South African Broadcasting Corporation: briefing

Meeting report

COMMUNICATIONS PORTFOLIO COMMITTEE
21 September 1999
SABC BRIEFING

SUMMARY

The SABC briefed the committee on:
- The basic corporate structure of SABC which includes both a board appointed by the portfolio committee and a group executive that effectively runs operations.
- Television - how SABC is performing and who its audience is.
- Radio - who is SABC's audience and how much coverage do SABC provide (especially with regards to their Public Broadcasting Service stations).
- SABC's state of readiness for Corporatisation. This part of the presentation was based on a draft document that has yet to be seen by the SABC board or the minister. Its first discussion by the task committee on corporatisation would be that afternoon.
Many of the questions focused on the possible perception that the SABC remains the propagandist of the governing party.

MINUTES
SABC Corporate Profile
Mr Hawu Mbatha, Group Chief Executive, spoke on how the SABC fits together:

The SABC Board
The SABC is controlled by a Board whose members are selected through public hearings and appointed by the President on the recommendations of the Parliamentary Portfolio Committee on Communications. The Board is header by a chairperson, who is a non-executive director. The Board is responsible for matters of policy.
The Board presently comprises:
- Prof Paulus Zulu (Chairperson)
- Dr Brigalia Bam (Vice Chairperson)
- Ma Anna Boshoff
- Dr Paul Davis
- Dr Frits Kok
- Prof Mbulelo Mzamane
- Dr William Rowland
- Ms Masepeke Sekhukhuni
- the Rev Gabriel Setiloane
- Prof Jabulani Thembela
In terms of the Broadcasting Act (no 4 of 1999) a new Board is scheduled to be appointed by November 1999.

SABC Group Executive
This runs SABC's operations and consists of:
- Mr Hawu Mbatha Group Chief Executive
- Mr Neil Harvey Chief Operating Officer
- Ms Charlotte Mampane Chief Executive: Radio
- Mr Molefe Mokgatle Chief Executive: Television
- Mr Anton Heunis Senior General Manager: Audience Services
- Mr Trevor Ormerod Chief Executive: Sales and Marketing
- Mr Enoch Sithole Chief Executive: SABC News
- Mr Martin Slabber Senior General Manager: Operations
- Ms Cecilia Khuzwayo Senior General Manager: Human Resources
- Ms Thaninga Shope Senior General Manager: Communications and Marketing
- Mr Ronnie Bracks Chief Legal Advisor

Mr Mbatha gave brief details on each operations division:
Radio Division
This consists of 19 Radio Stations reaching a combined average daily adult audience of about 14 million. It is divided into two portfolios.
- Public Service Radio
- Commercial and Community Radio Plus
- We also have an external radio service in 4 languages: English, French, Portuguese and Swahili

Television Division
This consists of:
- 3 Full-spectrum free-to-air channels (plus Bob-TV which has been integrated with SABC) reach a daily adult audience of 12 million.
- A 24-hour pay-TV news channel beamed at Africa.
- A 24-hour pay-TV entertainment channel beamed at Africa.

News Division
This feeds the SABC's radio services and television channels with round-the-clock, up-to-date news and current affairs programming.
-TV News
- Radio News
- News Input
- News Output
- Current Affairs

Marketing Divison
This controls Ad-renalin, Airtime Marketing, the SABC's advertising sales house tasked with selling advertising time on the corporation's broadcasting services.
- Radio Active
- Action Stations
- Marketing Services

Operations Division
This includes the following:
- Henley TV Facilities
- Air Time Outside Broadcasts
- RadioPark Studios
- Logistical Services
- Engineering Services
- Broadcast Information Technology
- Technical Liaison
- TV Productions
- Regional Operations

Corporate Communications
This is a contact point with SABC for audiences, stakeholders, government and international interests.
- Media Liaison
- Public Relations
- Corporate Marketing
- Corporate Publications
- Social Investment
- Parliamentary Liaison
- Audience Liaison

Audience Services
This administers the television licence system
- TV licence Management
- TV Licence Information
- Business and Dealers Accounts
- Field Operations

Human Resources Division
This includes the following:
- Group Human Resources
- Group Training and Development
- Group Labour Relations
- Decentralised Human Resources Operations

Finance Division
This is responsible for group financial and remuneration systems, as well as decentralised financial operations.

Business Enterprises
This is responsible for marketing the SABC's broadcast and related products.
- International TV Programme Sales
- National TV Programme Sales
- Radio Programme Sales
- Merchandising
- Special Projects
- Teletext Service
- Audiotext Service
- TV Archives

Television Portfolio
Mr Molefe Mokgatle, Chief executive: Television, gave an overview of SABC's Television operations.

SABC has three TV channels:
SABC 1 - This is the channel for the young and the young at heart, national population coverage: 83%
SABC 2 - Aims to bring Africa to Africa while harnessing family values, national population coverage: 85%
SABC 3 - Aims to deliver entertaining and insightful programming to those in the upper income brackets, national population coverage: 74% by 1 December 1999

SABC also covers all sport except rugby (due to financial constraints) and has an educational programme service.

Mr Mokgatle produced figures on television audiences since 1994. These show steady viewing figures for SABC channels and noticeable improvements for SABC 1 since the re-launch of SABC in 1996 (it now enjoys 47.4% of the market). The figures also reveal the impressive growth of e-TV since its launch in 1998 which probably accounts for SABC 2's recent decrease in viewing figures. Mr Mokgatle produced figures for how audiences broke down by population and language group. He suggested that language is not an issue that causes people to switch off a channel. Afrikaans speakers are the biggest audience group for e-TV and M-Net - English language channels. Mr Mokgatle was also proud to announce that the most popular programme on all TV channels is 'Generations' - both a SABC and South African programme.

Radio Profile
Ms Charlotte Mampane, Chief Executive: Radio gave an overview of SABC's radio operations. She stressed the importance of radio as a vehicle for mass communication in South Africa. On average South African households possess two radio sets so radio is currently a crucial way to reach all South Africans. Within this, SABC radio aims to deliver distinctive and compelling radio programming through sound business practices. Ms Mampane produced a slide on the structure of the radio division which is divided into three areas: (i) Research and marketing; (ii) Commercial Radio; (iii) Public Service Radio - these are the much needed language stations (PBS stations). PBS stations actually account for 83% of listeners to SABC radio. Ms Mampane produced detailed figures for listeners to all SABC stations and for coverage by SABC stations. It is SABC's current target for PBS stations to cover at least 80% of the language group they are aimed at. The current situation is as follows:
- Thobela FM - 78% (of language group)
- Ukhozi FM - 80%
- Umhlobo Wenene FM - 83%
- Motsweding FM - 86%
- Munghana Lonene FM - 84%
- Phalaphala FM - 94%
- RSG - 87%
- SAfm - 95%
- Lesedi FM - 81%
- Ligwalagwala FM - 78%
- Ikwekwezi FM - 75% (improvements are currently underway to increase coverage)

Ms Mampane produced figures on radio revenue. Although revenue is on the increase, SABC's share is on the decrease. This has been put down to the introduction of competition and to various economic problems within the industry.

With regards to Educational Radio SABC is mandated by the Broadcasting Act, 1999, to provide;
'...significant amounts of educational programming, both curriculum-based and informal educative topics from a wide range of social, political and economic issues, including, but not limited to, Human Rights, Health, Early Childhood Development, Agriculture, Culture, Justice and Commerce and contributing to a shared South African consciousness and identity.'
Ms Mampane believes that SABC Radio is adhering to this mandate and not just within educational programming. SABC Educational Radio also runs a partnership programme which provides airtime for outside producers and sees consultation with subject experts.

SABC is currently meeting its targets for Religious and Cultural broadcasting. On average PBS stations' weekly broadcasting includes:
- 5.8% Christianity content
- 1.9% African Traditional Religions / Culture content
- 1.4% Inter-Faith content

All SABC stations support various social causes in their specific target areas of - HIV / AIDS, environmental issues, unemployed youth, aged and disabled and the Natural Disaster Fund. More than R1million worth of free advertising for such organisations was provided in 1998/9 through National Public Service Announcements.

With the next millennium in mind SABC Radio has commissioned research to identify gaps between existing products and audience needs and is converging the technology involved in radio.

SABC's state of readiness for Corporatisation
Introduction:
The restructuring of the SABC is aimed at:
- The incorporation of the SABC as a limited Public Company in terms of the Companies Act of 1973.
- To align the SABC with the Broadcasting Act of No.4 of 1999.
- To achieve a tangible separation of the SABC into two separate operational entities, namely:- public and commercial services.

The SABC and the Ministry of Communication has jointly established a Technical Task Team to oversee the process. The Task Team will require assistance from an Adviser/Consultant to assist with the execution of the assignment. The SABC will go through the normal tender process to select one adviser/consultant. The Adviser will be required to sub-contract any additional skills needed. Ultimately the SABC Board will present recommendations, which will be approved by cabinet.

The Scope of the proposed Assignment:
Phase 1: Corporatisation of the SABC
a) Registration of the SABC as a Limited Company in terms of the Companies Act.
b) Preparation of the Articles and Memorandum of Association.
c) Appointment of new Board of Directors.
d) Establishment of an Executive Committee.
e) Financial and staffing issues.
f) The valuation and transfer of assets and liabilities.
g) The settlement of liabilities and other obligations.

Phase 2: Splitting of public & commercial Services
- Conduct Activity Based Cost Accounting study, which should include all elements of the business.
- Analyse SABC's accounts, projections and operational data.
- Analyse SABC's asset base and investments.
- To identify cost drivers in shared areas.
- To study the implications of the split on licences, obligations and concessions and recommendations in this regard.

The aim is to determine the most equitable way in which sharing of common infrastructure and services can be attained.

Phase 3: Strategic Review and Positioning of the Commercial Services
- Explore various options to recommend a strategy for positioning with the broadcasting industry.
- Review operations, financial and information management systems, making recommendations on new strategies to maximize value of SABC commercial.
- Take into account convergence issues, sector and institutional restructuring.
- Analyse financial structure and costs drivers in order to make recommendation.

Implementation Plan:
A detailed implementation Plan with specific deadlines to be prepared.
The plan will be utilised to manage and monitor the implementation phase.

Recommended time frames:
- Mid October the successful consultant begins the process
- December 1999 - Corporatisation Phase will be completed and
splitting the Corporation into Public & Commercial services.
- Beginning April 2000 - implement a new structure
However the plan will be revised based on the recommendations of the consultant.

Estimated Costs:
- Costs will depend on the time frames
- Time frames will depend on the availability of funds from the SABC and the contribution from Government.

Process forward:
The SABC will report back to the (Task Team )sub-committee meeting of the
SABC and Department of Communications scheduled for 21st September at
14:00 in Cape Town.

Questions to SABC
Ms O. Mndende (UDM): I am very concerned about SABC's language policy. Is it your intention to develop a nation of black Europeans? Are you intentionally trying to portray the superiority of English and inferiority of African languages to our children?
Response from Mr M. Mokgatle (Chief Executive: Television): SABC is committed and sensitive to the language issue. We are hosting committees of language groups and marginalised groups to address issues. However we have limited resources. It is very difficult to give substantial recognition to all eleven official languages and still generate revenue and quality programming.

Ms Mndende (UDM): I do not believe the figures on cultural and religious programming! I think that there is even less than these figures suggest. The SABC is not listening to people but simply imposing on people the programming that it thinks is best.
Response from Ms C. Mampane (Chief Executive: Radio): I think you perhaps misunderstood the figures given out. They showed the percentage of cultural and religious programming within the total SABC weekly programming and not the number of cultural and religious programmes available on SABC. We are currently meeting our target quotas in cultural and religious programming.
Response from Rev Gabriel Setiloane (SABC board member): I hold a seat on the board to promote traditional African culture and religion. We are focusing on ATR - African Traditional Religions. This tries to recognise the totality of religion in life. There have been noticeable changes in SABC programmes within the last year and this issue is receiving tremendous attention.

Mr C. Morkel (NNP): There is currently a perception in my party that the SABC is once again becoming the propagandists of the governing party. What is SABC doing to ensure that this perception does not become the view of the majority of people and to improve SABC's image amongst those who are outside the mainstream and the establishment?
Response from Mr Mbatha (Group Chief Executive): It is categorically untrue that we are the propagandists of government. SABC operates from a position of integrity with no hidden agenda. I think that addressing these perceptions would only be relevant if we had guilt to hide but we have not. I think the fact that we are delivering quality programmes that are popular with the public speaks for itself. All I will say is that previously South Africa was run by a government that only represented a minority. It was impossible that SABC could be a public broadcaster in this environment. SABC is now audience driven so it represents the programming desires of the majority of the people. The present government also represents the majority of the people so it is possible that links might occur. These links are not intentional. We will continue to represent our audience without fail and we are not going to cosmetically remove ourselves from a ruling party that represents the majority of the people. At the same time we are consolidating our links with minority groups and providing avenues for them to contact SABC.

Ms W. Newhoudt-Druchen (ANC): There have been allegations of corruption against SABC and an investigation has occurred. Is there a report on the investigation? When will we be able to see this?
Response from Mr Mbatha: Various audits are going on and once complete reports will go to the SABC board. They will then decide what action to take.
Mr T. Makunyane (ANC): There is much anxiety to see the reports on these audits.
Prof P. Zulu (Chairperson SABC Board): The situation regarding investigations is as follows. A task team was set up at the end of April to investigate freedom of expression at SABC, editorial independence, possible external and internal influences on programming and employment policies. Various outstanding cases against the SABC needed to be cleared first so investigations did not begin until July. Research on SABC news bulletins was commissioned and comparisons done between SABC and other broadcasters. The team's report will be ready in November when it will be discussed by the SABC board. I cannot give you anymore information than this.

Ms S. Vos (IFP): What is SABC's view on e-TV's success?
Response from Mr Mbatha: E-TV is very new on the market but has been successful in making itself available to very large areas. It seems inevitable that people will be investigating what it is like.
Response from Mr Mokgatle: When e-TV was launched it had a low profile and many internal problems. However it has achieved success within eight months. It is worrying to consider how well it might do without problems!

Ms S. Vos (IFP): Do you think that space could be made for greater regional input into TV. Could the massive listening figures for PBS radio stations be a message for TV programming?
Response from Mr Mbatha: SABC does try to cater for the regions. We have a presence within all provinces which allows us to gather local news. Radio is much easier as we have built on already established stations. The costs needed to establish regional TV stations are currently unaffordable.

Mr R Pieterse (ANC): SABC has very limited signing. How are you trying to improve this, do you have targets or a timeframe for improvements?
Response from Mr Mokgatle: I have noted this concern but would say that we are currently unable to expand signing because of financial constraints.
Mr Kekana stated that this sort of comment that brushed away the question was no longer acceptable and that this committee was very much committed to improving services to all disadvantaged groups, especially the disabled.

Ms W. Newhoudt-Druchen (ANC): I have been asking this question for five years without receiving a proper answer. SABC broadcasts many overseas films and programmes that are already subtitled. I know that SABC has the facilities to show these subtitles but they are actually removed! Why?
No answer was given to this question and Mr Kekana again reiterated that the SABC needed to show the committee a clear strategy towards the disabled.

Ms D. Smuts (DP): Who carries Editorial control at SABC? The Freedom of Expression Institute has quizzed SABC on this without receiving any answers. We need more than Mr Mbatha's promises on integrity. We need a clear understanding of the structures that lead to editorial decisions especially within news and current affairs.
Response from the Deputy Chief Executive: SABC News: There have been many negative reports of SABC's lines of reporting and responsibility. However we have a very clear structure within SABC which is a product of a lengthy transformation process. Final editorial decisions lie with the Chief Executive of News [Mr E Sithole] who as a member of the Group Executive is answerable to the SABC Board. Through this he is also accountable to the public as the SABC board is appointed by public process. Below the Chief Executive are editors who are the operational heads within the newsrooms. They are the ones who are really in charge of the products SABC produces. Below the editors are various news desks producing the reports and also regional editors who liase with editors through a regional co-ordinator. Within radio there is more decentralisation with regional editors at each station who have editorial independence. All heads of news desks meet daily at 8am to discuss the day's news. At 11am production officers meet to plan the day's productions. At 3.30pm editors and producers meet to plan what news will go on air in the evening. Although there is an editor-in-chief, he can be overruled if the majority of editors disagree with his decisions. SABC believes that this is a consultative process and that an editorial code dictated by the need for coverage to be fair, accountable and balanced ensures the integrity of SABC productions. The IBA report on our electoral coverage stated our programming was fair and accurate. We do have plans to increase decentralisation by integrating TV and regional radio services. We also intend to increase the checks and balances within our system by totally separating news gathering and production. Finally I would state that no evidence has ever been produced to back up the allegations made against SABC.

Dr P. Mulder (FF): SABC went through a difficult financial period following 1994. Now it seems that a very positive financial period is being enjoyed. However this is probably due to the effects of recent rationalisation. What are SABC financial projections for the future? Does SABC foresee the need to appeal to government for extra funding?
Response from Mr N. Harvey (Chief Operating Officer): We have released figures for the eighteen months ending March 1998. These do look very positive showing a R105million profit. However this period included two Octobers, Novembers and Decembers - the most profitable advertising period - so the figures may be misleading. The figures for the last twelve months will be presented to the minister soon and we do expect them to be positive. SABC needs to make a R100million surplus each year to continue to develop and be independent of government funding. We expect to make this surplus in the coming years.

Mr S. Mongwaketse (ANC): How far is SABC working for the people in rural areas? People might pay their licence fees and might have a reliable electricity supply but the service they receive from SABC still seems poor compared to that received by urban areas. Do you have a programme to improve service delivery to rural areas?
Response from Mr Mbatha: We are currently working to make sure that our radio services cover 80% of the population but we are now dependent on Sentech to set up the new sites we have requested. With regards to TV we do have roll-out plans, we are addressing the poor services to many areas and we are keeping people informed when we have problems servicing an area. In future we hope to integrate terrestrial services with satellite services to improve coverage but for now we are doing all within our means.

Ms O. Mndende (UDM): The outsourcing of programmes to rural areas only benefits those who are advantaged there.
Response from Mr Mbatha: I disagree. We have a programme of social investment that means we can aid small producers in enhancing their capacity to produce programmes. This programme also means we are recruiting and training young people.

Many questions raised were not answered partly due to time constraints. Mr Kekana said that he expected SABC to report back to the committee on the following areas:
- Economic efficiency - SABC must report on measures taken to be viable. The executive must give the committee assurance that clear performance indicators are in place and show how resources are being used.
- Competition - SABC must show how it is adopting to an environment that includes competition.
- Universal services - There are concerns about the rolling-out of services to rural areas and to African communities especially.
- The development of a clear policy on the disabled, youth, and gender.
- Restructuring - The committee looks forward to hearing more about the restructuring occurring following the Broadcasting Act.