Communications minister considers levy on streaming services to fund SABC

Minister of Communications and Digital Technologies Solly Malatsi has revealed that a streaming levy is being considered as one of the potential solutions to buoy the financially struggling SABC.

In a written response to a parliamentary question from IFP MP Khethamabala Sithole, Malatsi said the streaming levy will exempt those who pay TV licence.

He said the current TV licence model was inadequate due to low compliance, high collection costs, and inflation eroding its value.

“To address this, the Department of Communications and Digital Technologies is exploring several alternative funding models,” he said.

According to the SABC's annual report for the 2023/24 financial year, TV licence fee collections have fallen short of expectations as 2.1 million (19.02%) TV licence accounts were paid as of the end of March 2024.

SABC CEO Nomsa Chabeli said the under collection was being experienced globally by all public broadcasters.

“It is clear that many households that are already under significant financial pressure do not view the TV licence fee as an equitable burden to bear,” Chabeli said.

Malatsi said one of the funding models being looked at was a media subscription levy.

“A charge on local and international streaming services (will be) exempting TV licence holders. This modernises funding and improves compliance through automatic collection,” he said.

However, Malatsi cautioned that the streaming levy leads to increased subscription costs and requires regulatory alignment.

Streaming expert Lesley Adams told the SABC that many broadcasters around the world were battling with funding due to the decline in broadcast television and advertising amid a move to a streaming environment.

Adams said it would not be the first time international streaming services were paying levies, as the EU passed a law in 2018 to make them contribute to the local industry.

“It is not unique to the South African experience. It is adopted by different countries already in EU, the United Kingdom,” he said.

Adams also said it would be interesting to see how the streaming levy will be implemented.

“Depending on how it is implemented, should the levy be taxed on consumers, there could be an increase in (subscription) cost as it will be passed onto the consumer,” he said.

Previously, the SABC had proposed that pay service providers such as MultiChoice and Netflix take on the responsibility of collecting TV licence fees on behalf of the broadcaster, similar to how municipalities manage traffic fines.

In addition to the streaming levy, Malatsi said another option considered was the household or business levy that will be collected by SARS and maintained as an independent SABC fund.

“It offers stable revenue and lower collection costs but may face public resistance as an added tax, requiring legislative amendments and affordability safeguards.”

He added that there was a consideration of a Conditional Treasury Grant that will be a temporary measure to sustain the SABC while a long-term model was finalised.

“It provides immediate relief but is unsustainable and may impact the broadcaster’s independence.”

The minister said the SABC has asked his department to reapply for a bailout government-backed loan guarantee after obtaining an unqualified audit outcome.

“This would enable the broadcaster to secure an overdraft facility and fund critical infrastructure. While this provides immediate financial flexibility, the SABC must still repay the loan, making long-term revenue stability essential.”

Malatsi said he has approved the final terms of reference for a feasibility study, which will develop a clear business case for the SABC’s funding model.

“This study will assess current revenue streams, explore new funding options, and consult stakeholders to ensure a practical and sustainable solution.”

The proposals on funding SABC come as the future of the SABC Bill hangs in the balance.

Late last year, Malatsi withdrew the controversial bill from Parliament, arguing that it did not address the sustainable funding model for the SABC, among other things.

The portfolio committee deemed his action ill-advisable, and Minister in the Presidency Khumbudzo Ntshavheni said he had not followed the Cabinet process to withdraw it.

mayibongwe.maqhina@inl.co.za