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VISION, MISSION, VALUES PURPOSE AND STRATEGIC OVERVIEW Legislative and other mandates Organisational Environment SABC Services Strategic Planning Process STRATEGY FY2015/16 TO 2017/18 Financial Health Audiences Content and Platforms Technology and Infrastructure Human Resources
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VISION, MISSION, VALUES • PURPOSE AND STRATEGIC OVERVIEW • Legislative and other mandates • Organisational Environment • SABC Services • Strategic Planning Process • STRATEGY FY2015/16 TO 2017/18 • Financial Health • Audiences • Content and Platforms • Technology and Infrastructure • Human Resources • Governance • SABC Alignment with Department of Communications’ Priorities • BUDGET FY2015/16 TO 2017/18
The SABC is mandated to deliver an unparalleled public value proposition of educating, informing and entertaining all South Africans in all official languages, by means of 18 radio stations and four television channels. A 5th television channel will be launched during the first quarter of 2015. The ability to provide content in all official languages, in multiple genres ranging from children’s and educational programmes, drama, documentaries, news & current affairs to the top-revenue-grossing soap operas, continues to position the SABC as the most trusted broadcast media group in South Africa. The SABC remains the only broadcaster serving the information, educational and entertainment needs of millions of citizens who rely on its radio and television services for access to reliable content in a language of their choice. Radio, being the most accessible and most affordable medium to produce content for, therefore takes pride of place as an SABC-unique selling proposition – with a combined audience, on a weekly basis, of 28.2 million listeners aged 15 years and older.
Television remains the medium of choice for most South Africans – not only is television penetration high, the engagement with television is quite deep. The average South African adult watches 3 hours and 3 minutes of television a day. The public broadcaster’s three television channels attracts, on average, 29.7 million, 27.4 million and 21.1 million viewers per week on SABC1, SABC2 and SABC3 respectively. The SABC’s News channel on the satellite platform is steadily increasing viewership with an average of 1.3 million viewers per week. The broadcaster’s envisaged entertainment channel, Encore, will also be available on the satellite platform and its proposition is to provide quality, memorable retro content to South African audiences. The world of broadcasting is changing on an almost daily basis – new players are entering the market, offerings are constantly evolving and new technology is changing the way in which content is consumed. Regardless of these changes, the necessity of the public broadcaster to provide compelling and accessible content spanning a range of genres and meeting mandate objectives at the same time, remains paramount.
The mandate of the South African Broadcasting Corporation (SABC) as a public broadcaster is embedded in legislation as well as in regulations, policies, codes of conduct and licensing conditions, inter alia the following: • The Constitution of the Republic of South Africa, No 108 of 1996; • The Broadcasting Act No 4 of 1999, as amended; • The Independent Communications Authority of South Africa Act No 13 of 2002, as amended; • The Electronic Communications Act No 36 of 2005, as amended. • The obligations arising from the Broadcasting Act are embodied in the Independent Communications Authority of South Africa (ICASA) Regulations, which determine the licensing conditions for the SABC’s broadcasting services. The Act also spells out the Legislative Charter, which mandates the SABC to meet the broadcasting needs of all South Africans.
The SABC’s bouquet services include 18 Radio Stations, Five Television Channels as well as a digital media offering. (A 19th Radio Station, Channel Africa, is managed by the SABC on behalf of the Department of International Relations and Cooperation.) SABC RADIO STATIONS To many who have limited access to information technology and other more advanced media platforms, radio remains a critical source of information. In this regard, the SABC’s Radio stations continue to serve this large section of the South African population and the PBS Radio stations remain a core tool to deliver the Corporations’ public service mandate.
SABC TV CHANNELS Television remains the medium of choice for most South Africans. The public broadcaster’s three television channels attracts, on average, 29.7 million, 27.4 million and 21.1 million viewers per week on SABC1, SABC2 and SABC3 respectively. The SABC’s News channel on the satellite platform is steadily increasing viewership with an average of 1.3 million viewers per week. A 5th television channel – SABC Encore - will be launched during the first quarter of 2015. • SABC1; • SABC2; • SABC3; • SABC News; • SABC Encore;
DIGITAL MEDIA OFFERING The SABC’s digital media offerings will be increased and enhanced during the following financial years to provide citizens with all-round access to its services. Currently, all platform brands have fully functional websites which have links to social media in order to connect users beyond the website landing page. Audiences can also connect to live streams of all the SABC Radio Stations via the SABC portal site or individual Radio Station websites. This creates another layer to universal access which will be further enhanced once all SABC Radio Stations launch on the DTT platform. The majority of SABC brands have their own Facebook pages and Twitter feeds to engage consumers in social discussions. SABC News and many of the Television programme properties have a very successful presence on YouTube. This allows users to access programmes beyond the traditional point of broadcast using their connected devices.
DIGITAL MEDIA OFFERING Television and Content houses are currently investigating suitable options to stream video or create video-on-demand vaults. The SABC has a rich legacy of visual and audio content and digital platforms create new avenues to extend content beyond the linear broadcast. Applications (Apps) and podcasts are deployed at a number of the SABC Radio Station brands while podcasts are rolled-out across TV content streams to create new audience affinity groups. Digital media will ensure a sustainable future for the SABC from both an audience and revenue growth opportunity perspective and substantial investment will be required to ensure successful rollout of an integrated digital media strategy across the organisation.
Owing to the profound transformation broadcasters are undergoing globally and taking into account the shifts in the world economy, new technologies, changes in audience behaviour and increasingly complex competitive environments, the SABC reviewed and revised its FY2014/15 – 2016/17 Corporate Plan. The SABC undertook an Environmental Scanning process which provided the input required to develop an informed Corporate Plan taking into account internal and external factors. The SABC’s Corporate Plan is further mirrored by its Predetermined Objectives for the period FY2015/16 to FY2017/18.
The Corporation has, through Senior Management, engaged various entities, members of the public and staff members – particularly in provinces outside Gauteng – to solicit their views about their needs and expectations of the Corporation. Other researches such as market research by PWC on the media environment together with Deloitte and Touché on the economic environment informed the strategic planning process of the Corporation. As part of the SABC’s strategic process, a business model canvas was developed to summarise the Corporation’s total value chain. The diagram on the next slide reflects the business canvas:
Change is an opportunity to renew the public broadcaster’s relationship with the citizens of South Africa. The SABC intends to offer more services on more platforms than ever before, and with its strategy, the SABC will become more South African, more provincial and more digital. This is in spite of decreasing public funding and a more challenging advertising market. The SABC has set a course to ensure its long-term future. It’s the start of a fundamental transformation to reposition the public broadcaster. The Corporation’s strategy aims to better position the public broadcaster to meet the vital shifts that are transforming the media universe, and consequently how it connects with South Africans. The SABC will deepen its relationship with South Africans; work in partnership with the creative community to showcase the breadth and depth of South Africa’s reality; and set the Corporation on a clear course to long-term financial sustainability.
In order to fulfil and successfully deliver on the strategy, the SABC will place emphasis on the following key focus areas: Financial Health, Audiences, Content and Platforms, Technology and Infrastructure, Human Resources and Governance. Strategic goals have been developed for each of these key focus areas: Financial Health Audiences Content & Platforms Technology & Infrastructure Human Resources Governance
The SABC’s strategy is about modernising the public broadcaster as well as bringing it closer to South Africans and audiences. The goal is to be relevant, to engage South Africans intensely, while modernising ways of working and ensuring long-term financial sustainability. It is a challenging but exciting transition from past to future.
FINANCIAL HEALTH Goal 1: A financially sustainable organisation The SABC’s main medium-term goal is to ensure that it remains a financially sustainable organisation, by growing its revenue through various traditional and innovative new sources whilst at the same time managing its costs prudently.
AUDIENCES Goal 2: Grow and maintain audience share by meeting the needs and expectations of multi-cultural mass and niche audiences in all official South African languages. As with markets across the world, South Africa needs to adapt to the new reality of TV as one of many screens that command attention in the modern home by producing more of the on-demand content and user-led experiences that interactive TV can offer. For audiences, control and flexibility are crucial – especially when it comes to digital TV services. They want to choose what they watch and when and how they watch it, whether that means using on-demand streamed movies, watching prime-time shows at 05:00 or storing an entire season of a show on a PVR. Any effective strategy for the SABC must rely on the understanding of the swiftness and extent of changes in the market, society and the economy all around. The SABC’s goal in this regard is growing the audience share by meeting the needs and expectations of multi-cultural mass and niche audiences in all official South African languages.
AUDIENCES The SABC has a statutory mandate to reach and serve all South African audiences. To better match the changing needs and expectations of its audiences, the Public Broadcaster has committed itself to refining and refocusing its portfolio of services.
CONTENT AND PLATFORMS Goal 3: Acquiring and scheduling compelling and quality programming, spanning a range of genres and meeting mandate objectives across traditional and emerging broadcast and digital media platforms Delivering high-quality programming and content, spanning a range of genres accessible across multiple platforms is a primary focus for the SABC. The public broadcaster is one of the largest producers and commissioners of South African programming and content for television and radio and, in future, the aim is to include on-line in this range of services. As part of its strategy, the SABC is giving special attention to delivering more programmes with sign-language, procuring productions from companies owned by people with disabilities as well as procuring productions from people in the Provinces and in different languages. This is in line with the National Development Plan that seeks to involve communities, the youth, workers, the unemployed and business in partnership with a capable state. The aim is to develop the capabilities of individuals and of the country, creating opportunities for all.
CONTENT AND PLATFORMS During October 2014, the SABC issued its 9th Request for Proposals (RFP) book which is a milestone for the organisation as the value of the RFP book is more than R600m, surpassing the previous RFP book which was over R100 million, thus making it the largest RFP book issued by the SABC for local content to date. Through this substantial investment, the SABC continues to be the leading consumer of local content in South Africa, and more importantly the foremost generator of employment and development of the independent production industry. As a public service broadcaster, the focus will be to ensure that there is equitable distribution amongst the provinces in terms of allocating work. This will be done to make sure that the process is inclusive of all South Africans and those diverse and never been told before stories can be told. With the new RFP Book, the SABC is committed to provide the South African public with a wide range of high quality local programmes that reflect the diverse cultures, languages, life experiences, interests and needs of its audience.
CONTENT AND PLATFORMS The SABC is mandated to make its services available throughout the Republic. A significant number of South Africans depend solely on radio as a source of information. The Radio FM Universal Access project’s aim is to provide radio services to all South Africans in their preferred language wherever they live in the country.
TECHNOLOGY AND INFRASTRUCTURE Goal 4: Ensuring an appropriate and reliable technology infrastructure for the production and delivery of broadcast programming, digital media content, and supporting commercial revenue generation. The SABC has entered a period of enormous change for the broadcast industry. With the imminent migration to Digital Terrestrial Television (DTT), the SABC’s aim is to create a sustainable platform for broadcasting and content distribution in the digital age. South Africa has passed the tipping point from an industry defined by its technology to a world of connectivity driven by the public expecting content everywhere. The SABC needs to adopt new technologies and business processes to keep pace with the rapid changes in the industry while also continuing to support the business.
HUMAN RESOURCES Goal 5: Investing in a dynamic and motivated fit-for-purpose workforce that embraces learning and is sufficiently adaptable to migrate into the digital age. People remain a priority of the Corporation and it is the talent, passion and commitment of SABC employees that continue to drive success. Human Resources forges the path to ensure that the SABC is a rewarding, progressive and diverse workplace, enabling a high performance culture of dedicated, innovative and highly skilled professionals. The Human Resources Division will guide and drive the process of changing to a high performance organisation through key strategic programmes. To shift the SABC to high performance, there will be focus on best practice benchmarking and the alignment of our people strategies to business strategies.
GOVERNANCE Goal 6: Ensuring compliant governance practices complemented by effective risk management and internal controls. The SABC defines Governance as a set of responsibilities, practices, policies and procedures, exercised by Board, Management and other personnel, whilst managing risks using resources responsibly, with accountability to provide strategic direction and ensuring that organisational objectives are achieved. The diagram below represents a basis with which the SABC’s Governance Framework is founded.
BUDGET RISKS • The following are the major risks to the budget for 2016: • The constrained economic environment anticipated in 2015 and low economic growth rates in South Africa; • Declining revenue growth potential in the Television advertising industry; • Television licence revenue potential declining due to the constrained economic climate; • Employee cost increases which exceed inflation and the revenue growth potential of the SABC; • Increasing costs of Sports Rights; • Increasing energy costs; • Continued devaluation of the Rand versus the US Dollar; • Any unexpected losses in the legal matters under litigation.
BUDGET RISKS • The following items have not been included in the budget for 2016: • Approximately R600m for programming costs to reduce the number of repeats on SABC Television and the need to increase Local programming; • Revenue losses on the expected ban on alcohol advertising; • Sports events which are not considered to be Sports of National Interest; • The following HR initiatives- Benchmark adjustments for middle and senior management and retention scheme for critical staff; • Foreign exchange gains and losses; • Cost of any organisational structure changes; • Costs of the DTT network and the dual illumination period.
WORKING CAPITAL The budget reflects a debtors days target of 65 days reducing to 60 days in 2017 and 59 days in 2018. The budget reflects a creditors days target of 51 days over the three fiscal periods. This is not ideal and the business should move towards collecting debt more efficiently in order to maximise cash flows. RESTRICTED CASH Government grants received for SABC’s digital migration capital expenditure projects are placed in a separate bank account and is ring-fenced for that purpose. It is expected that the projects will be continue beyond the FY2015/16 financial period. The funding plan for long- term capex indicates these amounts for 2016 and 2017.
LONG-TERM BORROWINGS The SABC has facilities for capital expenditure but has actively reduced the facilities for short term cash shortages (overnight accounts) due to the cash surpluses which were in the bank in the past two to three fiscal periods as these were had a significant cost attached to them. The existing facilities include asset based finance.
THE SABC’s FY2015/16 TO 2017/18 PREDETEREMINED OBJECTIVES AS WELL AS QUARTERLY TARGETS MAY BE VIEWED UNDER PART B OF THE CORPORATE PLAN.
