OUTA: Scrap the SABC TV Licence scheme, says organisation as it comments on South African government's controversial plan: 'Why should Netflix and DStv be obliged to collect revenue on behalf of another entity?'

by Thinus Ferreira

Scrap the SABC TV Licence scheme. So says the Organisation Undoing Tax Abuse (OUTA) in its submission in response to the South African government's controversial plan to force video streaming services like Netflix and Showmax and pay-TV operators like MultiChoice to tack on and collect a SABC TV Licence fee from DStv subscribers on behalf of the public broadcaster.

OUTA has responded with an official submission to the controversial draft white paper on audio and audiovisual content services policy of the department of communications and digital technologies.

The draft legislation not only wants to change the law to compel subscription video-on-demand (SVOD) video streaming services and pay-TV operators to collect SABC TV Licence fees on behalf of the financially struggling South African public broadcaster.

The proposed legislation - on which the public and the country's TV and film industry can still comment - also wants to broaden the definition, thereby forcing people to pay a SABC TV Licence for watching content like Amazon Prime Video on a tablet, StarTimesON on a smartphone, or even if they're not watching any SABC content.

"The point of what we are witnessing with the move by SABC and the SABC TV licenses related to Netflix etc is truly the tip of the iceberg," says OUTA.

In its submission, OUTA asks "why should Netflix and DStv be obliged to collect revenue on behalf of another entity and how will this initiative be facilitated? Furthermore, how will the money be collected and then handed over to the SABC?"

"How will subscribers practically be managed because Netflix and DStv subscribers may signup

and cancel at any time?"

"Considering the poor transparency and accountability measures, how will the department ensure that

the collection of revenue from Netflix and DStv is transparent and what are the measures of

accountability in place to ensure all funds collected are used in an appropriate manner and not

squandered as it frequently occurs in government departments?"

"Will this not be another method of getting more money from citizens to fund corrupt activities of the department? With technology and innovation ever-evolving, how will this policy accommodate progress and also manage competitors and new businesses, devices etc? Or does it plan to discriminate against Netflix and DStv?" OUTA asks.

OUTA says that "It is evident that the SABC has been financially mismanaged and politically interfered with over the past decade. Netflix and other digital disruptive business models are also game changers and the SABC has been sleeping while its competitors got the upper hand with innovative solutions and novel service offerings."

According to OUTA "The notion of switching the failed SABC TV Licence revenue mechanism to other commercial broadcasters or live streaming entities, or to add a tax to the sale of electronic devices (laptops, phones and iPads) is not a solution".

OUTA says that "It is emotive to suggest that international video streaming services are “actively targeting South African audiences” and “extracting revenue" from South Africa, where they are providing quality and affordable services to a global audience.".

"Finding the South African audiences to be attractive could be a result of low quality and expensive service delivery locally, functioning as a push-factor towards these international video streaming services."

According to OUTA the draft legislation "also introduces shocking remedies to the international video streamers, by stating that potential compliance measures include, amongst others, “blacklisting, blocking the video streaming services at the levels of ISPs” etc. This is a blatant rebuttal of freedom of choice, the democratisation of information and universal access".

How will content quotas for Netflix be enforced?

"How will South African content quotas be enforced for online broadcasting services" like Netflix South Africa, Amazon Prime Video and others, OUTA asks in its submission.

Video streamers like Netflix who fail to make a percentage of their catalogue "local" according to an imposed 30% content quota "need to pay a specified sum of money, or minimum percentage of gross revenue into a fund, which supports the creation of the audio and audiovisual South African content, the draft white paper states.

"This is highly problematic, for who will host, monitor and account for that 'fund', and how can it be sure that on-demand services, like Netflix, will be 'penalised' and their contributions to the 'fund' be used to enrich state coffers instead of the intended support of quality South African content?" OUTA says.

Changing a failed system won't be successful

OUTA says in its submission that it "believes that the SABC TV License model is failing and our position is that any tax or levy that fails to achieve required compliance and is failing, due to poor administration and unenforceable mechanisms, should close down".

OUTA says that "The inability to manage a current failing system will not result in success, should the system only be amended. The systemic concerns are rooted within the entities themselves, and therefore an internal audit and evaluation ought to take place before the responsibility becomes displaced onto the citizens".

ALSO READ: South Africa's government wants to force video streaming services like Netflix into a 30% local content quota: Here's why it's a bad plan and will end up hurting consumers.

MultiChoice to drop Guptas' controversial ANN7 channel from DStv in June 2018 according to reports; says it's not currently negotiating to keep ANN7 on DStv.

With Sunday newspaper reports saying that MultiChoice plans to drop the controversial ANN7 (DStv 405) channel from its DStv bouquet in June 2018 when the existing contract expires, MultiChoice on Sunday told TVwithThinus that MultiChoice has not been approached by ANN7 for renewal of the contract and that MultiChoice is not in possible renewal negotiations.

On Sunday the Afrikaans Rapport newspaper reported that the biased so-called "news" channel, slammed for driving racial division in South Africa and known for its ongoing litany of on-air blunders and mistakes, will disappear from DStv during June when the current contract between MultiChoice and ANN7 expires.

Afrotone Media Holdings is now the new holding company for ANN7 and The New Age with Mzwanele "Jimmy" Manyi as executive chairman.

So far more than 12 500 DStv subscribers have signed an online petition at petitions24.com .

The thousands of angry people are demanding, and explaining why, they want MultiChoice to get rid of ANN7.

DStv subscribers are saying that they don't want to be forced to pay for a channel where money is paid by MultiChoice to the highly controversial Gupta family whose involvement with South African State Capture has been exposed, and that is damaging South Africa with biased so-called "news".

In the past week The Organisation Undoing Tax Abuse (Outa) also asked MultiChoice boss Mark Rayner in an open letter to get rid of ANN7 and to come clean about MultiChoice's dealings with ANN7.

Further leaked emails from the Gupta leaks two weeks ago have shed further light on the insider contract negotiations and dealings between MultiChoice and ANN7, with MultiChoice paying hundreds of millions of rand of DStv subscribers' money to ANN7 for the channel to provide its distorted so-called "news" coverage.

On Sunday Rapport said that MultiChoice will dump ANN7, primarily due to the ongoing brand damage ANN7 is inflicting on the DStv brand by proxy.

According to the report MultiChoice has not Mzwanele "Jimmy" Manyi, nor has he made any effort yet to get in touch with MultiChoice.

ANN7 that has been used for personal on-air vendettas against politicians not aligned with the tarnished president Jacob Zuma, has also been a bottom-feeder in terms of TV news channel ratings on DStv.

MultiChoice in a quick response to a media enquiry on Sunday morning told TVwithThinus that it is not currently negotiating to keep ANN7 on DStv.

"We have a legally binding channel carriage contract for the ANN7 channel."

"We cannot comment on the terms of the contract (including the duration of the agreement) as it is subject to confidentiality clauses."

"We have not been approached by the owners of ANN7 for the renewal of the contract and we are not in negotiations for the renewal of that contract. Timelines for negotiations for the renewal of contracts vary from contract to contract and are dictated by different situations and circumstances."

"We are furthermore unable to cancel a contract prior to its expiry unless there is a clear breach of that contract."

"As we have stated previously, DStv is a platform that relays many local and international news channels, representing a wide spectrum of views - for instance SABC News, eNCA, ANN7, CNN, Sky News and many others."

"We don't have editorial control or any involvement in running the operations of any of these news channels, including ANN7."

Thousands of concerned DStv subscribers want clarity from MultiChoice boss Mark Rayner on DStv's continued business with the slanted ANN7 channel, says OUTA.

The Organisation Undoing Tax Abuse (Outa) in a letter to MultiChoice boss Mark Rayner says thousands of concerned DStv subscribers want the pay-TV platform to drop the Gupta-linked ANN7 (DStv 405) that is associated with biased content and slanted reporting.

Outa wrote to Mark Rayner, questioning MultiChoice's "morality of DStv's continued business transactions with ANN7", and asking Mark Rayner to please respond on behalf of MultiChoice to the "growing demand for clarity of your organisation's position with ANN7".

MultiChoice was asked for comment about Outa's open letter to Mark Rayner about clarity on MultiChoice's position on ANN7.

MultiChoice says "we confirm that we received the letter from Outa. We've contacted them and we'll be meeting them next week to discuss their concerns."

Outa CEO Wayne Duvenhage says DStv subscribers are forced to pay for ANN7 and are directly funding the channel.

Further leaked emails from the Gupta leaks last week shed further light on the insider contract negotiations and dealings between MultiChoice and ANN7.

Hundreds of millions of rand of DStv subscribers' money is being paid by MultiChoice to the channel known for its distorted news coverage with ANN7 that that has been accused of inciting racial division in South Africa.

Unrelated to Outa's open letter, so far more than 12 500 DStv subscribers have signed an online petition at petitions24.com, that wasn't started by Outa, demanding and explaining why they want MultiChoice to dump ANN7 and that they don't want to be forced to pay for the slanted channel that they say is damaging South Africa.

MultiChoice as a pay-TV service is supposed to keep clients happy. It's not clear what exactly MultiChoice is doing about the thousands of DStv subscribers who are vocally complaining about ANN7.

Outa says ANN7 was "allegedly initiated with taxpayers' money and set up to support a political bias driven by the politically connected Gupta family".

"We believe the recent actions to cease doing business with Gupta companies by the banking institutions and and the Johannesburg Stock Exchange - ostensibly due to the Gupta family's deep involvement in State Capture and alleged money laundering - is sufficient for DStv to review its "business as usual" stance with ANN7."

Outa says "adding weight to this call is the growing dissatisfaction of ANN7's seemingly biased content and slanted reporting on current political affairs."

Outa says "ANN7 peddles 'fake news' and pro-Zuma propaganda, with the channel openly attacking those who take umbrage on matters of State Capture and corruption linked to Jacob Zuma,his family and friends."

"We remind you of the plight suffered by Bell Pottinger, KPMG, SAP, McKinsey and others, who believed that hiding behind confidentiality and contractual clauses would suffice as reason to continue their unacceptable conduct."

Outa is pleading with MultiChoice "to do the right thing" and to heed "the call by civil society, for greater transparency and decisive action against entities that conduct themselves in a manner that minimises South Africa's prosperity".

OUTA calls on SABC to block further mega-million payouts to SABC's disgraced Hlaudi Motsoeneng after his looting: 'He doesn't deserve another cent'.

The Organisation Undoing Tax Abuse (OUTA) is calling on the SABC's interim board to urgently act to prevent further mega-millions to be paid to the fired former SABC executive, the famously matricless Hlaudi Motsoeneng, who plunged the beleaguered South African public broadcaster into bankruptcy and an existential crisis.

OUTA is pleading with the SABC's interim board to urgently block any payments to the disgraced former SABC chief operating officer as South African president Jacob Zuma keeps delaying his signing of an order to have the Special Investigating Unit (SIU) from starting a corruption probe into the maladministration at the SABC.

"OUTA is concerned that former SABC COO Hlaudi Motsoeneng will, now that he has been dismissed, attempt to claim millions in pension and other benefits," says OUTA in a letter to Khanyisile Kweyama, chairperson of the SABC interim board.

"We note reports that president Jacob Zuma is delaying the approval of the Special Investigating Unit investigation into the SABC, which may result in Hlaudi Motsoeneng receiving more undeserved payouts," says Dominique Msibi, OUTA portfolio director for social services.

"Hlaudi Motsoeneng does not deserve one cent more."

"OUTA believes that Hlaudi Motsoeneng caused substantial financial and reputational damage to the SABC and we support attempts to claim back illegitimate payments made to him."

"We believe those claims should include -  but are not limited to - the salary paid while he was on suspension and the illegitimate R11.4 million bonus he secured during the dubious MultiChoice deal."

"Any pension or other benefits due to Hlaudi Motsoeneng should be forfeited to the SABC to compensate for his looting".

"We believe there's already enough justifiable cause to block any payouts to Hlaudi Motsoeneng, since his employment appointment was irregular, was based on falsified information which he provided, there is already credible information available about the illegitimate deals from which he benefited and we understand that the SABC interim board's own investigations are continuing".