Tuesday, May 24, 2011

BREAKING. SABC blames drop in ad revenue on growth of internet and mobile platforms; blames previous SABC board for lofty targets.

The SABC has fallen more than R160 million short of its projected advertising income and told the South African government today that it's blaming the massive growth of internet and mobile platforms that are siphoning away advertiser rands that used to go to the public broadcaster. The SABC also blames the previous interim SABC board for unrealistic and inflated revenue targets.

Meanwhile politicians slammed the SABC for its bad presentation, submitted documents that were not adhering to parliamentary requirements and wondered where most of the SABC delegation were since only a few SABC representatives turned up. The SABC's acting group CEO Robin Nicholson wasn't there.

The SABC admitted that did not make its advertising revenue target and has fallen short of the promise it made to the government in return for a government loan-guarantee of R1,47 billion in 2009 that helped to bail out the beleaguered South African public broadcaster. The SABC is currently going through a corporate turnaround strategy and downsizing that has SABC unions fuming. Deadlocked salary negotiations with the SABC unions has stalled and will start again this coming Monday.

The SABC that met with the National Treasury and the department of communication this past Friday to talk about the broadcaster's financial affairs, told parliament's portfolio committee on communications in Cape Town today that the SABC's projected total revenue will be R5,173 billion compared to the set target of R5,569 billion. That is R396 million less that what the SABC agreed to.

The SABC made R3,34 billion in advertising revenue, R161 million less than set out in the government guarantee target. Sponsorships is R88 million less that the R607 million target at only R519 million. The revenue from TV licences are also R65 million less at R868 million. ''Content exploitation'' meaning selling programming and rights to other broadcasters also only brought in a paltry R39 million compared to the R84 million the SABC promised.

In its presentation before government the SABC blames the growth of the internet and consumer mobile industry that is eating away at advertising income that previously went to the SABC. ''The impact of these new entrants has lead to market fragmentation, has and continues to affect the SABC negatively. The compilation of revenue targets by the interim board did not consider these challenges," the SABC said in the presentation.

The SABC also blamed the previous interim SABC board for what the broadcaster said was unrealistic revenue targets, saying that the projected sponsorship revenue projection was ''inflated''. The SABC said it now only projects to make a profit of R12,4 million in 2012, as opposed to the projected R228 million the broadcaster promised the government to get the loan guarantee.

The SABC's TV news bulletins earlier this evening painted a rosy picture of the SABC and the SABC's presentation. ''Top SABC officials told parliament its turnaround strategy is on track,'' started the SABC's news insert. ''The SABC has forecast savings of R121 million this fiscal year. To do that it will need to shed some high-level executives.'' And finally: ''The SABC said following its coverage of the local elections, there should be renewed confidence in the public broadcaster.''