SABC Bill
Malatsi justified his withdrawal of the SABC Bill by arguing that it failed to address the SABC’s immediate financial crisis and granted excessive control over the broadcaster’s board to the minister. However, his move faced resistance within the GNU, with the Presidency introducing a rule requiring ministers to seek approval from Ramaphosa and Deputy President Paul Mashatile before withdrawing bills.
National Assembly Speaker Thoko Didiza has yet to officially gazette Malatsi’s withdrawal, leading to criticism that she is failing to uphold parliamentary rules. This internal dispute is delaying much-needed intervention for the SABC, which continues to struggle financially.
SABC’s Declining Finances: A Crisis in Numbers
Since the 2019/20 financial year, the SABC’s revenue has plummeted from R5.7 billion to R5.2 billion. While it has reduced its annual losses, the broadcaster still recorded a R198 million loss last year, improving from a R746 million loss the year before. However, its debt burden has worsened, with total liabilities now exceeding R4.1 billion, up from R3.2 billion in 2019/20. This has pushed the SABC into technical insolvency, with net equity now at -R36.7 million.
Adding to its woes, the SABC’s cash reserves have dwindled, dropping from R2.1 billion in 2019/20 to just R401 million last year. Meanwhile, its once-iconic headquarters in Auckland Park is deteriorating, with broken lifts forcing employees and freelancers to take the stairs daily.
South Africans’ Silent Rebellion Against TV Licences
One of the major reasons for the SABC’s financial struggles is the widespread non-payment of TV licences. The broadcaster reports that only 13% of registered TV licence holders actually pay their fees. This figure excludes households that have never purchased a licence despite owning a television.
To address this issue, Malatsi is considering a levy on streaming services as part of a broader range of potential funding models.
Exploring a Streaming Service Levy
Malatsi’s spokesperson, Kwena Moloto, clarified that a levy on streaming services is only one of several funding options under consideration, not an official proposal. Nevertheless, the idea of collecting revenue from streaming services has been floated before. The SABC has previously suggested that pay-TV operators, particularly MultiChoice (DStv’s parent company), assist in collecting TV licence fees—a proposal that MultiChoice strongly opposed.
Unlike past suggestions that targeted DStv, Malatsi’s plan would require all local and international streaming services to contribute to SABC funding. This approach, he argues, would modernise the SABC’s revenue model and improve compliance by enabling automatic collection. However, he acknowledges that it would likely raise subscription costs and necessitate regulatory adjustments.
Other Potential Funding Models
In addition to a streaming levy, Malatsi is considering a household and business levy managed by the South African Revenue Service (SARS) as a ring-fenced SABC fund. This could provide a stable revenue stream and reduce collection costs, but it may face public resistance as another tax burden.
Another option under review is linking TV licence fees to vehicle licence renewals, ensuring an annual collection mechanism.
In the short term, Malatsi is looking into a conditional grant from the Treasury to provide immediate financial relief. However, he warns that this would be unsustainable in the long run and could compromise the SABC’s independence.
A Government-Backed Loan Guarantee
Malatsi has also proposed a government-backed loan guarantee to help the SABC secure an overdraft facility and fund critical infrastructure upgrades. Last year, the broadcaster achieved an unqualified audit for the first time since 2009/10, potentially strengthening its case for financial support.
However, Malatsi cautions that while a loan guarantee would provide short-term financial flexibility, the SABC would still need a sustainable revenue model to repay its debts.
Feasibility Study Underway
To develop a long-term solution, Malatsi has approved a feasibility study that will assess the SABC’s revenue streams, explore new funding models, and engage stakeholders to craft a sustainable business plan.
The Road Ahead
While a levy on Netflix, DStv, and other streaming services is only being explored, it has already reignited debates over how to fund South Africa’s public broadcaster. With the SABC teetering on the edge of financial collapse, decisive action is needed—whether through new levies, tax-based solutions, or a radical overhaul of the TV licence system.
For now, South Africans will have to wait and see which funding model, if any, is ultimately implemented to rescue the struggling broadcaster.
