Third Quarter Report FY 12/13
PCC
23rd April 2013 April 2013
VISION
Broadcasting for Total Citizen Empowerment
MISSION
To be a people centred, content driven, and
technology enabled,
Strategically focused and financially
sustainable public service
VALUES
Conversations and partnerships
Restoration of human dignity
2
SABC Corporate Plan 2012-2015 3
AGENDA
2 Performance against KPI’s
3 Financial Performance
4 The Government Guarantee
5 Progress - Turnaround
6 Clean Audits
7 Progress – External Audit Findings
2
1 Executive Summary
Questions & Answers
SABC Corporate Plan 2011
1 Executive Summary
Executive Summary The SABC remains committed to delivering against its mandate
to educate, inform and entertain as contained in the Broadcast
Act as well as the Licence conditions stipulated by ICASA
through the Radio and Television Platforms whilst fighting off
increased competition on these platforms.
The Corporation remains committed to stabilising the operating
environment through
• Appointments made at Group Executive level;
• Efforts to right size the organisation in preparation for
successful DTT Operations,
• Concerted efforts on Turnaround; and
• Focus on improving the organisational internal control
environment.
5
Radio
• SABC Radio reaches 26.3 million adults aged 15+ (76% of the
population) on a weekly basis.
• At a 67.4% national audience share, the Radio Division is
currently at its highest level in five (5) years and also boasts a
solid share of 51.7% in the LSM 7-10 market.
• The division continues to deliver against ICASA license
conditions per genre as well as local music quotas.
6
Radio
7
2.4
2.5
2.7
3.2
5.4
5.7
6.6
6.8
10.1
15.1
0 10 20 30
Jacaranda FM
5FM
East Coast Radio
RSG
MOTSWEDING FM
THOBELA FM
METRO FM
Lesedi FM
Umhlobo Wenene FM
Ukhozi FM1
8 of the top 10,
out of 227
Radio stations
Nationally are
SABC Radio
Stations.
Source: SAARF RAMS March – October 2012
Television Whilst delivering against, mandate and license conditions, the Television (TV)
Division faces challenges in delivering against its Audience targets:
• Steady growth demonstrated by competitors is hampering the SABC‟s ability
to maintain and grow Audience Share.
• TV Division delivered 52.23% share in Performance Period (05:00-23:00) at
the end of the quarter under review.
• This declining trend is not unique to the SABC, etv has also showed a
decline of 1.67% since the end of the First Quarter.
• This decline for Free To Air (FTA) broadcasters is juxtaposed by a growth of
2.47% in pay television from the first quarter of this financial year.
8
Executive Summary - Television
• Pay TV Households have increased by 187% since 2007, which represents 23% of
South African households from 10.28% in 2007.
• Whilst the DStv Premium Bouquet showing a decline, exponential growth is in the
DStv Compact Bouquet offering which has grown by 1 690% since 2007 to 1 784
million households in 2012.
9
Television
10
TV Division has put measures in place to hold off the competition
and curb the declining Audience Trends as well as potentially claw
back audiences through:
1. Implementing an Audience Recovery Strategy,
2. Commissioning new titles, and
3. Increased investment into first to market titles and A-grade
movies.
Television
11
The SABC Board has approved an Intellectual Property (IP)
Policy for the Corporations Commissioned Works which aims to:
• Increase the value provided to Production companies through
programme exploitation, and
• Ensure that the Corporation exploits SABC assets to their
fullest.
Broadcast Digital Migration
• The Technology division successfully established the
infrastructure for the SABC‟s first ever High Definition (HD)
Broadcast.
• This represents a significant step towards narrowing the gap
between the Public Broadcaster and the competition.
• The digital studios are ready to commence broadcast, and
• The infrastructure to carry additional channels will be completed
by the end of the financial year.
12
Universal Access
• Access to broadcasting services for all South Africans continues to be a priority for the Corporation, as committed by the SABC in FY11/12 to roll out 300 low power transmitters by the end of FY 13/14.
• The roll out of low power transmitters has been slow, largely due to administrative challenges and funding:
– with a total of 85 sites operational throughout the country, which is 90 sites short of the target.
– The framework to roll out new low power transmitters has been completed and will be submitted through the SABC Governance Structures.
13
SABC Corporate Plan 2011
2 Performance against KPI’s
Introduction
At the beginning of FY12/13 the SABC submitted a Corporate
Plan based on a request to revise the Government Guarantee
financial targets (GGT) submitted for approval by National
Treasury, through the Department of Communications.
The request to revise the GGT was based on the revised
Projected Financial performance of the Corporation and adverse
trading conditions as a result of the Global Economic downturn.
This request was declined, and the SABC was to realign its
targets to the Government Guarantee as issued.
15
Introduction The SABC has thus continued to assess and measure its performance against the Government Guarantee Targets.
This has culminated in the Corporation only achieving 15 out of the 25 key performance indicators set for this financial year.
Notwithstanding the SABC continues to strive to achieve the targets set and has intensified the focus on the Corporations Turnaround initiatives to ensure sustainability into the future.
16
Performance against KPI’s Key
Deliverables
2012/2013
Q3 Target Actual
Performance
Reason for deviation Corrective Measure
Strategic Objective: Grow total SABC revenue in line with audience share
Key Performance Area: Revenue Enhancement
Advertising
Revenue -
R4,3bn
R1,294bn Partially
achieved:
R1,188bn
Underperformance by
Television Advertising.
Peak season audience
share nearly 4% lower
than budget assumption of
60% during Performance
Period.
Television Sales special
packages for remainder of
fiscal. A range of television
revenue retention
strategies.
Sponsorships
Revenue –
R387m
R108m Partially
achieved:
R76m
Underperformance by
both Programme and
Sports sponsorship
Entrenching recently-
approved Sponsorship
Policy
TV Licence
Revenue –
R924m
R267m Achieved:
collected
R282.2m,
R15.5m (5.8%)
better than
budget 17
Performance against KPI’s Key
Deliverables
2012/2013
Q3
Target
Actual
Performance
Reason for deviation Corrective Measure
Strategic Objective: Grow total SABC revenue in line with audience share
Key Performance Area: Revenue Enhancement
Other
Revenue
(including
Government
Grant) target
for the year
- R 592m
R142m Not achieved:
R85m
The uptake in the traditional
CD/DVD markets is not as
high as planned. More and
more consumers are
downloading content from the
internet rather than
purchasing DVDs
There are signed
Sponsorship contracts for
educational programmes but
the revenues can only be
recorded when the
programmes are broadcast.
Many of the programmes will
only be broadcast in FY 13/14
due to schedule changes
Set short term targets for
new clients to make up
the shortfall.
A digital strategy must be
developed to enable
consumers easy access
to content
Reduce the number of
changes to the schedule
18
Performance against KPI’s Key
Deliverables
2012/2013
Q3 Target Actual
Performance
Reason for deviation Corrective Measure
Strategic Objective: Operations that ensure sustainability
Key Performance Area: Cost management
Total
Expenditure –
capped at
R5.63bn
Quarterly
expenditure
of R1,407bn
Not Achieved:
R1,507bn
including
depreciation and
financing costs,
7% worse than
the budget set.
Employee
benefit costs
maintained at
R1.94bn
Employee
costs
capped at
R487m
Not Achieved:
R526m, 8%
worse than
target
The following factors had a
negative impact:
An adjustment for the
Pension fund holiday, which
was R37m higher as it was
not budgeted for.
This has been budgeted for
in the new financial year.
19
Performance against KPI’s Key
Deliverables
2012/2013
Q3 Target Actual
Performance
Reason for deviation Corrective Measure
Strategic Objective: Operations that ensure sustainability
Key Performance Area: Cost management
- Reduce
overtime by
5%
- Leave liability
by 10% from
2012 Financial
Year
• Achieve 2 %
overtime
reduction
• Achieve 5%
leave liability
reduction
Partially
achieved – the
charge was 1%
less than budget
Not achieved
the leave
liability
increased to
R190m at the
end of the third
quarter.
The SABC Board
approved that
employees could be
offered cash in lieu of
leave during the fourth
quarter in order to
reduce this liability
20
Performance against KPI’s Key
Deliverables
2012/2013
Q3 Target Actual
Performance
Reason for deviation Corrective Measure
Strategic Objective: Operations that ensure sustainability
Key Performance Area: Cost management
Sports rights
costs increase
limited to 9%
• No Quarterly
Target set Achieved:
Sport Rights
were recorded
to be R125m
over a budget of
R78m, 60%
under budget for
the third quarter.
The actual cost
was R68m for
the quarter,
12.8% below
the budget for
the quarter.
Budget flows were
flowed more evenly
through the fiscal.
Sport to provide more
accurate schedules at
budget time.
21
Performance against KPI’s Key
Deliverables
2012/2013
Q3 Target Actual Performance Reason for deviation Corrective Measure
Strategic Objective: DTT readiness and digitisation of internal broadcasting value chain
Key Performance Area: Audience Attraction and Retention
Launch of
SABC DTT
Launch DTT
with 3 new
channels, in
addition to
SABC 1,2 and 3
Launch three
channels on
DTT Platform:
•
24hr News
Channel
•
24hr Sport
Channel
•
Children /
Education
Not Achieved: None of
the envisaged channels
were launched during
the third quarter.
The following related
infrastructure/technology
requirements were
completed:
• New studios required to
broadcast the 24HR
News Channel have
been completed.
• The Final Control
Centre for the Sport
Channel;
• The infrastructure
capability to carry the
sixth channel will be
completed by the end
of the financial year.
The funding limitations
have hampered the
SABC‟s capability to
launch the envisaged
channels.
Reassess channel
strategies against
funding capability.
22
Performance against KPI’s Key
Deliverables
2012/2013
Q3 Target Actual Performance Reason for deviation Corrective
Measure
Strategic Objective: DTT readiness and digitisation of internal broadcasting value chain
Key Performance Area: Audience Attraction and Retention
SABC Radio
Stations on
DTT Platform
Launch all 19
Radio stations Achieved for the trial.
Strategic Objective: Maintain TV average audience market share
Maintain an
average TV
audience
market share of
60%
Televisions
Audience
market share of
60%
Not Achieved: The
Division achieved 53%,
which is 7% below
target.
The increasing
competitive
environment and
increasing take up pay
TV has resulted in the
fragmentation of
audiences.
This is further
exacerbated by the
delays in procuring
new content.
The Division has put
in place an audience
recovery strategy,
which is currently
being implemented.
Performance against
this strategy will be
monitored and
reported on a
quarterly basis.
23
Performance against KPI’s
Key
Deliverables
2012/2013
Q3 Target Actual Performance Reason for deviation Corrective
Measure
Strategic Objective: DTT readiness and digitisation of internal broadcasting value chain
Key Performance Area: Audience Attraction and Retention
Broadcasting of
Local TV
content in
minutes across
platforms (
SABC 1,2,3)
PBS – 75% of
minutes across
platforms
(ICASA 55% -
minimum in
Performance
Period)
The ICASA target of
55% was met and
exceeded.
The Internal target
Achieved in Prime
Time: SABC 1 – 76.35,
SABC 2 – 78.92
Not achieved in
Performance Period:
SABC 1 – 70.28% and
SABC 2 – 62.50.
PCS – 35% of
minutes across
platforms
(ICASA 35% -
minimum in
Performance
Period)
Achieved
Prime Time: 37.52 and
Performance Period:
39.02 24
Performance against KPI’s
Key
Deliverables
2012/2013
Q3 Target Actual Performance Reason for deviation Corrective
Measure
Strategic Objective: DTT readiness and digitisation of internal broadcasting value chain
Key Performance Area: Audience Attraction and Retention
Local Content
Investment –
R800m
Local Content
Investment –
R200m
Not achieved: Cash
investment – R162.5m,
R37.5m (18.8%) below
target.
Amortisation –
R156.4m against a
budget of R201.8m,
R45.4m (22%) below
budget.
Due to operational
inefficiencies the RFP
Book was only closed
during the third
quarter, this delayed
the related cash
investment and
amortisation.
The efficiencies in
the contracting
process will be
improved to enable
productions to
commence
timeously to meet
planned and
scheduled
transmission dates.
25
Performance against KPI’s Key
Deliverables
2012/2013
Q3 Target Actual Performance Reason for deviation Corrective
Measure
Strategic Objective: DTT readiness and digitisation of internal broadcasting value chain
Key Performance Area: Audience Attraction and Retention
International
Content
Investment –
R200m
International
Content
Investment –
R50m
Not achieved: Cash
investment – R45.6m,
R4.6m (9.2%) below
target.
Amortisation –R67.3m
against a budget of
R48.7m, R18.6m (38%)
over the allocated
budget
The delay in internal
processes had a direct
impact on the
organisation‟s ability to
utilise (schedule)
/amortise the planned
content and this
impacted the cash
flows are impacted.
The cash flows for
new commitments
are negotiated to
move some over into
FY13/14 and closer
to the broadcast date
of the titles and
thereby reducing the
working capital days
26
Performance against KPI’s Key
Deliverables
2012/2013
Q3 Target Actual Performance Reason for deviation Corrective
Measure
Strategic Objective: DTT readiness and digitisation of internal broadcasting value chain
Key Performance Area: Audience Attraction and Retention
International
Content
Investment –
R200m
(continued)
• Misalignment of
cash flows between
the quarters
• Replacement of
commissioned titles
with licenced titles
due to delays in the
commissioning
process
The cash flows for
new commitments
are negotiated to
move some over into
FY13/14 and closer
to the broadcast date
of the titles and
thereby reducing the
working capital days
27
Performance against KPI’s Key
Deliverables
2012/2013
Q3 Target Actual
Performance
Reason for deviation Corrective
Measure
Strategic Objective: Grow Radio average audience market share
Key Performance Area: Audience Attraction and Retention
Grow and
maintain SABC
PBS audience
market Share
to 56% by
FY14/15
56% Achieved –
PBS Radio is
at 58%
Grow and
maintain
SABC PCS
audience
market Share
to 11% by FY
14/15
11% Not achieved –
PCS is at 9.4% The target set for the year
is not achievable due to
the competitive landscape
– PCS Radio is the
portfolio that is directly
targeted by the
independent commercial
radio stations.
28
Performance against KPI’s Key
Deliverables
2012/2013
Q3
Target
Actual
Performance
Reason for deviation Corrective Measure
Strategic Objective: Grow Radio average audience market share
Key Performance Area: Audience Attraction and Retention
Grow and
maintain
SABC PCS
audience
market Share
to 11% by FY
14/15
11% Not achieved –
PCS is at 9.4% Weekend listening to
commercial radio is
generally on the decline not
only for SABC PCS but
other commercial players
due to the “out-and-about”
nature of the urban
audience segment. Radio,
like other media types, battle
to retain a prominent
position in the active lifestyle
of the typical listener
segment (day time as well
as in the evenings)
The targets should be
revised to a more realistic
level in line with the
competitive environment.
One primary market
commercial radio station has
already launched in KZN
with two more to follow
during F2013/14 and 10
licences given to launch
during the F2014/15. The
pressure will continue as
new players become
operational
29
Performance against KPI’s Key
Deliverables
2012/2013
Q3
Target
Actual
Performance
Reason for deviation Corrective Measure
Strategic Objective: Grow Radio average audience market share
Key Performance Area: Audience Attraction and Retention
Improve SABC
PCS radio
Share of LSM
7-10 market of
18% by FY
14/15
18% Not achieved –
PCS radio
share at 15.6%
The target set for the year is
not achievable due to the
competitive landscape; LSM 7-
10 is the target audience that
is highly contested for not only
by radio but by other media
such as Internet and digital
platforms. This target audience
has a plethora of sources for
information and entertainment
because they can afford them.
PCS Radio share of LSM 7-10
also continues to decline in the
evening due to increased
pressure from a growing TV
viewership base (mostly as a
result of exponential growth in
DSTV uptake in this market)
The targets should be
revised to a more realistic
level. Digital media and the
impact of growing TV
viewership in this segment
will continue to put pressure
on the portfolio‟s
performance going forward.
30
Performance against KPI’s Key
Deliverables
2012/2013
Q3 Target Actual Performance Reason for
deviation
Corrective Measure
Strategic Objective: Grow Radio average audience market share
Key Performance Area: Audience Attraction and Retention
Broadcasting of
Local Radio
content in
minutes across
platforms
PBS – 70%
of minutes
across
platforms
Achieved at 72% excluding
Lotus FM which has an
ICASA special concession
of 20%
PCS – 30%
of minutes
across
platforms
Achieved at 34%
31
Performance against KPI’s Key
Deliverables
2012/2013
Q3 Target Actual
Performance
Reason for deviation Corrective Measure
Strategic Objective: DTT readiness and digitisation of internal broadcasting value chain
Key Performance Area: Broadcasting Technology Infrastructure
Digitization of
studio 1 and 2
Completed
digitisation
of Studio 1
and 2
Not achieved:
The Sport
production
systems have
been updated at
a total cost of
R15m.
The studios upgrades were part
of the Siemen‟s/Atos contract
dispute. Finality to the matter
was reached at the end of the
second quarter.
Whilst dealing with the contract
a fire incident occurred at the
Henley studio block where
studios are located.
The Project scope is
under review, it is
envisaged that the
studios will be
completed by end of
2013.
Technology is
confident on speedy
completion of this
project as it is the
least complex project
in comparison to the
various projects that
the SABC has
embarked on.
32
Performance against KPI’s Key
Deliverables
2012/2013
Q3 Target Actual Performance Reason for deviation Corrective Measure
Strategic Objective: Universal Access
Key Performance Area:
Increase TV
footprint to 100
% by year 2015
Roll out 30
power
transmitters
( Radio and
TV)
Not achieved: 28
were completed as of
December 2012
bringing the total
number of sites to 85.
13 sites are work in
progress.
ICASA has approved
20 more sites for
television and
SENTECH has
committed to
servicing more sites.
SENTECH has faced
challenges accessing sites,
when environmental
concerns exist
Funding for the low power
transmitters has been
declined twice by National
Treasury.
A scope change
document has been
completed to expand
radio but exclude TV
as it benefits from
DTT.
Not approved scope
change to continue
only with FM
expansion is under
review
Increase Radio
footprint to 92
% by year 2015
33
Performance against KPI’s Key
Deliverables
2012/2013
Q3 Target Actual Performance Reason for deviation Corrective Measure
Strategic Objective: Operations that ensure sustainability
Key Performance Area: Governance
Embed risk
management
into day-to-day
activities of the
Corporation.
• Board and
Group Exco
Strategic Risk
Registers
• Fraud Risk
Registers
• Review,
enhance and
Board
approval of
risk
management
policies.
• Fraud risk
Assessment
Not Achieved: Group
Risk Management:
through procurement
Division are in the
process of appointing
a service provider
There is no skill in the
Division.
Funds have been
allocated to the project
enabling project
completion by 31st
March 2013.
34
SABC Corporate Plan 2011
3 Financial Performance
Financial Performance
36
The SABC made a R125m profit during the quarter under review, however
the Corporation was 69% short of meeting the budget target set for the
Quarter.
Revenue
37
The Revenue target of R1.811 billion for the quarter was not met by 9.9%, leaving the
corporation to achieve R1.632 billion.
-
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
1 000.0
TV AdvertisingRevenue
Radio AdvertisingRevenue
SponsorshipRevenue
Trade Exchange TV Licence Fees GovernmentGrants
Other Revenue Content andCommercialExploitation
820.5
367.8
75.8
15.2
282.2
41.8 18.3 10.0
936.0
358.4
108.1
39.3
266.7
40.0 43.4 18.8
Actual
Budget
Revenue
38
Financial Statement Item Cur Quarter
Actual
Cur Quarter
Budget
Cur Quarter
Variance
Cur Quarter
Variance Reason for Deviation
R'000 R'000 R'000 R'000
TV Advertising Revenue - 820.50 - 936.00 - 115.50 - 12.3%
Schedule changes and Audience
Ratings at the end of the second
quarter made a significant
contribution to the below target
performance
Radio Advertising Revenue - 367.80 - 358.40 9.40 2.6%
Sponsorship Revenue - 75.80 - 108.10 - 32.30 - 29.9%
Lower Sport and Programme
sponsorship
Trade Exchange - 15.20 - 39.30 - 24.10 - 61.3%
TV Licence Fees - 282.20 - 266.70 15.50 5.8%
Government Grants - 41.80 - 40.00 1.80 4.5%
Other Revenue - 18.30 - 43.40 - 25.10 - 57.8%
Private funding for educational
programmes was lower than
expected due to delays in
programme completion and
transmission. Funds received
remain as “received in advance on
the Balance sheet until the
programme is broadcast.
Content and Commercial
Exploitation - 10.00 - 18.80 - 8.80 - 46.8%
Total Revenue - 1,631.60 -1,810.70 - 179.10 - 9.9%
Operating Expenditure
39
The Corporation exceeded the operational expenditure target of R1.313 billion for the
quarter by 5.8%. The overspends were in the areas of Sport Production and Rights
and Employee Compensation and Benefits
Operating Expenditure
40
Financial Statement Item
Cur Quarter
Actual
Cur Quarter
Budget Cur Quarter Cur Quarter Reason for Deviation
Actual Budget Variance Variance %
Programme and Film Costs 231.4 255.9 24.5 9.6%
Sports Rights and Production 194.3 124.8 - 69.5 - 55.7% The budget flows were spread
more evenly than the actual spend
during the year.
Broadcast Costs 99.6 116.8 17.2 14.7%
Signal Distribution & Linking Costs 132.2 139.1 6.9 5.0%
Employee Compensation Costs 525.8 487.3 - 38.5 - 7.9%
There was an adjustment for the
cost of the pension fund holiday
during the quarter of R37m. Whilst
the basic salaries line item was
better than budget other line items
were worse than budget.
Productivity Gains - - 120.1 - 120.1 100.0%
Marketing Costs 29.2 57.3 28.1 49.0%
Direct Licence Collection Costs 34.3 43.8 9.5 21.7%
Professional and Consultancy costs 14.5 42.9 28.4 66.2%
Other expenses - Operational, Personnel
& Administrative 127.2 165.1 37.9 23.0%
Operating Expenditure 1,388.50 1,312.90 - 75.60 5.8%
SABC Corporate Plan 2011
4 The Government Guarantee
The Government Guarantee
Based on the latest projections, the SABC will not meet the GG
target surplus of R536m.
• Revenues are projected to be R763m (11,6%) lower, and
• Operating Expenses R369m (7%) higher than target.
• Depreciation is expected to be R193m (41%) lower, and
• Finance costs R177m (78%) lower than target.
42
The Government Guarantee - Revenue
43
Revenue FY 11/12
Actual GG11/12
FY12/13
Projection GG12/13
GG12/13
Variance
GG12/13
Variance GG13/14
R'000 R'000 R'000 R'000 R'000 % R'000
Advertising revenue - 4,035.8 - 3,878.0 - 3,938.6 - 4,267.9 - 329.3 - 7.7% - 4,492.0
Sponsorship Revenue - 361.4 - 704.0 - 372.9 - 738.0 - 365.1 - 49.5% - 775.0
Trade exchanges - 68.7 - 104.0 - 109.7 - 111.0 - 1.3 - 1.2% - 117.0
TV Licence fees - 892.6 - 968.0 - 914.3 - 990.0 - 75.7 - 7.6% - 1,034.0
Government Grants - 129.6 - 191.0 - 217.2 - 196.0 21.2 10.8% - 201.0
Other - 158.2 - 147.0 - 188.8 - 155.0 33.8 21.8% - 164.0
Content & Commercial
Exploitation - 31.3 - 89.0 - 47.2 - 94.0 - 46.8 - 49.8% - 100.0
Total Revenue - 5,677.6 - 6,081.0 - 5,788.7 - 6,551.9 - 763.2 - 1.6% - 6,883.0
The Government Guarantee - Expenses
44
Progress in meeting the Guarantee conditions
45
Guarantee Conditions Comments Compliance
Develop a detailed turnaround
plan outlining milestones,
timelines, executives responsible
for achieving the cost saving &
revenue enhancement measures
The SABC developed and implemented a
Board Approved Integrated Turnaround
Plan.
Achieved
46
Guarantee Conditions Comments Compliance
Implementation plan for
addressing issues raised in the
Auditor General‟s (AG) report
The SABC has implemented the
recommendations of the Auditor General.
Tremendous progress has been made in
this regard. Policies and Systems are
continuously being improved.
Achieved
Cost cutting and revenue
enhancement measures to be
captured in the Shareholder‟s
Compact
• In March 2012, the SABC submitted a Corporate
Plan, with targets based on an application to
revise the Government Guarantee targets.
• The Application to revise the GGT was declined
by National Treasury.
• The SABC had to thus revise the targets to be
aligned to the Government Guarantee.
• The Cost cutting and revenue enhancement
measures have been appropriately captured.
Review
completed in
2012 and
approved by
the Board
Progress in meeting the Guarantee conditions
Headcount Reduction
Headcount in the third quarter has reduced by 17 staff members from the 3 647 at
the end of the second quarter , to stabilise at 3 630 employees.
47
3 185 3 346
3 634 3 755
4 098 3 889
3 690 3 631 3 630
-
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
Mar 2005 Mar 2006 Mar 2007 Mar 2008 Mar 2009 Mar 2010 Mar 2011 Mar 2012 Dec 2012
T
h
o
u
s
a
n
d
• A reduction of 11% has been achieved since March 2009. An
additional 4% will lead to achieving the GG target.
• Divisional structures have been submitted and discussed with
the Group Executive. Currently the structures presented
indicate a headcount reduction in the senior level posts of the
organisation i.e. Group Executive (115) and General Manager
levels of organisation as follows:
48
The Government Guarantee – Headcount Reduction
• During the Second Quarter, the first phase of the Skills Audit,
was completed internally by Human Capital Services. This
phase was designed to identify the level of skill or Qualification
within the organisation.
• Out of the 3 630 employees in the organisation a total of there
was a 67.7% participation rate.
– Senior and Middle management level employees had the highest
participation rate levels, with the former at 70% and the latter at 73%.
– Employees at scale code 404 - 407 had a 62% participation rate level.
49
Skills Audit
• The qualifications were captured on SAP according to the
National Qualifications Framework.
• The Request for Proposal (RFP) for the second phase of the
skills audit is combined with the workforce planning segment.
• This commenced in January once all procurement processes
for appointing a service provider had been finalised.
50
Skills Audit
Looking Forward – Last Quarter
Due to the latest sales projections, we are expecting the Revenue
to improve.
Based on this fact, it is unlikely that we will post a loss at year
end.
In view of cash position in excess of R1bn at the end of
December, the SABC made an advance repayment of the
Nedbank Loan in an amount of R416m.
51
SABC Corporate Plan 2011
5 Progress - Turnaround
Turnaround – Progress Report
• The SABC continues to place major emphasis on the
Turnaround Programme established as part of the Government
Guarantee.
• The SABC reports to and attends meetings with the Monitoring
Task Team (MTT), made up of National Treasury, DoC and
SABC members on a monthly basis.
• At the beginning of FY2012/13 the SABC consolidated its
efforts to focus on the areas that would ensure organisational
sustainability i.e.:
– Revenue Enhancement
– Cost Containment
– Audience Attraction and Retention, and
– Governance and Control
53
Turnaround – Progress Report
54
Project Status January 2012 December 2012
Completed 1 4
On Track 3 12
Delayed 13 10
Behind 4 0
SABC Corporate Plan 2011
6 Clean Audits
At the end of FY 11/12 the SABC received a Qualified Audit
report.
In an effort to focus its SOE‟s to achieve Clean Audits the
DoC has held several meetings focussed on the subject.
SABC commits to achieving a Clean Audit in 2014.
56
Clean Audits
57
Progress on Audit Findings
OPINION NEGATIVE AUDIT
OUTCOMES
ACTION STEPS KEY
MILESTONES
TIMELINES /TARGETS FOR
KEY MILESTONES
RESPONSIBILITY AND CONTACT
DETAILS
PROGRESS TO DATE
Qualified Statements could not be finalised due to the fact that Film and Sports rights were carrying amount of R862 467 000 and related accruals of R598 799 000 included in trade and other payables. The income statement disclosed amortisation and a reversal of impairments of these rights of R1 370 395 000 and R3 281 000 respectively. The company does not have a formal process in place to assess the completeness of these disclosures. .
RESOURCES • Centralise all the Television finance team • Deploy resource to the different areas to deal with short term capacity and skill levels
The Television finance team was consolidated Secure additional resources for the project
March 2012 August 2012
GE TELEVISION [email protected]
Achieved Not achieved The audit plan was drafted for the office of the CFO in July 2012. In October 2012, approval was granted for additional resources to assist with the process. The tender process closed in December 2012. The successful bidders were scored in the week ending 18 January 2013. The candidates will begin their tasks on 10 February 2013
58
OPINION NEGATIVE AUDIT
OUTCOMES
ACTION STEPS KEY MILESTONES
TIMELINES /TARGETS FOR KEY
MILESTONES
RESPONSIBILITY AND CONTACT
DETAILS
PROGRESS TO DATE
Qualified Statements could not be finalised due to the fact that Film and Sports rights were carrying amount of R862 467 000 and related accruals of R598 799 000 included in trade and other payables. The income statement disclose amortisation and a reversal of impairments of these rights of R1 370 395 000 and R3 281 000 respectively. The company does not have a formal process in place to assess the completeness of these disclosures. .
PROCESSES Schedule weekly
meetings to monitor
and drive execution
Introduce weekly
meeting from September 2012
September 2012
GE TELEVISION [email protected]
Achieved and on-going The meetings started on 14
August 2012
Address the number
of “live” events that
are created on the
schedules
Clear all live events
31 January 2013
GE TELEVISION [email protected]
In progress. A control
measure was introduced in
October 2012 for the approval
and reporting of live events.
As at the end of the reporting
period there were a number of
live events remaining on the
system. The live events on the system
relate to Advertiser funded
programmes and have no
impact on Television
amortisation and news. Sport
events are less of a risk as
these are amortised at 100%
of the cost on run 1. Monitoring is taking place on
a daily basis by the TVBMS
team who ensure that each as
run log consists of 24 hours to drive completion
Progress on Audit Findings
59
Progress on Audit Findings
OPINION NEGATIVE AUDIT
OUTCOMES
ACTION STEPS KEY MILESTONES
TIMELINES /TARGETS FOR KEY
MILESTONES
RESPONSIBILITY AND CONTACT
DETAILS
PROGRESS TO DATE
Qualified Statements could not be finalised due to the fact that Film and Sports rights were carrying amount of R862 467 000 and related accruals of R598 799 000 included in trade and other payables. The income statement disclose amortisation and a reversal of impairments of these rights of R1 370 395 000 and R3 281 000 respectively. The company does not have a formal process in place to assess the completeness of these disclosures. .
Complete
reconciliations of
suspense accounts
and post
transactions on SAP
IPM
Transfer manual
entries onto SAP
system; and Complete the
reconciliation on
cost suspense
accounts
(Account 550010
and 550018) and
accumulated
amortisation
suspense
accounts
(Account 540200
and 540208)
28 February 2013 31 March 2013
GE TELEVISION [email protected]
In progress The balance on media asset
costs at 31/03/2012 was R
178m (credit). The balance
has reduced to R 68m (credit)
as at 25/01/2013. In progress The balance on accumulated
amortisation as at 31/03/2012
was R 3.321bn (credit). The
balance has reduced to R
1.200bn (credit) at
25/01/2013. To date the
amount of R 2.121bn has
been processed on SAP ECC.
60
Progress on Audit Findings
OPINION NEGATIVE AUDIT
OUTCOMES
ACTION STEPS KEY MILESTONES
TIMELINES /TARGETS FOR KEY
MILESTONES
RESPONSIBILITY AND CONTACT
DETAILS
PROGRESS TO DATE
Qualified Statements could not be finalised due to the fact that Film and Sports rights were carrying amount of R862 467 000 and related accruals of R598 799 000 included in trade and other payables. The income statement disclose amortisation and a reversal of impairments of these rights of R1 370 395 000 and R3 281 000 respectively. The company does not have a formal process in place to assess the completeness of these disclosures. .
Document processes
and procedures for
the financial
processes for media
assets
To have
procedure
documents in place
31 March 2013
GE TELEVISION [email protected]
The project will commence in
February 2013
Perform a physical
tape count for year-
end purposes
A complete
count of the archives
31 March 2013
GE TELEVISION [email protected]
The project will commence in
March 2013
Address the current
inconsistencies
between the financial
genre captured in
SAP ECC and
TVBMS
Find an interim
solution to have
a view of inconsistencies Implement a
process to
address the inconsistencies
31 March 2013
GE TELEVISION [email protected]
Work in progress: A field has been created in
SAP ECC to reflect the
TVBMS genres in order to
identify the inconsistencies.
The transfer of information will
occur once all of the “live”
events have been cleared .
Standardise the
monthly profitability
reports
Drive a process
whereby
information is
supplied is the
same format and template
31 October 2012
GE TELEVISION [email protected]
Achieved: The monthly profitability
reports were standardised in
August 2012
61
Progress on Audit Findings
OPINION NEGATIVE AUDIT
OUTCOMES
ACTION STEPS KEY MILESTONES
TIMELINES /TARGETS FOR KEY
MILESTONES
RESPONSIBILITY AND CONTACT
DETAILS
PROGRESS TO DATE
Qualified Statements could not be finalised due to the fact that Film and Sports rights were carrying amount of R862 467 000 and related accruals of R598 799 000 included in trade and other payables. The income statement disclose amortisation and a reversal of impairments of these rights of R1 370 395 000 and R3 281 000 respectively. The company does not have a formal process in place to assess the completeness of these disclosures. .
SYSTEMS • Resolve data table
issues, between
data extracted from
the business
warehouse reports
and SAP IPM.
Find a solution
to ensure
information
consistency that
will ensure that
the extracted
data and the
general ledger are in balance.
31 March 2013
GE TELEVISION [email protected]
Preliminary investigations
indicate that the Content stock
report is not able to
specifically deal with a profit
centre but is able to deal with
total TV. A work around is
currently being investigated to
ensure that the correct audit
evidence will be available for
audit.
Introduce a
validation protocol to
validate financial
data entries between
external and internal.
Implement a
system
validation
between
external and
internal combinations
31 March 2013
GE TELEVISION [email protected]
Partially Achieved The system
validation control was
introduced in November 2012.
The system is now able to
perform a validation
combination check between
external and internal accounts
to ensure that these are not
swopped during the
accounting process. An accumulated external/
internal balance of +/- R30.4m
must be cleared.
62
Progress on Audit Findings
OPINION NEGATIVE AUDIT
OUTCOMES
ACTION STEPS KEY MILESTONES
TIMELINES /TARGETS FOR KEY
MILESTONES
RESPONSIBILITY AND CONTACT
DETAILS
PROGRESS TO DATE
Qualified Statements could not be finalised due to the fact that Film and Sports rights were carrying amount of R862 467 000 and related accruals of R598 799 000 included in trade and other payables. The income statement disclose amortisation and a reversal of impairments of these rights of R1 370 395 000 and R3 281 000 respectively. The company does not have a formal process in place to assess the completeness of these disclosures. .
Run amortisation
through the system
(SAP IPM)
Process monthly
amortization
through SAP IPM
31 March 2013
GE TELEVISION [email protected]
The amortisation between
April 2012 and December
2012 was processed through
the system.
Implement the
interface between
SAP ECC and
TVBMS
Update TVBMS
fields with
contract
reference
number (SAP
MAM ID) and
project number
(SAP Project no.)
31 March 2013
GE TELEVISION [email protected]
Work in progress: The play history fields need to
be increased to include fields
that reflect the contract reference and project ID data. The contract and project ID
fields will allow the team to
match the data from SAP
ECC and TVBMS with each
other. This is a manual process System analyses showed that
not all of the contract
reference fields were
populated consistently. This
process is now 85% complete
and the data must now be validated.
63
Progress on Audit Findings
OPINION NEGATIVE AUDIT
OUTCOMES
ACTION STEPS KEY MILESTONES
TIMELINES /TARGETS FOR KEY
MILESTONES
RESPONSIBILITY AND CONTACT
DETAILS
PROGRESS TO DATE
Qualified No transparent
system of risk
management.
Non-compliance
with Sec
51(1)(a)(i) of the PFMA.
Embedding risk
management in the
operations is in
progress. Risk
assessments for the
individual Divisions
are done on a monthly
basis to track
progress. All
Divisional risks are
captured on the
CURA Risk System
and monthly tracking
and reporting are
performed.
However Specific
audit findings
stated the
following; No risk
assessment was
conducted for the
news division. No
fraud risk
assessment was
conducted for the year.
The News Risk
Assessment was
conducted during
October and
November 2012. Fraud Risk
Assessment
service provider
has been sourced
to resume on 1
March 2013, due to
the lack of skill in
the division.
GE: RISKAND GOVERNANCE motswenism@s
abc.co.za
News Risk Assessment
Complete. All Divisional and Provincial
Risk Assessments Review will
be concluded by 31 March
2013. Fraud Risk Assessment in
progress
64
Progress on Audit Findings
OPINION NEGATIVE AUDIT
OUTCOMES
ACTION STEPS KEY MILESTONES
TIMELINES /TARGETS FOR KEY
MILESTONES
RESPONSIBILITY AND CONTACT
DETAILS
PROGRESS TO DATE
Qualified Formal policies and
procedures of how
company's process of
performance,
planning, monitoring,
and measurement
review and reporting
are not yet reported to
the accounting
authority because they
were drafted late.
Non- compliance with
Sec 51(1)(a)(i) of the PFMA.
The SABC's
Corporate Plan and
Shareholder
compact for FY12/13
have been completed
and will be presented
to the SABC Board
for approval.
Furthermore, a
Performance
Management Policy
has been drafted and
is currently being
consulted with
organised Labour.
Planning is to present
this to the next Board
meeting for approval.
Approval
by the
SABC
Board of Directors;
Approval of
the
Corporate
plan by the
Hon.
Minister of
Finance
and
Communications
SABC: GCEO [email protected] [email protected]
The SABC documented a
Corporate Plan in Feb. 2012
for approval to the
Honourable. Ministers of
Communications and Finance.
The targets included in this
plan were based on an
application made by the
Corporation to revise the
Government Guarantee
Targets. The revisions to the
GGT requested were declined
by National Treasury and the
SABC had to re-draft the
Corporate Plan to ensure
alignment to the GG targets.
The revised document has
been submitted to the Board
and Minister of
Communication for approval.
65
Progress on Audit Findings
OPINION NEGATIVE AUDIT
OUTCOMES
ACTION STEPS KEY
MILESTONES
TIMELINES /TARGETS FOR KEY
MILESTONES
RESPONSIBILITY AND CONTACT
DETAILS
PROGRESS TO DATE
Qualified Out of 66 planned
performance
indicators, only 22
were achieved. This
indicated 70% of
planned performance not achieved.
A number of the key
performance indicators
still outstanding from
FY201/12 has been
reviewed and are
continuing in the
SABC's Corporate
Plan for the new fiscal.
Progress and
achievement of same
are being tracked on a
quarterly basis through
quarterly feedback
reports to the Board,
Ministerial Task Team and Shareholder.
Quarterly SABC: GCEO [email protected] [email protected]
In February 2012 the SABC
submitted a request to
National treasury to revise
especially the Financial
targets that were set based on
the Government Guarantee
obtained in 2009. The
revisions were declined as a
result the targets set are
based on the terms and
conditions stipulated in 2009.
On reviewing the year to date
performance the SABC has
achieved some of the performance indicators.
66
Progress on Audit Findings
OPINION NEGATIVE AUDIT
OUTCOMES
ACTION STEPS KEY MILESTONES
TIMELINES /TARGETS FOR
KEY MILESTONES
RESPONSIBILITY AND CONTACT
DETAILS
PROGRESS TO DATE
Due to the poor IT
governance structure,
the line managers are
allowed to operate at
their own discretion
which compromises
the ability to use the
Information
Technology systems
to support accurate and reliable reporting.
Projects are
underway to replace
the Radio Ad Sales
system and enhance
Television systems
to ensure the
integrity of information.
A Request for
Information (RFI)
for the replacement
of the Radio Ad
Sales system was
prepared in
consultation with
Technology
Division is ready to
be issued through Procurement.
Landmark system upgrade.
Further Landmark
enhancements to
address Audit
findings (2011-
2012) have been specified.
Price negotiations
for Landmark
enhancements are underway
February 2013. October 2012. November
2012. February 2013.
GE: TECHNOLOGY [email protected]
Work in progress:
Complete: The
Landmark system
has been upgraded
from Version 10 to Version 15.
SABC Corporate Plan
2013-2016
Presentation to the Parliamentary
Communications Committee
23rd April 2013
68
Purpose of the presentation
To brief the PCC on the Corporate Plan for the SABC for the MTEF
Period, focusing on:
• The current environment
- Regulatory environment
- Media environment
- Government Guarantee
• SABC Strategic Goals
• SABC Key Performance Areas and Indicators
Public Broadcasting
69
In its simplest definition a “public
broadcasting service” is a broadcaster
that serves the public as a whole and is
accountable to the public as a whole.”
Ozias Tungwarara Director, AfriMAP
VISION
Broadcasting for Total Citizen Empowerment
MISSION
To be a people centred, content driven, and
technology enabled,
Strategically focused and financially
sustainable public service
VALUES
Conversations and partnerships
Restoration of human dignity
70
SABC Corporate Plan 2012-2015 71
AGENDA
2 Critical Issues
3 The Competitive Environment
4 Alignment to Shareholder Priorities
5 KPI’s: MTEF 14 - 16
6 The FY13/14 BUDGET
2
1 The Legislative Environment
Questions & Answers
SABC Corporate Plan 2011
1 The Legislative Environment
Founding Legislation
The SABC, as the national broadcaster, is mandated to inform, educate and
entertain South Africans
The Constitution: • Equality, non-racism, non-sexism
• Freedom of Speech
• Freedom of Religion
• Right to Dignity
The Broadcast Act Includes the Broadcast
Charter
Defines PSB, PCB, CB &
Comm Broadcasting
The ECA Defines ICT
Links BA and ICASAA
ICASA Act Empowers Icasa, who:
Issues licences
Regulates environment
73
SABC is also
guided by: • PFMA
• The Companies Act
• King I,II & III
• Treasury Regulations
• SABC DAF
Broadcast environment – Regulatory
74
Current Licencing Framework
The Current Licences were issued in 2005 & were effective from 2006, setting quotas
and obligations intended to ensure that the SABC met the mandate outlined in the
Broadcast Act
SABC met or exceeded licence quotas on radio & television for FY 12-13
The only exception is broadcasting in marginalised languages – where the local
production industry does not have capacity to meet SABC’s needs.
However, the current primetime TV requirements negatively impact on the SABC’s
ability to deliver against the multiple criteria of revenue, audiences and mandate
Regulatory review
A range of regulations have been prejudicial to the SABC and as regulations are
reviewed ahead of the switch to terrestrial DTT, the following require attention:
• Review of ‘must carry’ regulations
• Review of Sports of National Importance
• Review of Local Content on Television, Commissioning and Music regulations
• Impact of the licencing of additional radio stations
• ICT policy review
SABC Corporate Plan 2011
2 Critical Issues
Broadcast environment – the media
76
• Migration from analogue to terrestrial – everyone will be able to access
multi-channel transmissions
• New technologies result in new ways of consuming media and new
players . Fragmentation of audiences and revenue
• Convergence sees traditional definitions of „broadcasting‟ becoming
obsolete
• Broadcasting no longer a passive, schedule led experience for audiences,
but active engagement where they determine where, when and how they
consume content
This undermines advertising-based funding models – which has serious
implications for the SABC, with its commercially-driven funding model.
The SABC‟s strategic focus, however, will remain on delivering public value and the
corporation has developed its unique value proposition in direct response to the
pressures it now faces
Broadcast environment – Review of Regulations for DTT
• ICASA has issued the final DTT regulations and this has created an
opportunity to review existing regulations developed for an analogue
broadcasting environment.
• The regulations for an analogue broadcasting environment have had a
significant and unsustainable impact on the SABC‟s Financial
Performance as the Corporation is heavily reliant on Commerical funding
to the tune of 82% of the SABC‟s total Revenue Streams.
• The current Prime Time TV requirements negatively impact on the
SABC‟s ability to deliver against the multiple criteria of revenue,
audiences and mandate
77
Broadcast environment – Review of Regulations for DTT
The following areas present as an opportunity to review;
The “Must Carry” Regulations
• The current regulations mandate the SABC to make available at no
additional cost (free of charge) all SABC television channels to
Subscription television broadcasters.
• This requirement does not take into account the SABC‟s investment in
content acquired through a competitive process and the public purse.
• This regulation is in conflict with the ECA of 2005 which allows the
parties to negotiate commercial terms in the must carry agreements.
78
Broadcast environment – Review of Regulations for DTT
Regulations on Sports of National Interest
• Whilst acknowledging that the Free To Air broadcasters need to acquire
rights first before they are obliged to broadcast listed sporting events of
national importance. These regulations provide a list of sporting games
or tournaments that are to be broadcast by the Free To Air broadcasters.
• This requirement gets more complex when considering the public service
obligations that we have to the general public.
• Yet the regulations do not put sufficient mechanisms to oblige
competitive subscription broadcasters to avail the rights to the SABC on
reasonable terms.
– This is despite the fact that the SABC on the one hand is obliged through “Must Carry”
regulations to avail its channels that may have primary sports rights to subscription
broadcasters, free of charge.
• So far the broadcast of listed events such as the PSL and Bafana Bafana
games have yielded negative financial returns relative to the high cost of
the rights investment made
79
Broadcast environment – Review of Regulations for DTT
Review of Local TV Content, Commissioning and Music Regulations
• ICASA intends to review the regulations in respect of local content,
commissioning and music. This will provide an opportunity for the SABC
to review its ability and performance on the commissioning of local
content and utilization of music across platforms. The impact of needle
time, intellectual property rights and the Copyright Act will have to be
seriously considered by the SABC as they have significant financial
implications. The review of the regulations will commence in year one
and will be finalised by ICASA over the medium term in 2015.
• Other regulations that will be reviewed are the Advertising and
Sponsorship Regulations and Development of a Licensing Framework for
digital radio.
80
Broadcast environment – Review of Regulations for DTT
Introduction of more Competition for radio and television
During the FY2013 – FY2016 period, ICASA intends to license additional
broadcasting players. These are:
• Licensing of additional six Medium Wave sound broadcasting services in the primary
markets in 2013;
• Licensing of additional four FM sound broadcasting services in the secondary markets in
2013;
• Licensing of additional Free Air Television (FTA) broadcasting services in FY2015 –
FY2016;
• Licensing of additional terrestrial subscription television broadcasting services in FY2015
– FY2016; and
• New DTT channels by existing incumbents.
The SABC strategy will take cognizance of the impact these new players will
have on its revenue and audience share. Parallel to that will be a need to secure
increased public funding as the challenge to compete with commercial
broadcasters and other media platforms will make it difficult for the SABC to
effectively deliver on its public service mandate.
81
Broadcast environment – ICT Policy Review
• The Minister of Communications has launched the process to review and
develop an ICT Policy scheduled for 2013 – 2015.
• This SABC has subsequently appointed two executives to represent the
SABC on the panel.
• This process will provide the Corporation with an opportunity to review
critical policies affecting its existence in the market and help define the its
role against our mandate.
• This process would have to deal with critical questions facing the
Corporation to name but a few:
– The funding model, and
– Coexistence with other players.
82
Broadcast environment – SABC Funding Model
• The Corporation is funded 80-82% through commercial Revenues, 15-
16% Commercial Revenues, and approximately 3% Government Funding
– This funding model is juxtaposed by mandate requirements that require the
Corporation to fulfill their Public Service Mandate to deliver: • Television and Radio : Local content and language quotas for PBS and PCS Stations
• Listed Sports of National Interest
The related amortisation costs of the abovementioned factors costs approximately 46% of the
organisational operational expenses.
– The SABC level of funding received from the Public through Licence Fee
collections currently projected at R929.76 m for FY12/13 falls far short of the
potential R2bn (at the current tariff that could be raised. • The last TV licence fee increase the SABC was awarded was in 2009 after four years of no
increases
• Further the SABC‟s ability to collect from the affluent market that own DSTV devices and pay
subscriptions has been severely hampered as current legislation does not compel DSTV to collect
on the SABC‟s behalf.
• The current Must Carry regulations preclude the SABC from collecting payment from satellite
broadcasters for the presence of SABC1, 2 and 3 on their bouquets.
83
Broadcast environment – SABC Funding Model
• SABC has made a concerted to drive are review of the Must Carry Regulations to
be replaced by those that enable the SABC to turn its financial outlook.
• The following are some considerations that must be brought into the solution
seeking process:
– TV Licence fees
• S27 of the Broadcasting Act of 1999 as amended states that television licence revenue
shall be used solely for funding the SABC‟s public service mandate.
• Although the revenue collection has improved and the number of accounts
strengthened in 2003-2004, the growth comes at an increased collection cost for PBS
funds.
• Regular increases are crucial to raise PBS funding to adequate levels, failure to
implement increases has resulted in TV licence revenues decline in real terms
84
Broadcast environment – SABC Funding Model
– TV Licence fees
• Had the SABC been allowed annual tariff adjustments since 1998, the current R250.00
fee (effective as from 1 August 2009) would now have been R620.00 – R370.00 (148%)
more than at present. The irrecoverable loss, as a result of not implementing these
increases, to the SABC over said period is estimated at more than R1 billion.
• The GG Targets were formulated on the assumption of TV Licence Tariff increases,
which has not taken place.
The SABC has only received six (6) increases in the last 22 years, the SABC recommends
that the Minister of Communications consider granting a CPI related increase for every
second year 2013 -2017
85
Broadcast environment – SABC Funding Model
• Approval of this tariff increase must be obtained in orders to:
– give effect to the Corporate turnaround strategy by increasing the SABC‟s public
funding contribution;
– assist the Corporation in delivering on its Government Guarantee and in meeting its
undertaking to return to profitability;
– enhance funding for the national broadcaster‟s mounting obligations in terms of its
Public Service Broadcasting (PSB) mandate; and
– assist the SABC financially in achieving its ultimate aim of providing all South Africans
with universal access to its broadcasting services.
– The proposed TV license tariff increases over a six (6) year period 2013 to 2017 are
enclosed as Schedule A below.
86
87
The Government Guarantee, as provided by National Treasury in 2010,
continues to play a dominant role in the SABC‟s financial strategy. It is
worthwhile noting that while afforded the ability to raise the R1.473 billion in
bank loans, the SABC utilized only R1 billion through its Nedbank loan.
In addition to the Company‟s trajectory of prudent financial management, the
SABC has recognised the losses incurred through the interest rate payments
attached to the loan. To mitigate this, R777.8 million of the capital portion and
interest of R240 million have to-date been paid back to Nedbank. The
remainder of the debt now stands at R222 million plus interest charges of R8
million at the end of January 2013. Chairman’s foreword to the Corporate Plan
Broadcast environment – Gov. Guarantee
Broadcast environment – Gov. Guarantee
88
Actual & projected performance against key targets
89
Human Capital Costs
SABC was required to cap its salary costs at R1.5bn by year-end. As a result of
addressing salary anomalies and annual increases, coupled with the uniquely skilled
human capital intense nature of the corporation, these costs are projected at R1.99bn
Other Costs
There was a significant improvement in the management of other costs. The cost of
direct licence fee collection dropped by 34%.
Programme and film costs were reduced by 48.4%, while there was a 38.8% saving
against GG marketing target of R256m. However, these latter savings have the
potential to negatively impact on future revenue.
Broadcast environment – the Gov. Guarantee
90
Filling of vacant positions
In late March 2013 the President appointed an Interim Board to serve for a
period of six months ending September 2013. The following Board members
were appointed:
The following Directors were appointed in a Non-Executive Capacity:
• Ms Ellen Tshabalala (Chairperson);
• Ms Noluthando Gosa (Deputy Chairperson)
• Mr Ronny Lubisi;
• Mr Vusumuzi Mavuso
• Dr Iraj Abedian;
The resolution of the cases against three suspended Group Executives has
been prioritised. Additionally the Corporation is expediting the process to fill
the positions of Group Executives of Legal, Risk, Technology, and the Head
of Strategy
Broadcast environment – the Gov. Guarantee
91
Revenue Revenues were meant to increase significantly year on year in order to reverse the
severe deficit that the SABC had suffered.
The significant challenges that were brought about by increased competition and
wider choice for the advertising industry, the reputation damage the company
suffered as a result of reported cases of corruption and the significant economic
down turn resulted in the SABC not being able to meet some of the targets
Broadcast environment – the Gov. Guarantee
Broadcast environment – Gov. Guarantee
92
24-hour News Channel
As a result of funding shortfalls, the 24-hour News Channel has not been
launched. Despite receiving conditional approval from the Minister of
Communications for the channel launch, the Minister of Finance rejected the
funding application.
The 24-hour news channel would have carried events of national
importance, the cost of changing schedules on the existing channels in order
to accommodate these events has resulted in losses of R17million.
Sports of National Interest
The costs of broadcasting the listed sports of national interest remains
beyond the reach of the SABC. In addition, schedule displacement costs of
moving scheduled content to make way for these listed sports amounted to
R82m for the year to end-January 2013.
A dedicated sport channel would mitigate these losses. The funding request
for this channel was also rejected by treasury
SABC Corporate Plan 2011
3 The Competitive Environment
SABC Corporate Plan 2011
SABC’s Audience Share
Fiscal Share Trends for All Adult TV Ratings
Source: Saarf TAMS (Television Audience Measurement Survey)
The SABC committed to deliver 60% share of Adult (15+) Audience Ratings in the performance period measure
(05h00-23h00) for an average day Monday to Sunday. In order to deliver on this target, the organisation set itself a
number of other targets including a prime time target of 65% since free to air generally dominates against pay TV
during prime time. SABC1 has recently come under severe pressure during both the performance period and prime
time – leading to a drastic decline in network share.
Fiscal Share Trends for LSM 7-10 Adult TV Ratings
Source: Saarf TAMS (Television Audience Measurement Survey)
With pay television dominating this market, no single SABC channel is able to deliver in excess of a combined Dstv
share. The last time was in FY08/09 when prime time share for both SABC1 and SABC2 exceeded that of Dstv. It is
nevertheless the responsibility of commercial channel SABC3 to deliver to share targets in this market.
Annual Share Trends for All Adult Radio Quarter Hours
Source: Saarf RAMS (Radio Audience Measurement Survey)
The SABC’s 3 commercial or
PCS stations (5fm, Good
Hope FM and Metro FM)
have managed to deliver
enough listening to ensure
SABC radio targets are met
in 4 of the 5 years shown
Annual Share Trends for LSM 7-10 Radio Quarter Hours
Source: Saarf RAMS (Radio Audience Measurement Survey)
While commercial obligations rest
with just 3 of the SABC’s radio
stations, the PBS portfolio delivers
over half of the share of the
commercial audience (LSM 7-10)
share that the SABC enjoys. The
SABC’s share of this market has
grown to over half of national
listening by LSM 7-10.
SABC Corporate Plan 2011
South African Households – Census 2011
Both AMPS and Census 2011 confirm
data for 14.5 m households. Census
shows that a television set is the third
most important household item after
a cell phone and stove.
Black households make up 56% of
the 3.7m satellite service universe in
Census 2011 – clearly beyond the
tipping point for adoption.
Source: Census 2011
Source: AMPS 2012
• Dstv‟s penetration into LSM 4-6 is small at just over a tenth. At 51% of 34million adults however, this LSM
segment comprises the bulk of the national adult population
• The platform has reached near saturation in LSM10, and reaches over two thirds of LSM 9.
• But the platform (at 39%) has yet to reach beyond half of the country‟s most mobile living standard segment –
LSM 7
5.8 7.5 10.0 12.3 18.5 24.9 29.3 35.1 38.6 22.3 34.5
36.5 42.0 47.7 52.4
36.6 48.7
56.7 58.3
62.4 67.1
66.4
74.4 79.3
83.4 85.1
86.8
2007 (9.6%) 2008 (13.9%) 2009 (18.0%) 2010 (20.8%) 2011A (24.0%) 2011B (26.6%)
Dstv Penetration by LSM: 2007-2011
LSM 10
LSM 9
LSM 8
LSM 7
LSM 4-6
LSM 4-6 6%
LSM 7-8 23%
LSM 9-10 71%
Dstv 2007 (9.6%)
LSM 4-6 24%
LSM 7-8 33%
LSM 9-10 43%
Dstv 2011B (26.6%) LSM 4-6
33%
LSM 7-8 38%
LSM 9-10 29%
Top TV 2011B (1.6%)
The Rise & Rise of Pay TV (All Adults)
• Pay television is no longer the luxury spend of an elite – Top TV has demonstrated that better than anyone
with a third of its subscription base coming from LSM 4-6. Dstv however, finds it hard to shake off that old
image and continues to generate almost 80% of its subscriptions from those in the LSM 7plus segments.
Source: Saarf AMPS Jan-Dec 2011
The Rise & Rise of Pay TV (All Adults)
• Like most of the developed world, pay television is fast
becoming an ordinary rather than a luxury expense for South
Africans. But it is still accessed mainly by upper LSM
households.
– Those in LSM 9-10 account for just 15% of the population, but make up
42% of the pay television universe.
– On the contrary, LSM 4-6 accounts for 52% of all South African
households, but just under a quarter of them (24%) have access to pay
television.
• Overall, 28% of South Africa‟s 14.1million households
currently access one or other pay television service (Saarf
AMPS, June 2012).
• This has grown from 17% in December 2008.
46% of the 5.1m households that have some access to the internet do so via a mobile phone
and this rises to 56% among Black African households
White and Indian South Africans access the internet predominantly
from their homes with only 42% of latter households having NO access
at all and 30% of the former.
Gauteng and Western Cape have the highest household access to the
internet at 46 and 44% respectively with Limpopo and Eastern Cape
with the lowest at 24 percent.
Source: Census 2011
Total Unique Visitors Mar 2012-Feb 2013: 2,692,998
Unique Visitors to SABC Portal: Monthly
Source: DMMA Site Catalyst
Top 10 Sections visited on the SABC portal
Top Ten pages account for 88.7% of traffic (12.4m page views) through www.sabc.co.za over year 1 March 2012 to 28 February2013
Source: DMMA Site Catalyst
Dstv has positioned itself well for the
maturity of the supply side of the
Netflix/Hulu business model. While we wait
for better broadband – a small demand is
nurtured and perfect data collected for
investment decisions in the future
“BoxOffice lets you download the latest blockbuster releases with your PVR decoder and online. Enjoy movies at home”
“Watch 350+ hours of your favourite TV shows, sport and movies online whenever you want every month! This video on demand service is free & exclusive to premium subscribers”
SA’s First-to-Market Advantage …
Source: AMPS Jun 2012 and www.dstv.co.za
Broadband Speed (and Costs) are the Supply side Barrier to Convergence of Technologies in SA – Demand is undeniable
http://www.netindex.com/download/allcountries/
Graph Period: Jul 10, 2010 - Jan 8, 2013
12.75Mbps is Global Average Household Index (180 countries)
A US Example
Source: www.hulu.com and www.netindex.com
SABC Corporate Plan 2011
The WAR for Television Audiences
NUMBER OF TV CHANNELS BY BROADCASTER
Source: Dstv website (www.dstv.com) Top TV (Mail & Guardian Article 12 Oct 2012)
0
20
40
60
80
100
120
DStv (Multichoice) Top TV SABC Network e.tv
115
59
3 2
The Fragmentation of TV Audiences
• DSTV‟s growth is based on the collective strength of its myriad channels,
most of which barely deliver 0.1 AR
• Apart from offering viewers so many channels, DSTV has deep pockets, delivering
around R12 billion in subscription fees alone per annum, which allow them to acquire
whole slates of first to market international content and to market this content
aggressively. They have also begun investing in (good) locally commissioned content in
their battle to keep their subscribers – e.g.. Isibaya
Source: SABC Report [to Icasa] on TV Compliance with Licence Conditions Oct-Dec 2012
• The SABC has licence conditions that result in the bulk of their schedules consisting of
local content. For instance, SABC2‟s local content quota may be 55%, but additional
quotas on the delivery of languages other than English; marginalised languages;
current affairs, children‟s programming, education and drama… for both prime time and
performance period mean that the channel has to populate in excess of 78% of its
prime time schedule with more costly local content. For SABC1 this results in the
channel dedicating 76% of its schedule to local content.
The Rise & Rise of Pay TV (All Adults)
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
TOTAL TV 10.8 11.5 13.5 15.5 15.4 15.8 16.5 17.3 18.2 18.4 18.9 19.2 18.5 18.9 17.6
SABC NETWORK 9 9 10.5 10.9 9.9 9.8 10.4 11.3 11.6 12.1 11.9 12.2 11 11 9.4
ETV 0.3 0.9 1.5 2.5 3.2 3.8 3.5 3.3 3.8 3.9 4.1 4.2 3.8 3.7 3.4
MNET 1.5 1.4 1.2 0.8 0.9 0.8 0.9 0.8 0.8 0.5 0.4 0.3 0.3 0.2 0.2
TOP TV 0 0 0 0 0 0 0 0 0 0 0 0 0 0.1 0.1
DSTV 0 0.2 0.3 1.3 1.4 1.4 1.7 1.9 2 1.9 2.5 2.5 3.4 3.9 4.5
0
5
10
15
20
25
83% Share
71% 63%
53%
65%
Source: Saarf TAMS
MNet’s 2 hour Open
window closes
AND Rural Panel Intro
Dstv wins PSL
and launch of Compact
Etv breaks even ff Seoul SWC
SWC 2010 stalls SABC
declines
ANNUAL NATIONAL ADULT (16+) RATINGS 05H00-23H00 MON-SUN
SA 1998-2012
Annual % Shares of Viewing (Individuals) 1981-2011 UK Year Channel
BBC1 BBC2 ITV 1 C4 + S4C C4 +1 Five Others (inc. GMTV)
1981 39 12 49 - - - - 1982 38 12 50 - - - - 1983 37 11 48 4 - - - 1984 36 11 48 6 - - - 1985 36 11 46 7 - - - 1986 37 11 44 8 - - - 1987 38 12 42 8 - - - 1988 38 11 42 9 - - - 1989 39 11 42 9 - - - 1990 37 10 44 9 - - - 1991 34 10 42 10 - - 4 1992 34 10 41 10 - - 5 1993 33 10 40 11 - - 6 1994 32 11 39 11 - - 7 1995 32 11 37 11 - - 9 1996 33.5 11.5 35.1 10.7 - - 10.1 1997 30.8 11.6 32.9 10.6 - 2.3 11.8 1998 29.5 11.3 31.7 10.3 - 4.3 12.9 1999 28.4 10.8 31.2 10.3 - 5.4 14 2000 27.2 10.8 29.3 10.5 - 5.7 16.6 2001 26.9 11.1 26.7 10 - 5.8 19.6 2002 26.2 11.4 24.1 10 - 6.3 22.1 2003 25.6 11 23.7 9.6 - 6.5 23.6 2004 24.7 10 22.8 9.7 - 6.6 26.2 2005 23.3 9.4 21.5 9.7 - 6.4 29.6 2006 22.8 8.8 19.6 9.8 - 5.7 33.3 2007 22 8.5 19.2 8.6 0.2 5.1 36.5 2008 21.8 7.8 18.4 7.5 0.7 5 38.8 2009 20.9 7.5 17.8 6.8 0.7 4.9 41.4
Year Channel
BBC1 SD+HD BBC2 ITV 1 SD+HD C4 C4 +1 Five Others (inc. Bfast)
2010 20.8 6.9 17 6.2 0.8 4.5 43.7 2011 20.2 6.1 12.9 5.3 n/a 4.7 50.8
The DTT and Multichannel experience of the public broadcasters in the UK
Source: www.barb.co.uk
SABC1 and 3 doubled the proportion of channel ratings that they
attract via the Dstv platform over 4 years. But the number of
channels available on pay platforms is fragmenting audiences
Source: Saarf TAMS
0
10
20
30
SAB
C 1
e.tv
SAB
C 2
SAB
C 3
Afr
ica
Mag
ic M
ovi
es
kykN
ET
M-N
et A
ctio
n
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eto
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M-N
et
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TV
Sup
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ort
2
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iver
sal
Un
iver
sal C
han
nel
…
Sup
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ort
1
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zu
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ney
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Dis
ney
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ic
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ann
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ort
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Sup
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ort
4
eNC
A (
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ews…
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et S
tars
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e
BB
C L
ifes
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nte
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nm
ent
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ney
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el
24
.4
18
.1
16
.6
12
.0
1.9
1.5
1.3
1.0
0.9
0.7
0.7
0.7
0.7
0.7
0.7
0.7
0.7
0.7
0.6
0.6
0.5
0.5
0.5
0.5
0.5
0.4
0.4
0.4
0.4
0.4
TOP 30 TELEVISION CHANNEL SHARE (Nationally) PEFORMANCE PERIOD (05:00-23:00 Mon-Sun)
Average 1-18 October 2012 Adults (15+)
Source: Saarf TAMS
110 Dstv Channels, most of which do not deliver even 0.1 AR
Viewed individually, DSTV’s multitude of channels do not come anywhere close to the FTA channels ARs, most of which deliver less than 0.5 AR
110 Dstv Channels, most of which do not deliver even 0.1 AR
0
10
20
30
SAB
C 2
SAB
C 3
e.tv
SAB
C 1
kykN
ET
Afr
ica
Mag
ic…
M-N
et A
ctio
n
M-N
et
Sup
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ort
1
Sup
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ort
2
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iver
sal…
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iver
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D
Vu
zu
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r
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ann
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Trac
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Sup
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ort
3
eNC
A (
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ews…
M-N
et S
tars
BB
C L
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n P
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ort
4
M-N
et S
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s
M-N
et M
ovi
es…
14
.7
12
.3
11
.7
11
.4
3.2
2.5
2.2
2.0
1.5
1.4
1.3
1.2
1.2
1.1
1.1
1.0
1.0
1.0
0.9
0.9
0.8
0.8
0.8
0.8
0.8
0.8
0.8
0.7
0.7
0.7
TOP 30 TELEVISION CHANNEL SHARE (Nationally) PEFORMANCE PERIOD (05:00-23:00 Mon-Sun)
Average 1-18 October 2012 LSM 7-10 Adults (15+)
The Battle for Share of Audience • TAMS in August 2012 shows that the entire SABC TV portfolio met its all day share (and Government
Guarantee) target of 60% in only 3 instances across 7 days of television:
– on weekday mornings when Isidingo and Generations are repeated on SABC1
between 19h30 and 21h00 when SABC1‟s key properties – News, Generations and local dramas - are on air.
• All of these instances are driven by one channel – SABC1 and this has been the trend for some time before
August 2012.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
05
h0
0
06
h0
0
07
h0
0
08
h0
0
09
h0
0
10
h0
0
11
h0
0
12
h0
0
13
h0
0
14
h0
0
15
h0
0
16
h0
0
17
h0
0
18
h0
0
19
h0
0
2h
00
0
21
h0
0
22
h0
0
Sa
t
05
h3
0
06
h3
0
07
h3
0
08
h3
0
09
h3
0
10
h3
0
11
h3
0
12
h3
0
13
h3
0
14
h3
0
15
h3
0
16
h3
0
17
h3
0
18
h3
0
19
h3
0
20
h3
0
21
h3
0
22
h3
0
05
h0
0
06
h0
0
07
h0
0
08
h0
0
09
h0
0
10
h0
0
11
h0
0
12
h0
0
13
h0
0
14
h0
0
15
h0
0
16
h0
0
17
h0
0
18
h0
0
19
h0
0
2h
00
0
21
h0
0
22
h0
0
SABC1 SABC2 SABC3 e.tv Mnet TopTV DStv
Source: Saarf TAMS August 2012
The Battle for Share of Audience
• The prime time share target of 65% is met in only the Generations and local SABC1 drama slots on weekdays (20h00-21h00); and it is met again in the Saturday 18h30-20h00 half-hour slots.
• This is the net sum of the public broadcaster’s three channel schedules towards prime time share of ratings target of 65%.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
05h
00
06h
00
07h
00
08h
00
09h
00
10h
00
11h
00
12h
00
13h
00
14h
00
15h
00
16h
00
17h
00
18h
00
19h
00
2h
000
21h
00
22h
00
Sa
t
05h
30
06h
30
07h
30
08h
30
09h
30
10h
30
11h
30
12h
30
13h
30
14h
30
15h
30
16h
30
17h
30
18h
30
19h
30
20h
30
21h
30
22h
30
05h
00
06h
00
07h
00
08h
00
09h
00
10h
00
11h
00
12h
00
13h
00
14h
00
15h
00
16h
00
17h
00
18h
00
19h
00
2h
000
21h
00
22h
00
SABC1 SABC2 SABC3 e.tv Mnet TopTV DStv
65
Source: Saarf TAMS August 2012
SABC Corporate Plan 2011
4 Alignment to DOC Priorities
118
Alignment to DOC Priorities DOC Strategic
Priorities
SABC Alignment FY13/14 FY14/15 FY15/16
ICT Policy
Review
Motivate and drive key
policy reviews that affect
the SABC‟s ability to
compete within changing
broadcasting landscape
Drive amendments to Must
Carry Regulations; DTT
channel licencing; SABC
Funding model
Implement amendments
and new funding model
Implement and monitor
E-Skills
Develop staff and content
supplier DTT technical
skills
Align content development
to enable e-skills training
Create collaborations with
e-skills providers
Implement appropriate
training programmes
Develop e-skills education
content for broadcast and
e-learning initiatives
Continuous development
of new entrants
Broadcast/ distribute
content
Continuous development
of new entrants
Broadcast/distribute
content
Broadband
Enable access to
broadband connectivity and
appropriate content through
set top box as part of e-
learning via internet access
and interactive education
content
Develop multi-play-out
capability to suit varied
access formats.
Collaborate with content
suppliers in appropriate
content development
Broadcast education and
information content to
encourage public
participation in e-skills
based education;
Test access via set top
boxes to closed user
group and deal with
glitches.
Implement go-live
awareness programmes
on availability of content
via SABC websites.
Go-live with on-demand
access to SABC web-
streamed content via set-
top boxes
119
Alignment to DOC Priorities
DOC Strategic
Priorities
SABC Alignment FY13/14 FY14/15 FY15/16
Broadcast
Digital
Migration
Launch of SABC
services on DTT
(Dependent on available
funding.
Migrate existing 3 TV
channels and 19 radio
stations on DTT
platforms with improved
capability to compete
against current and
emerging channels
Develop PPP‟s within
National treasury and
Regulatory framework
and launch one PPP
channel.
Subject to funding
availability, launch
News and Sports
channels.
Add two (2) PPP-
based channels
Monitor capability and
financial performance.
Plan new PBS
channels (Education,
Health) on basis of
success of existing
ones.
No strategic initiatives
planned
A full Digital Playout-
centre for all SABC
Channels, completed by
FY2014 (digital
broadcast and
production studios )
100% Infrastructure
readiness
DTT platform feature
enhancements.
DTT platform feature
enhancements
120
Alignment to DOC Priorities
DOC Strategic
Priorities
SABC Alignment FY13/14 FY14/15 FY15/16
Postbank
Create banking/ savings
culture education content
in collaboration with
Postbank
Broadcast Postbank
education content (depends
on Bank funding availability)
Continue with savings
culture/why Postbank
drive
Continue
Rural
Connectivity
Increase the TV footprint to
100% by FY 15/16 through
84% coverage through
DTT, and
16% coverage through
DTH
28% DTT
5.3% DTH
64% DTT
12% DTH
84% DTT
16% DTH
Increase radio footprint to
100% by FY 15/16 via DTT
100% DTT
100% DTT
100% DTT
Cost to
Communicate
TV Licence fees at
reasonable rate (R250 +
6% increases every 2
years).
Access sponsored and
full funding for poor and
indigent licence holders
Increase licence fee by 6%
to R265.00
100% government funding
Maintain fee at R265.00
Access 100% funding
Increase fee by 6% to
R280.00
121
Alignment to DOC Priorities
DOC Strategic
Priorities
SABC Alignment FY13/14 FY14/15 FY15/16
Community
Broadcasting
Maintain 0.2% contribution
of SABC gross revenue to
MDDA for Community
Broadcasting development.
0.2% grant to MDDA
0.2% grant to MDDA
0.2% grant to MDDA
Radio
Frequency
Spectrum
Increase radio
footprint to 100% by
FY 15/16 via DTT
Implement current
available radio
spectrum for
terrestrial radio
100% DTT
Complete assessment
of priority stations and
implement
100% DTT
Continue
implementation
100% DTT
Continue
implementation
Local Digital
Content
Digitisation of SABC
Content archives for
DTT platforms
20% 50% 100%
Regional infrastructure
development for local
production industries,
enable participation
beyond the main
metropolitan areas of
Johannesburg, Durban and
Cape Town.
Dependent on feasibility
studies funding availability
,1 provincial production built
Dependent on funding
availability, additional 3
provincial studios built
and initial 3 brought to
operations
New studio requirements
business plans and
funding requests
completed 5
SABC Corporate Plan 2011
5 KPI’s: MTEF 14 - 16
SABC Strategic Goals
123
In the context of the current environment and meeting the requirements of
public broadcasting in a multi-channel environment, the Board of the SABC
defined the following goals:
1. Putting Broadcasting and Broadcasters back in the
forefront of what the organisation is about;
2. Bringing Editorial integrity back into the platforms, programming
and content, with a particular focus on News and Current Affairs;
3. Having an operating model that is simple and easily understood,
supported by an organisational design that assigns accountability
directly to those charged with execution of the Enterprise plans and
good governance;
124
These goals have been used as the basis of defining the Corporate KPAs –
which are at the heart of the 2014-16 Corporate Plan
4. Building an organisation that is economical, efficient and effective;
5. Focusing on the performance of the organisation at every level and
holding individuals accountable for delivery;
6. Building the digital SABC and integrating the digital future into all
plans and actions; and
7. Managing and reporting on strategy development and
implementation, operational performance and risk management.
SABC Strategic Goals
125
Key Performance Indicators: 2014-16
STRATEGIC OBJECTIVES
KEY PERFORMANCE
INDICATORS – FY 2013 –
FY 2016
KEY PERFORMANCE TARGETS: FY 2013 - 2016
FY13/14 FY14/15 FY15/16
KEY PERFORMANCE AREAS: STRATEGIC GOAL 1 :PUTTING BROADCASTING AT THE FOREFRONT (AUDIENCE ATTRACTION
AND RETENTION)
Managing the attrition of the
SABC audience share against
set targets.
SABC TV Audience
Share, All Adults in
Performance Period
53% 54% 55%
SABC Radio Audience
Share
67% 67% 67%
DTT migration and New
Service Rollout
(Funding Dependent)
Migrate existing SABC
Television channels on to
the Digital Terrestrial
Platform.
Migrate SABC 1,
SABC 2 and SABC 3
on to DTT Platforms.
Launch Sport and News
channels, subject to
availability of funding.
Monitor Audience and
financial performance.
Plan new PBS
(Education, Health)
channels on the basis
of the success of
existing ones.
Launch New SABC DTT
TV Channels
Launch 1 PPP/PCS
model channel + fully
funded Parliamentary
channel
Add 2 PPP Channels +
maintain Parliamentary
channel
Maintain as per
FY2014/15
126
Key Performance Indicators: 2014-16
STRATEGIC OBJECTIVES
KEY PERFORMANCE
INDICATORS – FY 2013 – FY
2016
KEY PERFORMANCE TARGETS: FY 2013 - 2016
FY13/14 FY14/15 FY15/16
KEY PERFORMANCE AREAS: STRATEGIC GOAL 1 :PUTTING BROADCASTING AT THE FOREFRONT (AUDIENCE ATTRACTION AND
RETENTION)
DTT migration and New
Service Rollout
(Funding Dependent)
Migrate existing Radio
services and launch
additional services.
Migrate a total of 19
existing SABC Radio
Channels on DTT
Maintain 19 Radio
Stations on DTT.
A total of 4 new Radio
Channels on DTT
Motivate and drive key policy
reviews that affect the
SABC‟s ability to compete
within the changing
broadcasting landscape.
An ICT Policy that enables
the SABC to compete.
Drive amendments to
Must Carry
regulations, DTT
channel licensing and
SABC Funding Model
Implement amendments
and new funding model.
Implement and monitor
Restoring the integrity of the
SABC Brand and Reputation
Improve overall SABC
brand positioning and
equity aligned to corporate
vision and plan
Obtain a brand health
composite score of 2
Maintain brand health at
a score of 2.5
Maintain brand health at
a score of 3
Drive the marketing of
SABCs DTT rollout
Develop platform Brand
Identity and launch
effective campaigns to
create awareness of DTT
platform
Launch national
Through-the-Line
campaign for SABC
DTT channels while
simultaneously
promoting DTT/Brand
platform
Launch national Through-
the-Line campaign for
additional SABC DTT
channels
Launch national Through-
the-Line campaign for
additional SABC DTT
channels
127
Key Performance Indicators: 2014-16
STRATEGIC OBJECTIVES
KEY PERFORMANCE
INDICATORS – FY 2013 – FY
2016
KEY PERFORMANCE TARGETS: FY 2013 - 2016
FY13/14 FY14/15 FY15/16
KEY PERFORMANCE AREAS: STRATEGIC GOAL 1 PUTTING BROADCASTING TO THE FOREFRONT (STAKEHOLDER MANAGEMENT)
To create a positive link
between SABC, stakeholders,
audiences and communities at
large
Engagement of
stakeholders to enhance
business processes
Define and implement
a coherent
stakeholder plan that
is measured against
the outcomes of a
perception survey
Redefine outputs based
on 13/14 perception
survey outputs and
measure effectiveness of
implementation against
2nd survey
Redefine outputs based
on 14/15 perception
survey outputs and
measure effectiveness of
implementation against
3rd survey
KEY PERFORMANCE AREAS: STRATEGIC GOAL 2 BRINGING EDITIORIAL INTEGRITY BACK (NEWS AND CURRENT AFFAIRS)
National and Local
Government Elections
To provide balanced,
accurate and relevant
coverage of the National
and Local Government
elections and to broadcast
the results of those
elections
• Develop the
broadcast plans for
the national
elections and
secure budget
• Commence with
pre-election
programming.
Broadcast coverage of
the elections meeting
regulatory and legislated
requirements.
Prepare for Local
Government Election.
Broadcast the local
government elections.
128
Key Performance Indicators: 2014-16
STRATEGIC OBJECTIVES
KEY PERFORMANCE
INDICATORS – FY 2013 – FY
2016
KEY PERFORMANCE TARGETS: FY 2013 - 2016
FY13/14 FY14/15 FY15/16
KEY PERFORMANCE AREAS: STRATGIC GOAL 4 ECONOMICAL, EFFICIENT & EFFECTIVE (REVENUE ENHANCEMENT)
Restoring SABC liquidity
status to that of going
concern
Total SABC Financial
Revenue achieved per
annum
R6. 040bn R6. 097bn R6. 292bn
Classical Advertising
Revenue
R4. 238bn R4. 316bn R 4. 472bn
Sponsorship Revenue R420m R392m R404m
TV License Revenue R941m R969m R997m
Other Revenue including
Government Grants.
R442m R420m R419m
129
Key Performance Indicators: 2014-16
STRATEGIC OBJECTIVES
KEY PERFORMANCE
INDICATORS – FY 2013 –
FY 2016
KEY PERFORMANCE TARGETS: FY 2013 - 2016
FY13/14 FY14/15 FY15/16
KEY PERFORMANCE AREAS: STRATGIC GOAL 4 ECONOMICAL, EFFICIENT & EFFECTIVE (COST MANAGEMENT)
Reduce Organisational Costs
Cost Effective and Efficient
Organisation
R5. 541bn R5. 944bn R6. 092bn
Headcount management
Maintain the current
headcount of 3654 staff.
Determine optimal
organizational skills and
headcount incorporating
envisioned DTT operating
Model.
Instill a performance
management culture across
all levels within the
organization.
Maintain headcount
against established targets.
Performance management
across all levels within the
organization.
Maintain headcount
against established targets
Performance management
across all levels within the
organization.
130
Key Performance Indicators: 2014-16
STRATEGIC
OBJECTIVES
KEY PERFORMANCE
INDICATORS – FY 2013
– FY 2016
KEY PERFORMANCE TARGETS: FY 2013 - 2016
FY13/14 FY14/15 FY15/16
KEY PERFORMANCE AREAS: STRATGIC GOAL 4 ECONOMICAL, EFFICIENT & EFFECTIVE
(COST MANAGEMENT)
Reduce Organisational
Costs
Leave liability reduction by
reduction in the quantum of
leave days accumulated
across the organization of
140 130 days (Feb 2013)
20% 5% 5%
Overtime reduction 10%
10% 10%
131
Key Performance Indicators: 2014-16
STRATEGIC
OBJECTIVES
KEY PERFORMANCE
INDICATORS – FY 2013
– FY 2016
KEY PERFORMANCE TARGETS: FY 2013 - 2016
FY13/14 FY14/15 FY15/16
KEY PERFORMANCE AREAS: STRATEGIC GOAL 3 AN EASILY UNDERSTOOD OPERATING
MODEL SUPPORTED BY APPROPRIATE OD
Operating Model and
Organisational Design
that assigns
accountability to those
charges with execution
Efficient organisation Align the SABC
Operating model and
organizational
structure with the
requirements of
efficient DTT
Operations.
Monitor and review
organizational
efficiencies and effect
improvements where
required.
Monitor and review
organizational
efficiencies and effect
improvements where
required.
An efficient organisation
that is able to be
supported by adequate
skills to effectively
implement DTT
Operations
Develop staff and content
supplier DTT skills;
Align content development to
enable eskills training,
Collaborate with eskills
providers
Implement appropriate
training programmes.
Develop eskills
education content for
broadcast and
eLearning initiatives
Continuous development
of new entrants
Broadcast or distribute
content
Continuous development
of new entrants
Broadcast or distribute
content
132
Key Performance Indicators: 2014-16
STRATEGIC OBJECTIVES
KEY PERFORMANCE
INDICATORS – FY 2013 – FY
2016
KEY PERFORMANCE TARGETS: FY 2013 - 2016
FY13/14 FY14/15 FY15/16
KEY PERFORMANCE AREAS: STRATEGIC GOAL 6 BUILDING A DIGITAL SABC (ENHANCED PUBLIC SERVICE)
Universal Access -
increase rollout of
service delivery through
cost effective modern
digital technologies
(Funding Dependent)
SABC broadcast
Infrastructure(digital
broadcast and production
studios) ready to carry full
complement of 12 TV
channels and 19 radio
services on standby for
launch
100% Infrastructure
readiness
DTT platform feature
enhancements.
DTT platform feature
enhancements
133
Key Performance Indicators: 2014-16
STRATEGIC OBJECTIVES
KEY PERFORMANCE
INDICATORS – FY 2013 – FY
2016
KEY PERFORMANCE TARGETS: FY 2013 - 2016
FY13/14 FY14/15 FY15/16
KEY PERFORMANCE AREAS: STRATEGIC GOAL 6 BUILDING A DIGITAL SABC (ENHANCED PUBLIC SERVICE)
Universal Access -
increase rollout of service
delivery through cost
effective modern digital
technologies (Funding
Dependent)
Geographical
Universal
access
Increase the
TV footprint to
100% by
FY15/16
through:
84% coverage
through DTT
and 16%
Coverage
through DTH
28% DTT
5.3% DTH
64% DTT
12% DTH
84% DTT
16% DTH
Increase Radio
footprint to
100% by
FY15/16 via
DTT
100% DTT 100% DTT 100% DTT
134
Key Performance Indicators: 2014-16
STRATEGIC OBJECTIVES
KEY PERFORMANCE
INDICATORS – FY 2013 – FY
2016
KEY PERFORMANCE TARGETS: FY 2013 - 2016
FY13/14 FY14/15 FY15/16
KEY PERFORMANCE AREAS: STRATEGIC GOAL 6 BUILDING A DIGITAL SABC (ENHANCED PUBLIC SERVICE)
Universal Access - increase
rollout of service delivery
through cost effective
modern digital technologies
(Funding Dependent)
A sustainable Internet Protocol
Portfolio
Implement an approved
New Media Policy.
Monitoring and Review Monitoring and Review
Mobile broadcasting (Radio, TV):
Launch of digital mobile
broadcasting (With existing
Services)
Develop a Mobile
broadcast strategy.
Project consolidation Launch
Enable access to broadband
connectivity and appropriate
content through the Set Top Box
as part of e-learning via internet
access and interactive
educational content.
Develop multi-playout
capability to suit varied
access formats,
Collaborate with
content suppliers in
appropriate content
development
Broadcast education and
information content to
encourage public
participation in e-skills
based education;
Test access via set top
boxes to closed user group
and deal with glitches.
Implement go-live
awareness programmes on
availability of content via
SABC websites.
Go-live with on-demand
access to SABC web-
streamed content via set-
top boxes
135
Key Performance Indicators: 2014-16
STRATEGIC OBJECTIVES
KEY PERFORMANCE
INDICATORS – FY 2013 – FY
2016
KEY PERFORMANCE TARGETS: FY 2013 - 2016
FY13/14 FY14/15 FY15/16
KEY PERFORMANCE AREAS: STRATEGIC GOAL 7 – IMPROVED GOVERNANCE AND RISK MANAGEMENT (GOVERNANCE)
Embedding Risk management
into the day to day operations
of the Corporation
Enterprise-wide operations and
unit business decision processes,
general management activities
backed by risk management
analysis and mitigations.
Roll out CURA Enterprise
Risk Management
software training to all
divisions, provinces and
units to enable
compliance.
Divisional Risk
management staff to
undertake international
best practice training.
New staff trained on CURA,
existing staff refreshed
annually.
Divisional Risk management
staff to undertake refresher
courses on international best
practice
New staff trained on CURA,
existing staff refreshed
annually.
Divisional Risk
management staff to
undertake refresher courses
on international best practice
136
Key Performance Indicators: 2014-16
STRATEGIC OBJECTIVES
KEY PERFORMANCE
INDICATORS – FY 2013 – FY
2016
KEY PERFORMANCE TARGETS: FY 2013 - 2016
FY13/14 FY14/15 FY15/16
KEY PERFORMANCE AREAS: STRATEGIC GOAL 7 – IMPROVED GOVERNANCE AND RISK MANAGEMENT (GOVERNANCE)
Embedding Risk management
into the day to day operations
of the Corporation
Enterprise-wide operations and
unit business decision processes,
general management activities
backed by risk management
analysis and mitigations.
Monitor implementation
through strategic and
operational risk reports
tabled monthly at
divisional and Group
Executive levels.
Board monitoring applied
through quarterly Risk
subcommittee meetings
Continuous monitoring
through reports tabled at
monthly Group Executive
meetings, and quarterly
Board meetings.
Continuous monitoring
through reports tabled at
monthly Group Executive
meetings, and quarterly
Board meetings.
An improved organizational
internal control environment
The number of significant internal
audit findings
20% of all audit findings 10% of all audit findings 5% of all audit findings
SABC Corporate Plan 2011
6 The FY13/14 BUDGET
QUESTIONS & ANSWERS
SABC Corporate Plan 2011
THANK YOU
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