Presentation to the Portfolio Committee on Communications 15 March 2006

15 March 2006 Board Presentation to PPC

Presentation to the Portfolio Committee on

Communications

15 March 2006

Board of Director Members: Chairperson, GCEO, COO & CFO

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Mission, Vision & Promise

MissionTo deliver distinctive and compelling programming through sound business practices

VisionTo be the pulse of Africa’s creative spirit

South African Citizen Promise And PositioningYour SABC – The Story teller of the Nation

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Chairman’s Introduction

• GCEO appointed and taking charge of driving the organisation further

• Focus of Board on ensuring the public broadcaster from a strategic and policy perspective are effectively positioned

• Core corporate goals continue to inform our strategies and the allocation of resources

– African Renaissance– Social Cohesion– Nation building– Transformation– People– Technology

• Entering a new phase of challenge• Board is supporting the GCEO and the management team to

position the organisation for success in a world of increasing choice and a need for services and content that speaks to the wants and needs of citizens

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Chairman’s Introduction

• Challenges are eagerly approached but not easily overcome in all instances

• Support from a range of stakeholders will be sought going forward particularly in the areas of the development of the local production industry and the expansion of SABC services and platforms e.g. Regional TV

• The SABC finds itself at one of its strongest points financially in its history

• These resources will be channeled into ensuring the SABC continues to improve on delivery to this nation and the creation of a better world

• The public broadcaster thanks the committee for its support and requests it support going forward

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GCEO’s Overview

• The SABC is concluding a year with significant signs of progress and achievement along a number of fronts

• Radio audiences have largely been maintained or improved relative to private sector operators

• TV audiences are up; SABC 2 recaptured the number two channel position

• The SABC’s brands at Corporate, channel and station levels featured significantly in the latest Sunday Times/Makinor surveys

• SABC services have been expanded on both radio and TV to reach thousands of South Africans previously denied

• Regional TV licences were granted, although not issued• Licences for existing services were amended• Siyanqoba campaign was launched with the broader purpose of using

sport amongst others to drive the development of a psychology of a Winning Nation

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Access to News and Information

• Increased access to SABC services as source of information and entertainment fundamental to delivery of public mandate

• In last five years SABC radio and TV services have been expanded to reach over 5 million additional citizens particularly in rural areas;

• Over the course of the fiscal a number of applications to extend transmitter coverage were submitted to ICASA. Among those approved by ICASA in the 2005/06 financial year were:• The expansion of Ikwekwezi FM in Pretoria• The expansion of Lotus FM in PE• The expansion of Lesedi FM in KwaZulu Natal

• More must be done

• SABC Universal Access Committee has been established and is working to identify and implement expansion plans in ISRDP nodal points and other areas

• Analogue technology has limitations; digital technology solutions will be the most effective in enabling broadcast services’ accessibility

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• Digital technology will more effectively facilitate the delivery of services in all languages and to all communities, particularly on TV

• Public broadcaster is pleased to see this issue on the agenda of the Economic Cluster and are encouraged by the initiatives to promote Broadband usage and the digitization of transmission infrastructure being led by the DoC

• All of us need to take steps to further the pace of this process especially given the demands of 2010 WCS

Access to News and Information

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Increase the spread of current affairs programming and the language spread of current affairs shows. Launched of Weekend Morning Live on S2 Sesotho TV CA Show launched Additional programs to be introduced

Improving skills base Staffing & training for specialist desks. Develop more beat journalists Editorial workshops and frequent training opportunities for regional editors and bulletin

desk editors

Making the SABC accessible to the general public by interactive current affairs programming E.g. conducting at least 3 OBs a month

Strengthening capacity of SABC News by opening new bureaus in Africa, Europe, Asia and Americas

Information for Democratization & Nation Building

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Elections• News Division gave comprehensive coverage of local elections, leading up

to, during and post elections, making a significant contribution to nation-building and the deepening of democracy

• Over 990 editorial and technical staff were involved in providing coverage from all parts of the country, on radio, television and new media platforms in 13 languages.

• Through OBs before the elections, citizens were given an opportunity to engage political parties on issues of relevance

• Broadcasts undertaken across the country in rural, periurban and urban areas

• All parties were covered equitably• SABC coverage has been lauded by private citizens and political parties for

its fairness, accessibility, balance and comprehensiveness. There were fewer complaints lodged against the SABC than in any previous election and none of these were upheld.

• SABC made a significant contribution to building a winning nation and the deepening of democracy

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Social Cohesion & Nation Building

• South Africa is alive with possibility. However, the country’s difficult past, leaves much to be done in terms of building and establishing bridges across the chasms that divide society and addressing inequities.

• The public broadcaster is an important institution with a key role to play in building the nation, creating an environment conducive for social cohesion to take root and prosper and a shared sense of national consciousness to form.

• Many of the SABC’s off and on-screen efforts over the fiscal were directed at addressing the challenges and opportunities facing the nation

• Sport is a key platform on which the nation can build.

• An important campaign initiated by the public broadcaster over the course of the fiscal was that of Siyanqoba.

• The campaign has a wider goal of promoting the message to citizens across the country in rural, peri-urban and urban areas of participating in and being a part of a winning nation.

• The campaign will be extended to other sporting codes and applied in new ways in the coming fiscals. E.g. Tsotsi inspires the Proteas to historic victory (Sowetan)

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African Renaissance

• A significant focus of the SABC’s on and off-screen efforts is on supporting the African Renaissance in our nation and on the continent.

• SABC Africa continues to feature on a free-to-air basis via its terrestrial window on SABC 2.

• There are advanced plans in motion to launch a twenty-four hour news channel that will feature on free-to-air platforms throughout the continent.

• SABC News domestically increased the amount of coverage devoted to the rest of the continent on the terrestrial channels and PBS radio stations.

• The SA BC’s content commissioning efforts in other genre have been underpinned by an approach to celebrate the African story through investment in capacity building, transformation, partnering, development and enhancement of the broadcasting industry locally and continentally

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African Renaissance

• In line with its mandate, Channel Africa produced programmes that cater for adults and also introduce programmes for the youth and children. It was also successful in producing programmes in six Languages English, French, Shilozi, Portuguese, Chinyanja and Kiswahili

• Audiences have increased through 24 hrs broadcast on two platforms, Internet and Satellite. Partnerships with WRN and CBC Radio have also increased audiences through their rebroadcasts of Channel Africa’s programmes. The Service continues to receive positive feedback from listeners.

• Programmes reflected cultural, socio-political and economic realities of Africa. These programmes support the vision of Channel Africa.

• On Television we are actively pursuing discussion with other African Broadcasters aimed at expanding our footprint beyond satellite

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Playing Leading Role in Raising the Bar of Industry Delivery

Media in Society• The SABC has a leading role to play in helping to raise the bar of

relevance, delivery and effectiveness for all players in the media sector.

• As part of its commitment to advance this cause, the SABC co-hosted the Media in Society Conference with SANEF and the University of Limpopo.

• The main objectives of the two day session were to bring together leading electronic and non-electronic media players to discuss and debate key societal/industry issues and chart a way forward for the sector with regards to how it can serve its important role more effectively.

• Over 180 delegates attended the session.

• The SABC continues to take a leading role in ensuring the agreed actions flowing from the session are being addressed.

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Legislative/Regulatory

• The amendment of the SABC’s licence conditions by ICASA was the most significant regulatory milestone yet for the public broadcaster.

• The Broadcast Amendment Act of 2003 specified that the SABC apply for amendments to its licences to reflect reorganization. The process of amending the licences took over a year and involved multiple public hearings and responses to submissions made by third parties. ICASA published draft licence conditions in February 2005 and the final licence conditions were published in June 2005.

• The new conditions come into effect at the end of March 2006. The new licence conditions lay out in detail the programming to be provided by the SABC for the duration of the licence term and in that sense the conditions provide a measurable benchmark for PBS delivery.

• There will therefore be significant changes to the SABC’s radio and television schedules arising from the conditions.

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Delivery on Local Content

• SABC is the largest contributor to the growth of the local production sector, directly and indirectly the Corporation injects over R1B into the sector annually

• Local content, whilst in many instances yields high social returns, is much more expensive than foreign content to commission and showcase

• Shareholder collaboration in developing the local content industry is required – SABC cannot effectively shoulder the burden alone

• Aligned to Government’s objectives to reduce the cost of doing business

• Facilitating a shared national consciousness, identity and social cohesion

• Help to ensure that television platforms do not fall into the trap of being conduits of reversioned Hollywood foreign content

• To this end, the SABC previously proposed that a Local Content Fund be established with support of relevant stakeholders; The SABC has committed R45m for local film in the new fiscal

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Regional TV Channels

• The granting of the licences for two regional channels represents significant advancement in the delivery of public broadcasting in South Africa

• The Corporation proposed two public regional television services: SABC 4 and SABC 5 each licensed for an eight year period;

• The services are envisaged to broadcast initially four hours of original programming per day. This daily broadcasting time would grow to eight hours per day during the period of the licence

• All of the commissioned programs will be in African languages

• The SABC is currently working with the DoC to secure the required financial support to roll out and operate these services over their licence periods

Programming for Nation Building & Social Cohesion

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Technology

• Plan consists of four key elements• Broadcast technology solutions• Information technology solutions• Facilities development and management• Human capital development

• The implementation of the strategy requires R1.3bn over five years and is already underway

• A key area of success for the corporation was securing R450M over the MTEF period to upgrade the technology base of the corporation.

• The benefits of this investment are significant• Skills development• National priorities and objectives i.e. supporting delivery of 2010• Ensuring uptime• Improving quality and lowering cost of content delivery• Improving access, including disabled communities

• Key projects are underway in line with the technology plan developed in FY02/03. One of the biggest challenges however is putting in place the capacity to initiate and complete a number of large and complex projects. Steps are being taken to secure the necessary capacity and expertise where deficiencies exist. Management fully expects that the plan will be successfully executed against in the upcoming fiscal and beyond.

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2010

• The World Cup in 2010 will be able to provide our entire broadcast fraternity with new infrastructure – this will be the legacy

• It also presents radio with the opportunity to upgrade equipment and radio production skill

• A great opportunity to close the gap with the first world in broadcasting terms. i.e.: Syndicating Productions

• Showcase Africa’s growth capabilities and potential through empowering human capital

• Enhance and exploit commercial opportunities

The SABC is committed and gearing up to deliver a professional and world class quality product

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2010

• The right to host 2010 also comes with a number of obligations from a broadcasting and telecommunications infrastructure perspective e.g. IBC and media centers

• Whilst elements of the SABC’s existing technology plan will assist in the delivery of 2010, the event requires incremental and substantial investment over and above the current plan

• Initial estimates put the total incremental costs at R1.3bn

• Important to note that this excludes broadcast right costs

• Digitisation of transmission network across SA is essential to ensure sufficient platforms to bring the World Cup to the South African public

• Discussions are underway with the Shareholder, the LOC and other partners to ensure a successful World Cup is delivered

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• Major external expenses of SABC include Programming and broadcasting, marketing and other goods and services total >R2B

• The SABC is firmly committed to implementing the requirements of the ICT charter and is currently in the process of revising minimum targets for all categories of spend and for each category of BEE firm

• Devolving responsibility to regions for certain categories of spend to more effectively promote economic development outside of Gauteng

• Appointing a Head of Procurement to more effectively direct, monitor and report on spend across the public broadcaster

BEE/SMME Development

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Financial

• Financially the SABC will improve on it historic performance of FY04/05

• Successes of the past are not a cause for complacency, significant challenge faces the public broadcaster e.g.

– Nation building – Implementing new licence conditions– Improving and expanding access to SABC services– Operating in an environment with increasing competition not only for audiences but

also for commercial funding– Industry development in relation to the local production industry– Legislative change i.e. Electronic Communications Act– Gearing up for 2010

• Budget and strategy process that has been informed by amongst others the above

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The Way Forward

• Critical to the achievement of these objectives on a sustainable basis are the following strategies:

• Identifying and exploiting new opportunities in a converging media landscape

• Creating adequate platforms and appropriate infrastructure for enhanced delivery cf. 2010

• Increase services towards marginal communities - deaf/hard of hearing audiences, children/education

• Creating and implementing an economic and human development approach for content creation industries that will enable the development of South African themes issues and stories

• Establishing a sustainable and adequate funding model to achieve these goals

• Expanding and improving participation of Black and SMMEs in the broadcasting value chain

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Three Pillars

• Conversations & Partnerships

• Restoring Dignity

• Building a Common Future

People centered, Technologically Driven Strategically Focused Public Broadcaster

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Strategic Themes

Citizen

Employees

The overall theme:“Serving the Citizen in everything that we do.”

Description

Occupying a trusted, accessible and important place in the daily lives of South Africans

Create a supportive, caring and progressive environment that rewards performance, encourages team work, innovation and attracts, retains and develops the best creative and technical capacity in the industry

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Strategic Themes

Content

Finances

Investing and effectively exploiting distinctive, relevant and quality content across existing and new platforms

Ensure a viable and sustainable funding base and strategy are in place to support the effective delivery of the public service remit

Description

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Strategic Themes

Technology

Platform

Ensuring an effective and relevant technology base is in place to support the delivery of the public service remit

Aggressively embrace and pursue a multiplatform approach to delivering on the public service remit

Description

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In Support of Plan of Action

Area DoC Focus Areas Projects/Initiatives

Citizen • Achieving Higher Rates of Investment

• Increasing Competitiveness of the SA Economy

Universal AccessRevenue auditSiyanqoba CampaignTV & Radio Audience Share#1 Brand Position (Corporate) over the next three to five yearsPerception Survey

Employees

• Broadening Participation in The Economy

• Improving Capacity of the State to Deliver

Structured/coordinated recruitment and career pathingSABC induction programIndustry DevelopmentHR AuditEffective implementation of Performance Management

Content • Contribution to Better World

Full implementation of Content Enterprises structure & processesIndustry Development

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In Support of Plan of Action

Area DoC Focus Areas Projects/Initiatives

Finances • Achieving Higher Rates of Investment

• Increasing Competitiveness of the SA Economy

TV licences (VAT exemption/DoC Study) Classic & Sponsorship sales targets based on market share, as well as growthCommercial Strategy

Technology • Achieving Higher Rates of Investment

ERPCSSMAM

Platforms • Increasing Competitiveness of the SA Economy

• Broadening Participation in the Economy

• Improving Capacity of the State to Deliver

Universal AccessRoll out of Regional TVMultichannel Distribution ProjectLaunching of new 24 Hour News Service

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Key Projects & Associated Timing

Area

•Universal Access

•Funding Strategy

•Employee induction program

•Technology Plan

•24 Hour News Channel

•Subscription Broadcasting ITA

•Regional TV

•Succession & Career Pathing

• Industry Development

FY06-07 Q1 FY06-07 Q2 FY06-07 Q3 FY06-07 Q4


Financial Performance

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Conclusion

• The public broadcaster has an important role to play in building the nation, promoting social cohesion, reflecting cultural and regional diversity in a unifying manner

• This role is made more complex, given the organisation’s funding mix• The SABC is however well positioned to leverage its audiences and platforms to further

push the boundaries of mandate delivery • SABC’s on and off screen efforts will continue to focus on important social issues and

matters concerning the public in a structured and systematic way

• The competitive environment and the reality of convergence have created a number of imperatives for the corporation e.g.

– to extend its content exploitation beyond the TV screen and radio speaker– to begin to shift its funding base to more of an annuity stream model, as well as

increase revenues from our merchandising and exploitation units.

• Human capacity to implement and exploit opportunities is the corporation’s biggest challenge, and the SABC is actively building leadership, management and technical capacity within the corporation as well as the industry

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Conclusion

• We have reached a critical juncture in the development of our nation

• We believe that this is equally a juncture of historic significance for the national public broadcaster

• This is marked by the range of challenges that we have to face in this second decade of our democracy

• Enhanced delivery will require the expansion of our platforms and the building of the broadcasting infrastructure in partnership with DoC, Sentech, Telkom and others

• An economic and human development model for industry advancement is essential for us to develop and promote South African content at scale and on a sustainable basis.

• The SABC will do its part but needs the support of the Shareholder and other relevant parties as well

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Conclusion

• The budget presented, including incremental funding requests from the Shareholder, are underpinned by strategies that seek to position the public broadcaster centrally to positively contribute to the on-going project of nation building SABC

• Moreover the strategies seek to ensure that the broadcaster remains viable and relevant in a environment that will undoubtedly be much more dynamic and competitive than in that which we find ourselves currently

• As the public broadcaster moves forward we thank this committee for its ongoing support and share with you our commitment to the development and continuing transformation of the local production industry by announcing that the SABC has created a film fund for local productions with an initial investment of R40m in this years budget.

Presentation to the Portfolio Committee on Communications 15 March 2006

Documents

Transcript of Presentation to the Portfolio Committee on Communications 15 March 2006