Media Development and Diversification Agency: Public Hearings

Meeting report

COMMUNICATIONS PORTFOLIO COMMITTEE
27 March 2001
MEDIA DEVELOPMENT AND DIVERSIFICATION AGENCY: GCIS BRIEFING AND PUBLIC HEARINGS; ASSOCIATION OF MARKETERS; ASSOCIATION OF ADVERTISING AGENCIES; PUBLIC HEARINGS

Chairperson

: Mr N Kekana

Relevant documents:
GCIS draft position paper on Media Diversification and Development Agency
 

GCIS presentation document
Print Media
Association of Marketers
Association of Advertising Agencies
National Association of Broadcasters (NAB)
MEDIA 24
Freedom 0f Expression Institute and National Community Radio Forum

SUMMARY

 

The Government Communication and Information System briefed the committee on the draft position paper on the Media Development and Diversity Agency. The MDDA is intended to provide a platform for the previously disadvantaged to express themselves in a meaningful and informed way. The concentration of almost all media activities in the hands of a select few is not conducive to the new democratic South Africa. Discussions revolved mainly around issues of the independence of the MDDA, its funding as well as its non-interference in the functions of regulatory bodies and in the content of media reports.

Print Media South Africa presented a response to the draft position paper on the MDDA. It was evident that they support the idea of diversifying and developing the media in South Africa. It seemed however that they felt some of the expectations for the MDDA are overly ambitious as print media in South Africa is currently facing many challenges. They had also raised specific issues on the MDDA but most of which had already been covered in the discussions following the GCIS briefing.

The Association of Marketers supports the principle of media diversity and sustainable development. However they feel that many of the proposed interventions are harmful to the viability of the industry. They are opposed to an increase in the voluntary levy on advertising.
They also noted that some of the proposed functions of the Media Diversity and Development Agency (MDDA) overlap with functions of other statutory bodies.

The Association of Advertising Agencies agrees in principle with the intention to enhance media development and diversity. However, it is not convinced that natural market forces have been fully explored and acted upon. If the creation of the MDDA is unavoidable then the AAA will accept this but the extent of this government intervention (as currently proposed) is seriously questioned. Like the Association of Marketers they feel that statutory bodies already exist for the purpose of fulfilling some of the functions of the proposed MDDA.

The National Association of Broadcasters’ concerns were that the Agency’s mandate was too wide and overlapped with that of ICASA and the proposed funding model was too burdensome on broadcasters. NAB supported the adequate funding of ICASA to achieve diversity and it may not be necessary for a separate agency to be created.

The Freedom Of Expression Institute and National Community Radio Forum supported the establishment of the MDDA as a statutory body as a watchdog for freedom of expression. However the independence of such an institution would be a paramount concern. A constitutional amendment should be made to include the institution amongst the independent bodies contained in Chapter 9. The funding proposals for the Agency appeared unworkable and a prescribed levy was necessary.

The Communications Workers Union stated that a greater focus needed to be placed on the convergence of media technology instead of primarily on the print media. It suggested that more research be done into possible funding models.

The South African Communist Party expressed its full support for the MDDA but warned that it must be sustainable. They rejected arguments to downscale the mandate of the institution. The Party believes that it should be a permanent statutory body because five years was too short a period to achieve its objectives.

Media 24 stated that the mandate of the MDDA was overly elaborate to the point that it was not achievable. Media 24 supported the establishment of the MDDA as an agency not for gain in terms of the Companies Act. It argued that the state possessed the best distributor, the Post Office, and that it played an important role in distribution of printed media. It believed that the MDDA could help to integrate the distribution function in the Post Office.

Minister Pahad asserted that the Government has no intention of centralising control of the media. Its aim is to redress the imbalances in the media sector which favours a minority and marginalises a majority. He said he was open to a workable compromise on the proposed prescribed levy but appeared to be determined to implement it.

MINUTES
Government Communication and Information System (GCIS)
Mr Joel Netshitenzhe (Chief Executive Officer) presented the concept of the Media Development and Diversification Agency to the committee. The origins of the MDDA are to be found in a report released by Comtask, the Task Group on Government Communications. It recommends that government facilitate the process of setting up a statutorily recognised media development agency comprised of independently elected trustees. This agency will operate a statutorily recognised subsidy scheme for community and independent media in South Africa. The MDDA draft position paper is government’s attempt to give effect to this recommendation.

Mr Netshitenzhe stated that the point of departure is that continued progress toward a just and prosperous society requires the active involvement of an informed citizenry. That in turn requires meaningful access for all to information and meaningful freedom of expression. The democratic ideal requires that all sections of society should be afforded platforms to reflect their experience, aspirations and perspectives.

The GCIS is addressing the problem of the communications environment in two ways. First, the Multi-purpose Community Centres (MCC) are extending the infrastructure for government information and services so that this information will be more accessible. The MDDA on the other hand believes that if we address some of the fundamental problems in media, then the issues of content and diversity of opinion will take care of themselves.

Essential to the success of the MDDA initiative is that it would operate independently of government, the media industry, donors and beneficiaries. Mr Netshitenzhe pointed out that the MDDA would be governed by a Board with the confidence of all stakeholders, and be accountable to both Parliament and an Annual Review Forum of key stakeholders.

Mr Netshitenzhe envisaged the MDDA’s main focus as offering support, by way of funding or non-funding, to community and small commercial media including radio, television, print and '‘new media". He stressed the MDDA would not be allowed to have regulatory powers as there are sufficient regulatory bodies such as the Competitions Commission and the Broadcast Complaints Commission.

The proposal that funding for the MDDA should come jointly from government, the media industry and donors in equal measure is informed by the emphasis on the partnership that is needed in a venture of this nature.

Mr Netshitenzhe concluded that he was however well aware of the fact that stakeholders would be motivated by varying interests to participate in a project like the MDDA.

Discussion
Ms M Smuts (DP) said Mr Netshitenzhe had made the point that the MDDA would not infringe on broadcasting provisions, yet on page 46 of the MDDA draft position paper it states that the MDDA would work closely with ICASA to see that licensing requirements are met. She said this is contradictory. What is the position of the GCIS?

Mr Netshitenzhe said their position has always been not to interfere with the functions of ICASA. ICASA has not objected to the wording in the draft position paper, and its intention has always been clear.

Dr P Mulder (FF) referred to Annexure 3A on page 64 of the draft position paper and said some of its information seemed to be incorrect. He also referred to page 51 of the draft position paper and asked for clarity on the financing of the MDDA.

Mr Netshitenzhe said the annexure had been referred to them and any inaccuracies it contains will be rectified. On the issue of financing, he said financing is guaranteed from three sources ie
government, donors and private media. Mr Netshitenzhe said no new taxes have been imposed. Funds are derived from existing levies. He pointed out that GCIS had proposed a 0.5 % increase in levies but stakeholders had opposed it. Mr Netshitenzhe reassured the committee that discussions are ongoing to resolve the issue.

Mr R Pieterse (ANC) asked what role the media is going to play in rebuilding South Africa if they are still wrongly reporting that everything is "fine" in our country. How is this problem going to be addressed if the MDDA is not to interfere in the content of media reports?

Mr Netshitenzhe stated that the MDDA is one of the initiatives being used to bring about change in the media in South Africa. He added that in the larger media organisations, senior management positions are predominantly still occupied by white males. Diversity must be extended to the hierarchy of the media world as well.

Mr Abram asked the following questions:
- Who makes up the Annual Review Forum of the MDDA?
- Is the MDDA to operate at arms length from the government?
- Are there limits on the right to access to information? Ie for example, in the interests of national security

Dr D Pillay, Policy Director of GCIS, conceded that they had not identified all the stakeholders who are to be part of the Annual Review Forum as yet. He did state that its function would be to evaluate for example how funds are to be spent and whether targets have been reached.

Mr Netshitenzhe pointed out that the operation of the MDDA must be open and transparent. Various factors will outline the relationship between the MDDA and the government.

He emphasised the aim of the MDDA is to remove barriers that prevent people from having access to information.

Ms Smuts stated the media is making an effort to be politically correct, perhaps too great an effort. More importantly, the press should exercise its constitutional guarantee of freedom of expression. Ms Smuts felt that interest groups like advocacy and social groups should not be allocated funds by the MDDA. She did not feel taxpayers’ money should be used for this purpose.

The Chair felt it was incorrect for the DP make statements like Ms Smuts’. He said the committee meeting is not a platform for political statements.

Ms Smuts took offence to the Chair’s comment.

Mr Netshitenzhe said he does not wish to engage in an ideological debate. The important issue is that if people are not in possession of the means to disseminate their ideas then the MDDA is to assist them in providing them with those means. Failure to do this would mean the dissemination of information would remain in the hands of an elite few. However the right to impart ideas does not mean that each and every person will be given the means to do so. Set criteria will have to be met in order to qualify. The aim is to level the playing ground a little.

Print Media
Mr G Langmead, Chief Executive Officer of Print Media South Africa, said they greatly support diversity and development in the media and that many discussions with GCIS have ensued on the topic. He emphasised that transformation has permeated every part of Print Media.

A Print Development Unit (PDU) has been established to spearhead empowerment in the organisation. Mr Langmead said that the PDU encompasses Print Media’s initiatives for diversity and development. In order to give effect to these initiatives, it should be realised that engaging in comprehensive training programmes and fostering investment partnerships is critical.

Mr Langmead stated that enormous changes have taken place in the industry itself. Distrust of Print Media is as low as eighteen percent. He noted that marketplace penetration is good but could be better. Of much concern to Print Media is the steady decline in the circulation of its newspapers and magazines, etc. Mr Langmead attributes the decline to the fact that the disposable income of the public has diminished due to the gambling craze that has gripped South Africans. Advertising in print media lost to electronic media aggravates the problem. Mr Langmead was concerned hat people are choosing not to read because so many other things occupy their lives.

Print Media also faces the constant challenge of trying to cope with ever increasing costs. Mr Langmead pointed out that paper costs have increased by 22% in the past and are expected to increase by a further 30% in the near future. Despite these challenges, Print Media maintains that they have a role to play in diversifying and developing the media.

Ms N Stratton, the Manager of PDU, pointed out some of Print Media’s concerns on the draft position paper by the GCIS on the MDDA:
• The MDDA mandate is too broad as it allows for intervention into every aspect of the media.
• There is a threat of political contestation due to the perceived independence of the MDDA
• The document is not clear on what criteria will be used to choose organisations that are to receive funding.
• No mention is made of ways to inform organisations on how to elicit advertisements
• The document is silent on whether donors have committed themselves and whether the funding is sustainable
• No mention is made of how funds are going to be monitored and spent

Mr Langmead reiterated his commitment to the MDDA but felt that the MDDA should be approached in an incremental manner as opposed to it being launched once off.

Discussion
Ms S Vos (IFP) asked whether Print Media has given any thought to the empowerment of women in their organisation and the broader industry.

Mr Langmead stated that women are being empowered in their organisation. As for the industry, he made reference to Jane Raphaely and the great work she is doing to empower women.

Mr R Pieterse (ANC) stated that if there is a shift from print media to television and radio, and asked what is being done to get South Africans reading again. He also asked for more detailed information on transformation in Print Media as it relates to women and the disabled.

Mr Langmead stated that they are working with the print cluster. The focus is on how to get South Africa reading again. He added that they are committed to the project as it is obviously in their best interests.

Mr Abram asked what are the factors that contributed to the increases in the cost of paper.
Is there a window of opportunity to development for pulp production?

Mr Langmead conceded that he has limited knowledge on the paper industry. He did state that paper giants like Sappi and Mondi dominate the industry.

An ANC member asked what is important to Print Media, profit or enabling the environment.

Mr Langmead believed that sustainability is paramount. If organisations were enabled to publish in a manner that they should then they would become sustainable. Profitability is crucial to sustainability, therefore the one cannot exist without the other.

The Chair stated that the MDDA is not expected to interfere with content issues. He asked to what extent the SAPA should adapt to the changing environment.
The Chair also asked whether language is a barrier in the print media.

Mr Langmead stated that SAPA was formed years ago and has been a heavy drain on the industry ever since. He added that he would welcome discussions with SAPA on the issue.
Mr Langmead stated that they are trying to reach people in their own languages.

Presentation by the Association of Marketers (ASOM)
Ms H Thomson (Chairperson: Legislative and Policy Committee) made the presentation.

ASOM represents the majority of marketing companies. Its members are responsible for approximately 70 percent of advertising line revenue. They support the idea of a more diverse media. After all, the more media there is the better it is for the community and for marketing companies.

A problem they have with the MDDA is that there is some duplication. One example is that the MDDA has a capacity building function. The Skills Development Act already does this.

The proposed increase in the Marketing Industry Trust (MIT) levy is a cause for concern. There is already a voluntary levy on above the line advertising which is paid over to the MIT. The problem with increasing the levy is that marketing budgets tend to be fixed. This means if the levy is increased the general marketing budget will not increase to accommodate it, the budget for advertising will simply decrease. The amount of advertising placed will reduce.

Also, the constitution of the MIT does not provide for monies to be provided to the MDDA.

ASOM has raised various concerns with GCIS. They would like to work together to overcome problems so that there can be an MDDA of some sort. Ms Thomson noted that commercial media should be self-sustaining, and it should be sustained by advertising revenue. The purpose of the MDDA should be to subsidise non-viable, non-commercial media.

Generally the Association supports the concepts in the discussion paper.

Presentation by the Association of Advertising Agencies (AAA)
Mr Nkomo (Chairperson) and Ms Klatzko (Vice Chairperson) made the presentation.

Some of the points made include:
- The AAA is fully in agreement with the principle of promoting access to media by marginalised groups and to enhance media pluralism.

- The question is whether this could not be naturally achieved through market forces alone in which a diversity of private media can service the different information needs of a large number of cultural, political and socio-economic groupings of the population.

- They contend that natural market developments and options are presently underestimated and under-explored.

- There has been a shift in how advertising money is spent. For example, Vodacom now advertises through the soccer team ''Kaizer Chiefs''. This signifies a natural development of an alternative, economically viable vehicle to communicate with diverse audiences.

- Even if market forces have failed to establish media pluralism in South Africa the question is what role government should play. Even if the AAA is convinced of the necessity of extra market intervention such as the proposed MDDA, it would still question the extent of such intervention in terms of the proposed size, structure, functions and funding requirements of the MDDA.

- Statutory bodies already exist for the purpose of fulfilling some of the functions of the proposed MDDA.

- South Africa is a developing nation with many official languages. What is happening to these languages is sad; for example, grandparents now cannot talk to their grandchildren in their own languages because the grandchildren are speaking English at home. In the MDDA, there is a desire to use these languages to reach people. However the question to be asked is ''In ten years time do we want to have media in all of these languages?''

Discussion
Dr Mulder (FF) said it is sad but true that indigenous languages are being lost. How can one have an African Renaissance while there is a reversion to colonial languages? He asked if there is a market from an advertising point of view to subsidise these languages in the media. Secondly he asked if subsidising would not lead to a trap where if one starts subsidising then one must continue to do so [subsidising creates dependency].

Mr Nkomo replied that in terms of the language issue the Constitution must be understood. Every language in the country must be respected. Not all languages have grown at the same rate as English because their growth has been impeded. There are English words for things for which there are not Xhosa words (for example there is no Xhosa word for bytes). The challenge regarding language is huge, bigger than what the MDDA can do. However, SA must be realistic in terms of marketing. There are eleven official languages but in reality there are more than eleven languages spoken in the country. The richness of this must be preserved. However SA must be realistic in how it deals with the world. English will have to dominate. At the same time we must preserve our own culture.

Mr Pieterse (ANC) commented that community radio stations cannot even get licences from ICASA because they to have to wait lengthy periods of time and sometimes they do not even know how to fill in the application forms. He asked how the MDDA could contribute to speeding this up.

Mr Nkomo said the MDDA is going to be a resource. Maybe there should be simpler application forms or lawyers to assist people to fill in forms. Human resources is also an issue. If the MDDA is going to assist then it will need forces.

Mr Maserumele (ANC) asked which target groups the skills development programmes of the AAA focused on.

Mr Nkomo replied that Association of Advertising Agencies has a school of advertising. There are a few branches, one is in Cape Town. They have internships which provide on the job training. The internships are aimed at black students. They also deal with the relevant SETA to see what the requirements are for that particular industry.

An ANC member asked for a comment on the independence of the press. Mr Nkomo said the Constitution must be a guide. There must be enquiring minds, people must exercise their rights. At the same time, the public also has the right to be protected from the press.

The Chairperson asked for a comment on promoting a culture of people reading in languages other than English and Afrikaans. He said that Dr Mulder had made a suggestion to him that one page in particular newspapers could be subsidised for text in an indigenous language. He asked for a comment on the suggestion.

Mr Nkomo said that all means must be looked at as possibilities. But where will the money come from, he asked. He asked if the MDDA would be able to carry out this function in light of the funding proposal for the MDDA. This would be an additional burden. Also, the media must be sensitive to consumer needs. Having one page in another language would work in some papers but not in all.

The Chairperson asked if the media would support the concept by advertising on that page. He added that multilingualism also means phrases like ''yebo gogo''. Using this phrase for a big advertising campaign could have been rejected because it is not in English. Someone was brave enough to try it and it worked. This is the kind of creativity that the country needs. The Chairperson said that they would take up this again.

The committee was adjourned for lunch.

National Association Of Broadcasters (NAB)
 

Ms Kantor (Executive Director NAB) outlined the points of their presentation:
- the Media Diversity and Development Agency’s mandate is too wide and overlaps with that of ICASA.
- the proposed funding model was too burdensome on broadcasters
- The NAB believed that the goals could be better achieved through a more focused approach.

Ms N Momodu (NAB Radio Committee) looked at the mandate of the MDDA and said NAB was concerned with the following roles:
- making recommendations on codes of conduct
- recommendations to the regulator
- being proactive in competition issues
- being able to intervene in ownership and control issues
- being able to monitor and lobby the SABC.
She stated that the NAB believes that there is an overlap with the role of ICASA on many of the issues. This overlap would result in an inefficient use of resources and thus the new agency should be empowered to perform functions not within ICASA’s mandate.

Mr R Abrahams (Chairperson NAB) stated that the proposed budget was very high and that the estimate of 221 stations was not achievable. There were approximately 40 licenced stations in six provinces that had taken ICASA nearly three years to achieve. Mr Abrahams suggested the budget could be reduced if the mandate was more focussed, duplication was avoided and the number of stations was more accurately calculated. He stated that the broadcasting industry was over-burdened and that ICASA agreed that broadcasters should not have to pay more than they already do since they already contribute to the diversity of the industry in line with ICASA requirements. Any additional burden would threaten the viability of the industry.

Ms Kantor concluded that NAB supported the development of diversity initiatives, the funding of community radio and the adequate funding of ICASA to achieve diversity. She again voiced the concern of NAB over the overlap and erosion of ICASA’s mandate and any further levies on broadcasters. She proposed that alternative funding mechanisms be investigated and that it may not be necessary for a separate agency to be created.

In answer to the Chairperson’s question as to whether NAB had properly considered the role that the MDDA can play, Ms Kantor replied that NAB was not saying there was no role for the MDDA but rather that the mandate was too large and should be reduced to maintain focus.

Freedom Of Expression Institute (FXI) and National Community Radio Forum (NSRF)
Mr Mfundisi (CEO NCRF) stated that the National Community Radio Forum had been working with the Freedom Of Expression Institute to gain quality input and were in the process of setting up a policy unit.

Ms Duncan (Head: Policy and Research FXI) stated that the MDDA was a watchdog for the right to freedom of expression and could therefore make a proactive contribution towards the realisation of this right and it should not be seen as merely a funding body. FXI and NSRF supported the establishment of the MDDA as a statutory body but hinted that the independence of such an institution would be a paramount concern. She suggested that a constitutional amendment be made to include the institution amongst those contained in Chapter 9 of the Constitution. She stated that the current funding proposals were unworkable. Voluntary funding could not work and only a prescribed levy would achieve the objectives of the MDDA. She suggested that the SABC be exempt from the levies but that they develop a dividend policy and plough that money back into the sector.

Discussion
A committee member voiced his concern over the basics regarding who should create the conditions conducive to accessing information in the rural areas. He commented that there were no provisions for radio studios let alone a post office in many areas.

Ms Vos (IFP) asked whether the presenters believed that the media could do without the MDDA.

Ms Duncan replied that many people in the industry would like to wish it away and that they only gave a politically correct acceptance to the proposal but when you examine their presentations in depth, a different picture emerged.

Communications Workers Union (CWU)
Mr Matshikiza (Head of Media) stated that GCIS had done good research on the subject and that it would serve to deepen democracy. He noted that the GCIS draft discussion paper omitted certain important issues raised by Mr Pahad in the foreword to the document, especially the idea that certain schools of thought had been totally suppressed by the Apartheid State through legislation such as the Suppression of Communism Act of 1950.

He stated that a greater focus needed to be placed on the convergence of media technology instead of primarily on the print media. Mr Matshikiza suggested that more research be done into possible funding models and that these inputs were merely preliminary points and he hoped to make further input at a later date.

South African Communist Party (SACP)
Mr Jara (Media Officer) expressed full support for the MDDA but warned that it must be sustainable and he rejected arguments to downscale the mandate of the institution. Mr Jara stated that this was an important opportunity to reflect on the transformation of the media as a whole but raised a caution against a freedom of expression that was only available to the elite. Mr Jara did not think that a constitutional amendment was the best approach to establishing the MDDA but stated that the MDDA should be accountable to the goals of the Constitution and the Reconstruction and Development Programme (RDP). Mr Jara elucidated the point that the state should be a key driver of the process and that it should be a permanent statutory body because five years was too short to achieve the objectives it sought. He also stated that the institution should be prepared to fund community projects if they provided a positive social outcome even though they were not financially viable. This proposition, he clarified, would need very clear criteria to guide the process.

Mr Jara also raised the issue as to who foreign stakeholders in our media were accountable to. In conclusion Mr Jara called for a media transformation summit to be held.

In answer to Ms Smuts’ (DP) question that he masked his agenda to bring about a social democratic revolution, Mr Jara stated that he was not hiding his aims. He questioned what foreign investment in South Africa’s media had done to bring about diversity.

MEDIA 24
The panel consisted of Mr de Swart (Managing Director), Mr Malherbe (Executive Head: Newspapers) and Ms Krusche (Legal Adviser). Media 24 stated that they were the publishing, printing and distributing arm of NASPERS for their newspapers and magazines. Mr De Swart (Managing Director) stated that they support and promote diversity and believe that the market place of ideas should reflect this diversity. He stated that they allowed their editors freedom of expression in their opinion columns. The free market system created the greatest diversity and this was contrasted with the example of Eastern Europe where freedom of expression was suppressed in the past.

Mr de Swart believed that the role of the MDDA was overly-elaborate to the point of being unachievable. He supported the establishment of the MDDA as an agency not for gain in terms of the Companies Act. Mr de Swart broached the topic of a common carrier and questioned who would pay for it and would it be able to fulfil its role. He argued that the state was in possession of the best distributor, the Post Office, and that it played an important role in distribution of printed media in many parts of the world. He stated his belief that the MDDA could help to integrate the distribution function in the Post Office.

A member asked if the distribution process was profitable and if not why Media 24 was still involved in this activity. Mr de Swart answered that it was a profitable endeavour and that if a common carrier was a priority for Government then they should subsidise it.

Minister Pahad (Office of the President)
The Minister thanked the Committee for organising the hearings and welcomed the participation received thus far. He said that it should be clear that the Government has no intention of centralising control of the media. The aim of Government is to redress the imbalances that exist in the media sector, which favours a minority and marginalises a majority.

The Minister stated that there had been a lot of opposition to the proposed prescribed levy but that Government could settle the dispute through a statutory requirement if it so wished. The Minister also noted stakeholders saying they were going to fight the levy tooth and nail could not threaten Government. However he was open to a situation of a workable compromise and that if a balance could be found the process would be able to move forward. He stated that if Government decided to introduce legislation it would still have to go through the Portfolio Committee for comment.

The meeting was adjourned.