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Tuesday, August 18, 2015

New SABC CEO Frans Matlala reveals: SABC struggles to improve audience share, missed most revenue targets, wasteful spending continues.


The SABC's new CEO Frans Matlala in his first report to parliament since his appointment revealed that the public broadcaster struggles to improve audience share, that most revenue targets in late 2014 were missed, that the SABC overspend on sport and that wasteful and irregular spending continue to the tune of millions of rand.

Frans Matlala also blamed the bad South African economy and competition, SABC schedule disruptions, as well as the dramatic implosion at the South African Post Office - which is supposed to deliver accounts for SABC TV licenses - for a dip in the public broadcaster's revenues.

In his first performance and expenditure report to parliament as the SABC's new CEO, Frans Matlala today gave the portfolio committee on communications feedback on the SABC's position for the third quarter of 2014.

While the SABC's news report broadcast on SABC News (DStv 404) and SABC3 on Tuesday evening painted a very rosy picture of the public broadcaster and noting how "pleasing" it is to the minister of communications, Faith Muthambi, the story deliberately left out all of the more alarming details of the report back.

None of the following were reported on, or broadcast by, the SABC and SABC News:

The SABC continues to struggle to improve the public broadcaster's TV audience share which remains at 49% - below the set target of 52%. In order words, the SABC failed to lift its audience share as it was supposed to.

It was also revealed in parliament that marketing research done by one of the SABC's broadcasting rivals indicated that the SABC's drop in audience figures is apparently mainly as a result of perceived bias in SABC News coverage.

"During this period we had a challenge - particularly on the SABC TV side with our performance," Frans Matlala admitted to parliament.

"We missed our target by 2% due to two main issues. The one is from just immediately after the World Cup [when] we changed our schedules."

"We moved some programmes from SABC1 to SABC2, which is something that our viewers didn't like very much. And of course we lost audience there."

"The second one was Generations was cancelled [on SABC1] during that particular period and it took us a while to come up with an alternative," said Frans Matlala.

The SABC News channel on the DStv platform for which the public broadcaster receives millions of rand per year, is growing its viewership, but now has a daily average audience of 7 428 viewers.

On the 9 targets the SABC set for itself regarding "human capital" in the third quarter of 2014 the SABC met only 2. Seven were not met "due to capacity constraints and vacancies".


"The third quarter [of 2014] was financially challenging," Frans Matlala revealed to parliament's portfolio committee on communications.

"Our revenue targets, most of them were not met, except for our net financing income," said Frans Matlala. "The total revenue during this period was R2.099 billion - which was lower than budget by 9%."

"There are reasons for this unfavourable performance. A lot of them derive from increased competition, from the fact that most of our clients cut their budgets owing to contractions in the economy," said Frans Matlala.

Frans Matlala also blamed the South African Post Office for damaging SABC TV license revenue collection, saying that the SABC's TV licence fees were below budget".

"We depend on the South African Post Office to mail SABC TV license statements. During this period the Post Office experienced significant strike action."

"There were disruptions to our SABC schedules during this period. And of course the delays in approving the revised SABC licence tariff increase of 6%, which continues to put pressures on our revenues."

The SABC overspent on sport content that was not budgeted for.

Frans Matlala said that the SABC's lower revenues is due to things outside of the SABC's control.

"Its due to reductions in revenue from advertising, sponsorship, trade exchanges, SABC TV licence fees, and a lot of these depend on the appetite by the advertisers."

Frans Matlala revealed that irregular, fruitless and wasteful expenditure at the SABC continues.

During this period the SABC had R2.05 million in irregular expenditure and R820 000 in fruitless and wasteful expenditure, Frans Matlala revealed.

"One of the commitments that we make here is that where there are instances of avoidable wasteful and fruitless expenditure, the leadership of the SABC is always committed to ensure that action and consequences follow," said Frans Matlala.

"During October 2014 the SABC issued an RFP [Request for Proposals for productions] book with a total value of more than R600 million; making it the largest RFB book issued by the SABC for local content yet. It's a significant investment that will support the development of independent local producers," said Frans Matlala.

Some MPs referred to the SABC as "under-achieving".

Although it's in the public interest and members of parliament are tasked with oversight of the SABC, the chairperson of the communications committee on Tuesday blatantly blocked MPs from asking follow-up questions of SABC executives "in the interest of time".

MP Gavin Davis of the Democratic Alliance (DA) refused to back down and remain quiet. He tried to ask his questions of the SABC anyway -although not answered - while the chairman tried to silence him.

"If entities come here and mislead us, we have an obligation to put that right," said Gavin Davis. "Chairperson its unfortunate that you are quite happy to allow entities to come here to mislead us. And we are not even allowed to question them, when they mislead us."

"We are supposed to do oversight of the executives and you feel quite happy ...".

Faith Muthambi told parliament that "we all know and understand that the SABC is a state-owned entity under the guidance of the ANC led government. That's one thing we shouldn't be apologetic of".