Leslie Adams | Sales Director | Reach Africa | mail me |
The TV licence system is on life support. Less than 20% of South Africans with a licence actually pay. The costs of chasing payments often outweigh the revenue collected.
People simply don’t see value in funding a public broadcaster anymore. They have an endless stream of content available elsewhere. That said, the South African Broadcasting Corporation (SABC) still matters. It provides news, educational programming and entertainment for millions who can’t afford premium services.
Streaming as a funding option for SABC
The broadcaster ensures vital information reaches all South Africans. It promotes local storytelling and supports cultural preservation. A strong, independent public broadcaster remains essential for media diversity and democracy. Therefore, making its sustainability a national priority is crucial.
Solly Malatsi recently announced a possible levy on streaming services as a funding option for the SABC. He is South Africa’s Minister of Communications and Digital Technologies.
Malatsi stated that the current TV licence model was inadequate. He cited “low compliance, high collection costs and the eroding effects of inflation”. Yet forcing streaming platforms to foot the bill isn’t simple.
Will streaming services absorb the levy or pass it to us? Should the levy be implemented, the biggest concern is who’s really going to pay. In some countries, streaming services absorb levies as part of operating costs. But that’s unlikely here in South Africa.
Netflix, Amazon and Disney+ have already increased prices multiple times over the past few years. If this levy goes ahead, South Africans will likely cover the cost through higher subscription fees. With the economy under pressure, that’s not great news.
Many South Africans are already cutting back on entertainment spending. If prices rise again, more people might turn to illegal streaming or free ad-supported content. Some may even ditch paid services altogether.
Could funding the SABC hurt the TV industry?
Beyond funding the SABC, we must consider how global platforms support local content. Over the years, Netflix, Amazon and Showmax have invested heavily in local productions. These investments have given our stories a global audience. But that investment is starting to slow down.
Some platforms are becoming more selective with local content. Amazon has already reduced its spend in Africa. Moreover, streamers are shifting focus from subscriber growth to profitability. This shift is accelerating content churn.
Viewers constantly switch platforms for fresh entertainment. Streaming providers feel pressured to deliver more content at a faster pace. This leads to reduced budgets and a drop in content quality.
If government forces streaming platforms to pay a levy, streamers could cut back on local investments even further. On the other hand, if structured properly, the levy could fund local productions. This would create jobs and support the industry. But that’s the key – it needs to be done right.
If there’s no transparency in fund usage, we risk another tax disappearing into the system. This would fail to benefit South African creatives and content producers.
Could streaming platforms exit South Africa?
Would Netflix, Amazon or Disney+ leave because of this levy? Probably not. South Africa remains a valuable market for streaming services.
Global platforms have dealt with tougher regulations elsewhere. But they could scale back operations or reduce local content investments. They might also bundle costs in ways that make streaming less affordable for South Africans. It’s worth noting that streaming services already face high costs here. Bandwidth isn’t cheap in South Africa.
Many platforms partner with telecom providers to manage data costs. Adding another tax could complicate things even more.
What would a fair and sustainable levy look like?
For this levy to work, it must support both the public broadcaster and the local content industry. This must happen without making streaming unaffordable.
Funds should be reinvested in local films and TV shows. They should not be absorbed into government budgets. The levy must also be reasonable. If too high, streaming platforms will pass the cost onto consumers or cut local investments. This would hurt both viewers and the industry.
When discussing funding for SABC, different streaming models must also be considered. A flat tax won’t work for platforms that operate differently. Additionally, private broadcasters like MultiChoice and eMedia could also contribute.
A local content levy for these broadcasters would ensure shared funding responsibility. This approach prevents placing the entire burden on global streaming platforms.
Finally, the SABC must prove it can manage funds responsibly. Before imposing a new tax, the government needs to fix inefficiencies. It must also ensure transparency. This will help guarantee revenue benefits for South African content producers. A levy could work – but only if handled carefully.
In conclusion
South Africa isn’t the first country to tax global streaming services. Some places have made it work. Others have seen unintended consequences – higher prices, less local investment and frustrated consumers.
If done right, a streaming levy could strengthen South African content creation. It could also help sustain the SABC. But if rushed or mismanaged, it could drive up prices. This could push people toward piracy and hurt local content investment.
The government needs to engage all stakeholders. It must involve streaming services, content creators and consumers. Together, they must find a fair, effective solution. This solution should benefit the entire entertainment ecosystem.
