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Presentation to Parliamentary Portfolio Committee on Communications 03 June 2003

Presentation to Parliamentary Portfolio Committee on Communications 03 June 2003. Chairman’s Introduction (1 of 4). Thank you to outgoing Chairperson and welcome to in terim Chair Constructive relationship between SABC and Parliament

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Presentation to Parliamentary Portfolio Committee on Communications 03 June 2003

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  1. Presentation to Parliamentary Portfolio Committee on Communications 03 June 2003

  2. Chairman’s Introduction (1 of 4) • Thank you to outgoing Chairperson and welcome to interim Chair • Constructive relationship between SABC and Parliament • Board is in it’s final year and important that it looks back on what it was mandated to do and what it has achieved • Pleased that we can demonstrate progress not withstanding the challenges we faced and continue to face in transformation • Transformation is a process not an event SABC Presentation to PPC 3 June 03 2

  3. Chairman’s Introduction (2 of 4) • Able to draw on the previous Boards’ work and what has been established in our efforts e.g. • To stabilise the organisation • Improve management capacity and staff relations • Improve stakeholder relations • Set institution on a path of progress and excellence • Diversity and unity of the current Board has been a major asset in supporting the transformation of the public broadcaster • The Board focused its efforts in a number of areas: • Management • Staff • Content • Financial SABC Presentation to PPC 3 June 03 3

  4. Chairman’s Introduction (3 of 4) • SABC steadily moving in area of strategic content excellence • Reflection of our efforts is the number (>200) of national and international awards the SABC has received • Financially, we are in the position where, for the first time, there is a firm grip on the numbers and on the challenges and important choices around funding flowing therefrom • Strong, diverse and competent management team in place • Draft editorial policies completed • Worked hard and deepened democracy in a way that no one else has since the debates on the Constitution • Attempting to get it right the first time but recognise we will succeed over time and not necessarily immediately • It’s important that Parliament supports the SABC in this regard • Final decision on the policies will rest with the Board of the SABC SABC Presentation to PPC 3 June 03 4

  5. Chairman’s Introduction (4 of 4) • Process of Amending the Broadcasting Act has been concluded successfully • Reading of the Amendment Acts indicate complex tasks facing the Corporation and the new demands and challenges increase complexity • Competition for limited resources and therefore important choices must be made going forward • The SABC must implement the Amendment Act in a measured way SABC Presentation to PPC 3 June 03 5

  6. PoliciesBackground (1 of 2) • On 25 April SABC published a number of draft editorial policies for public comment, focusing on policies mentioned in the Broadcasting Act: • Mandate • News • Programming • Language • Universal service and Access • Local content • Religion • Education • The policies explain the SABC’s approach to different areas of its performance and what can be expected from the public broadcaster SABC Presentation to PPC 3 June 03 6

  7. PoliciesBackground (2 of 2) • These policies will help to redefine and establish best practice in public broadcasting and broadcasting in general in South Africa • Moreover, the policies when implemented will provide a number of things, including: • A guide to editorial staff in their daily decision making • A guide to the public on what they can expect from the public broadcaster • The scope of the policies includes: • All SABC content, whether produced by SABC or not • They contain reporting requirements to Board to allow for effective implementation SABC Presentation to PPC 3 June 03 7

  8. PoliciesPublicising • A key challenge is to make the policies widely accessible and easily understood • In this regard the SABC has undertook the following: • Policies launched to key stakeholders and press on 25 April • Copies of draft policies made available in 6 official languages • Copies available at all SABC regional offices and on SABC website • Detailed, easy to read summaries in six official languages at SABC offices and over 1000 post offices countrywide • Poster campaign in post offices • Promos on SABC radio stations and TV channels • SABC talk shows and discussion programmes used to promote discussion on the policies • Newspaper adverts published summarising the policies • Public meetings to discuss the policies to be held in each province SABC Presentation to PPC 3 June 03 8

  9. PoliciesWay Forward • We have had a good response to date - approximately 300 written responses already received • Written responses will be taken until 13 June • Thereafter: • Submissions will be collated • Meetings will be held with interest groups making proposals • Board will finalise policies • The Board expects to finalise the policies by end of 2003 SABC Presentation to PPC 3 June 03 9

  10. Chief Executive’s Introduction • The SABC is successfully making the transition to a stable public broadcaster • Major challenges lie ahead • Management • People • Product • Technology • Significant work has gone into process of stabilising the broadcaster; the stabilisation is at an advanced stage SABC Presentation to PPC 3 June 03 10

  11. Chief Executive’s Introduction Notable achievements and progress relative to objectives set in our Corporate Plan Developing and implementing strategies to ensure compliance with the Act and long-term success and viability Going forward continued focus on delivery Tough and challenging year ahead SABC Presentation to PPC 03 June 03 11

  12. Chief Executive’s IntroductionProgress During the fiscal our action has led to a number of notable achievements in relation to our key performance areas SABC Presentation to PPC 3 June 03 12

  13. Highlights (1 of 4) Amendment Bill passed in Parliament Shareholder Compact Completed Un-picked Bi-media Rebuilt the sales and marketing team Reviewed Commissioning Procedures Content Hub strategy developed Rebuilding PBS radio SABC Presentation to PPC 03 June 03 13

  14. Highlights (2 of 4) • Industry development • Highway Africa • African Writers’ Lab for Radio and TV • SABC Internship Program with Kentron College • Revising Commissioning Procedures • BEE & SMME Development • Actual spend and support via broadcasting services • Launch of News bulletins in SiSwati and IsiNdebele and new current affairs programmes • Rural Development & urban regeneration • Relocation of Ikwekwezi • Integrating CKI into PBS portfolio and developing reinvestment strategy SABC Presentation to PPC 03 June 03 14

  15. Highlights (3 of 4) • Coverage of sport of national Interest, development and minority sport • Heritage and African Culture • Tobias Bodies • Values in Education • Looking Back Moving Forward • Let’s Meet • Remember the Day • Sarah Baartman • News and Current Affairs from and for the Continent • WSSD • W.E.F’s Southern African Economic Summit • Promotion of Public Health SABC Presentation to PPC 03 June 03 15

  16. Highlights (4 of 4) • Finance • Financial policies finalised • Internal audit co-sourced • Financial model complete • Financial realignment project well underway • Policy • Language workshop • Architecture in place for aligning and rebuilding Corporation’s brands • HR • Performance management system • Change management underway SABC Presentation to PPC 03 June 03 16

  17. Focus Moving Forward • Content: • Deliver the best content to fulfil our mandate in the most cost effective way to maximize audiences and revenues • People • Attract, develop and retain the best creative and other talent • Technology • To put in place the appropriate technology infrastructure to deliver on our objectives • Finance • To ensure effective and efficient utilisation of resources and to put in place world class systems and processes • Corporate Reputation • To be the most admired media brand and brands in South Africa SABC Presentation to PPC 3 June 03 17

  18. Specific Delivery Areas(Corporate 1 of 2) • Submit Licence Applications • Regional TV services • Amendments to existing radio and TV services • Finalise Corporatisation • Resolve Bop loan and assets • Develop strategy for Channel Africa • Implementation of EVA • Reduction of overheads and investment in non-productive assets SABC Presentation to PPC 03 June 03 18

  19. Specific Delivery Areas(Corporate 2 of 2) Content Hub implementation Develop & implement Corporate Reputation Strategy Expand strategic relationships e.g. Sentech & international broadcasters Preparation for Election Coverage Realign organisational structure to suit new legislative requirements and ensure operational effectiveness Media and Society Workshop SABC Presentation to PPC 03 June 03 19

  20. Chief Executive’s IntroductionTrade Offs • Going forward it is also clear that there are a number of competing interests and therefore difficult choices must be made • Sport of national interest • Capital budgets required for levels of convergence • Regional services • Funding mix & new revenue sources • Competition (Convergence Bill) • Need to implement current obligations before attempting to institute additional change (e.g. Public Broadcasting Conference) SABC Presentation to PPC 3 June 03 20

  21. Programming: News SABC Presentation to PPC 3 June 03 21

  22. News Programming ChairpersonIntroduction • The public broadcaster’s news product plays a critical role in keeping the nation informed and encouraging debate • Clear improvements in quality and delivery • A number of scheduling and other changes have been implemented as part of a systematic action plan to make news and current affairs more accessible to the public • The current focus is on the content strategy and includes discussion on linking news events of the day with national objectives and values SABC Presentation to PPC 3 June 03 22

  23. News Programming Chairperson Scheduling and Programming • New current affairs programme launches: • Asikhulume on SABC 1 • Current affairs program on X!K FM • Interface - current affairs programme on SABC 3 • Consumer Talk – daily consumer/current affairs show on SABC 3 • Business Update &Business Focus on SABC 3 • Rescheduled programmes • Siswati/IsiNdebele news bulletins • SeSotho/SeTswana news bulletin from 21h00 to 20h30 • English news bulletin from 20h00 to 19h00 SABC Presentation to PPC 3 June 03 23

  24. News Programming Chairperson Telling the Rural Story • ALS news and current affairs shows regularly visit remote villages in rural areas for special broadcasts related to community, cultural and socio-economic issues • Examples of these outside broadcasts include: • Lesedi: Matatiele in the E. Cape focusing on poor service delivery in the province, using case studies from Matatiele, Mount Fletcher and surrounding areas • Ligwalagwala: broadcast team sent to Driekoppies to look at the way the local community fights crime after several suspects were punished by a vigilante group SABC Presentation to PPC 3 June 03 24

  25. News Programming ChairpersonHighlights • In addition, our news and current affairs team have continued to bring events of national and international significance to our nation and the World • Walter Sisulu Funeral • Signing of the Congo Peace Accords • War on Iraq (done from a South African Perspective) • WSSD • A number of awards and accolades have been received for SABC News coverage including: • Media Tenor Award for SABC 1 Nguni bulletin • Accolades for professional and efficient coverage of WSSD • CNN African Journalist of the Year Award in the Radio News Category • Vodacom Award Specialist Category for Radio News • ATKV Radio Award SABC Presentation to PPC 3 June 03 25

  26. News Programming ChairpersonWay Forward • Further scheduling and programming changes include: • News bulletin in tshiVenda and xiTsonga from July (SABC 2) • Changes in the PBS Radio to increase news and current affairs broadcast on radio (e.g. SAFM, Lesedi) • A major conference planned Media & Society • to be held this year with stakeholders, including religious leaders, political parties, government, cultural organisations, women’s bodies and youth organisations • Will debate key issues of global relevance SABC Presentation to PPC 3 June 03 26

  27. Programming: Radio & TV

  28. Programming Chairperson: TV & RadioIntroduction (1 of 2) • Significant work has gone into reviewing the SABC’s commissioning and acquisition procedures • We have looked at how the Corporation spends more than three quarter of a billion rands on content both locally and internationally • All key industry stakeholders consulted, and implementation of changes is planned in the current fiscal • Editorial line that informs our approach to content has been drafted and is in the public domain for comment • A number of key stakeholder interactions (e.g. Language Workshop), the Constitution, as well as the policies of other public broadcasters have informed our draft editorial policies SABC Presentation to PPC 3 June 03 28

  29. Programming Chairperson: TV & RadioIntroduction (2 of 2) • The strategies to reposition our channels and radio stations are being implemented • Over the course of the year the national broadcaster has improved in its delivery, particularly in the area of TV local content • A key focus over the coming year will be the implementation of the Content Hub SABC Presentation to PPC 3 June 03 29

  30. Programming Chairperson: TV & RadioHighlights: Television Local Content Delivery of local content has increased on all channels. Note: *Year to 28 Feb 2003 SABC Presentation to PPC 3 June 03 30

  31. Programming Chairperson: TV & RadioHighlights: Radio Local Content The SABC has continued to exceed local content quotas on both PBS and CBS Radio. Note: CBS excludes BOP and Sunshine; Annual Average across all stations in portfolio Source: SABC Management Info. SABC Presentation to PPC 3 June 03 31

  32. Programming Chairperson: TV & RadioTV: Language The SABC remains committed to providing programming in all official languages. • Content in non-English languages on television has increased over the past 4 years in Nguni, Sotho and Afrikaans • Increase in language is an ongoing process, and a key objective for the current fiscal is to increase language delivery, both overall and in minority languages • Strategies are currently in place to ensure delivery SABC Presentation to PPC 3 June 03 33 Note: * from FY99/00 to 02/03 – Nguni 14.31% to 14.8%; Sotho 10.6% to 15%; Afrikaans 22.58% to 31.1%

  33. Programming Chairperson: TV & RadioPBS Radio Strategy Reinvesting in Radio • Assist the portfolio to realise their full broadcasting potential • Initial recommendations on all 13 PBS stations completed • Interventions into programming and scheduling strategies already underway • Recruitment of programming managers currently in progress • Training programmes for staff being conducted in tandem with development and implementation of strategy SABC Presentation to PPC 3 June 03 34

  34. HR SABC Presentation to PPC 3 June 03 35

  35. HR Chairperson Overview (1 of 2) • The key pillar supporting our success is our people and our culture • Board found many very talented people with creative and technical competencies; • Environment not ideal to fully tap into their creative/positive energies • The last year has seen a focus on performance and change management • EVA • Development of operating principles • Overhaul of performance management system • Focus is on rewarding excellence, remunerating competitively and improving and changing the culture • Ensure long-term sustainability and relevance SABC Presentation to PPC 3 June 03 36

  36. HR Chairperson Overview (2 of 2) • To support our objectives a new performance management system/approach has been developed • Our performance management approach seeks to drive performance in five key areas • Growth and Financial Health • National Priorities and Mandate • Innovation and Customer • Operations and Process • People and Success Behaviours • System being implemented in the organisation to improve what we do and how we work together to achieve common objectives and drive excellence SABC Presentation to PPC 3 June 03 37

  37. Finance & Audit Committee Chairperson(1 of 2) • The SABC remains in a sound financial state with sufficient cash resources to meet the current commitments • The rate of cost increases continue to outpace the rate of revenue growth • The value of TV licences declined by 35% in real terms. This has significantly impacted the financial performance of the Corporation • The need of new services, ageing infrastructure and the demands of digital technologies will challenge the financial capacity of the Corporation over the coming years. Shareholder support will be required to implement these strategies SABC Presentation to PPC 3 June 03 38

  38. Finance & Audit Committee Chairperson(2 of 2) • The focus on enhancing financial controls and information needs of the Corporation received further momentum as the financial realignment controls were implemented • Going forward, the key priorities remain • Sound financial management • Expanding and enhancing business and financial controls • Securing the funding required by the Corporation to implement the technology and content plans • Finalising the incorporation of the SABC under the Broadcasting Act SABC Presentation to PPC 3 June 03 39

  39. Environmental Factors TV Licence Fee Growth If TV Licence fees were increased in line with CPIX inflation since 1998, the rate would be R71 higher today than it is currently. Real CAGR (98 - 02) Nominal CAGR (98 - 02) 300 279 252 236 7.6% 221 208 Actual Tariff = R208 -7.3% 125 CPIX Deflator: 92.8 100 106.6 117.3 86.8 Source: Statistics SA CPIX (annual average) deflator series; 2003 CPIX proj (BMR) Note: Rounding errors may occur SABC Presentation to PPC 3 June 03 40

  40. Environmental FactorsSA Advertising Revenues (98-02) Local our advertising market has faired better than the international market; however, our most significant revenue driver, TV, is growing slower than the overall market. CAGR (98-02) R6.9bn R7.6bn R8.3bn R8.8bn R8.2bn 8.5% 206.8%* -6.1% -3.0% 25.5% 14.6% 6.9% 6.9% Note: * - CAGR 2001-2002 Source: AC Nielsen Ad Index SABC Presentation to PPC 3 June 03 41

  41. Growth in offerings continues to put pressure on audiences and revenue 42

  42. Environmental FactorsSABC Costs Mix . Key Drivers Personnel Programming SABC Presentation to PPC 3 June 03 43 Note: *Year to Dec 2002 Source:

  43. Environmental FactorsContent Cost Mix 60% of total content spend is directed towards local content. SABC Presentation to PPC 03 June 03 44

  44. Conclusion (1 of 2) • Continuous debate about the role and obligations of the Public Broadcaster • SABC is one of the leading institutions at the forefront of transformation • SABC is one of the leading institutions that can promote growth in ICT sector • SABC one of the leading broadcasters that can promote democratic values on the African continent • SABC needs regulatory and legislative stability to achieve these objectives

  45. Conclusion (2 of 2) • Over the coming months, our efforts will focus firmly on: • Fully implementing the Act • Finalising corporatisation • Structural and financial realignment • Applying for regional licences • Amendments to existing licences • Policies • Ongoing implementation of short and medium term strategies • Improving content • Improving brand recognition • The Board is committed to ensuring that the SABC continues to deliver on its public service mandate amidst the many challenges it faces • The Board will seek the support and partnership of its stakeholders to ensure that the SABC continues to improve delivery SABC Presentation to PPC 3 June 03 46

  46. THANK YOU

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