MultiChoice backs SABC on home fee

• Even households with no TV to pay for broadcasting • Sars nominated as possible collector

MultiChoice, the pay-TV company that operates SA’s largest direct broadcast satellite service, DStv, has thrown its weight behind proposals by the SABC to introduce a public broadcasting household levy to support the ailing state-owned enterprise.

If implemented, such a levy will affect all homes whether they own a TV set or not, putting more pressure on financially strained households whose incomes have been hard hit by the coronavirus pandemic.

The suggested levy will replace the TV licence fee. No amount has been stipulated yet.

According to the proposal, the current TV licence fee system should be scrapped and replaced with“a device independent, tech- neutral household levy for public broadcasting, which would levy all households, with exemption for the indigent and discounts for pensioners”.

The levy is linked to the public’s ability to access public broadcasting content rather than the consumption of that content, according to the SABC’s submission. The National Consumer Commission, the primary regulator of consumer-business interaction, which is tasked with ensuring the economic welfare of consumers, said it was not commenting on the matter at this stage as it is still a proposal.

MultiChoice was dragged into the matter after the national broadcaster and the department of communications & digital technologies proposed that payTV operators be tasked with collecting the levy.

While MultiChoice has said it supports such a levy, it vehemently opposes being charged with collecting the fees.

The SABC, which has been in financial turmoil for several years and has often needed government bailouts to continue operating, funds 15% of its operations through mandatory licence fees. It is heavily reliant on advertising and revenue from the licence fees to stay afloat. It receives 85% of its revenue from advertising, sponsorships and other commercial partnerships, 3% from the government and

12% from TV licence fees.

However, the SABC says at least 76% of households do not pay a TV licence fee. This is largely due to pressure on incomes as well as unhappiness with the state of the public broadcaster, which has been in the headlines for all the wrong reasons, including accusations of political interference.

The broadcaster recorded a R511m loss for the 2019/2020 financial year. Over the past decade it has made a profit in three years, from 2011 to 2013.

As part of measures to change the broadcasting landscape in the country contained in a draft policy statement, the department of communications is pushing for the introduction of the household levy to ensure the SABC is “properly funded”.

The proposal will require backing from the Treasury, which can introduce such a levy, but deputy minister of communications Pinky Kekana told parliament recently that the department can set the ball rolling by engaging with the relevant stakeholders.

The contentious part of the proposal on the table has been the introduction of new rules to compel pay-TV operators such as MultiChoice to collect fees on behalf of the public broadcaster.

MultiChoice spokesperson Collen Dlamini, in stating that the company does not support the calls for pay-TV operators to collect fees on behalf of the SABC, said the “proposal has lots of problems and is completely inappropriate and unfeasible and should not be given any serious consideration”.

“There are various legal reasons and practical problems why TV licence fees cannot be collected by subscription broadcasters and streaming services. For instance, people subscribe to multiple services, which begs the question, which of these services would be responsible for collecting or enforcing payment?” Dlamini said.

MultiChoice said, however, the current TV licence model should be eradicated as it is outdated and not in line with international best practice.

Dlamini said: “We are in favour of a more effective ringfenced public broadcasting levy, collected by Sars [the SA Revenue Service].”

MultiChoice’s financial modelling shows that a flat rate for TV licence fees collected by Sars would far exceed the television licence fees that the SABC currently collects.

For example, if the revenue service had collected the R265 TV licence fee from taxpayers in the financial year ended March 2019, it would have raised R5.9bn in total revenue for public service broadcasting, compared to the total revenue of R968.1m collected by the SABC

“We believe the TV licence fee collection challenges cannot be addressed by simply shifting this responsibility to subscription broadcasters and streaming services,” Dlamini said.

Nonprofit media watchdog Media Monitoring Africa director William Bird also backed the introduction of a levy to support public broadcasting.

“The idea is to improve the collection mechanism for a public information levy, rather [than] calling it a TV licence. There are good international examples,” Bird said, citing Germany, Cyprus, Finland, Spain and Italy, where a “sort of levy or tax” is in place to support public broadcasting across the nation.

However, he said, it makes sense for MultiChoice to be charged with collecting the levy considering that more than 50% of all homes subscribe to DStv. Improved public funding would increase the ability of the public broadcaster to function independently, which is crucial for a stable democracy, Bird said.

On Monday the public broadcaster said it would not be commenting further on the matter.