Annual Report Presentation 2005/6 Parliament Committee on Communications 24 October 2006

1. Annual Report Presentation 2005/6 Parliament Committee on Communications 24 October 2006

2. The MDDA Team • Kanyi Mkonza (Chairperson) • Mazibuko Jara (Board Member) • Chris Moerdyk (Board Member) • Lumko Mtimde (CEO) • Jayshree Pather (Projects Director) • Harry Letsebe (Program Manager) • Annand Chaytoo (former CFO) • Mbuyiseni Jafta (new CFO)

3. Vision Each and every South African citizen should have access to a choice of a diverse range of media

4. Mission The MDDA is a development agency that will assist in building an environment where a diverse, vibrant and creative media flourishes and reflects the needs of all South Africans

5. Background, Context and Legislative basis • Section 16 and 32 of the Constitution Act No. 108 of 1996 provides for the freedom of expression and access to information. • MDDA Act No. 14 of 2002establishes a statutory body called the MDDA.

6. Background, Context and Legislative basis • The MDDA is entrusted with the responsibility of promoting media development and diversity in S.A. by providing financial and other support to community (non-profit) and small commercial media projects.

7. Background, Context and Legislative basis • The MDDA Act defines media as all forms of mass communication, including printed publications, radio, television and new electronic platforms for delivering content. • It also defines media development as the development of the media environment and infrastructure, so that historically disadvantaged communities and persons have access to the media as owners, managers, producers and consumers of media.

8. Background, Context and Legislative basis • “…Create an enabling environment for media development and diversity that is conducive to public discourse and which reflects the needs and aspirations of all South Africans;

9. Background, Context and Legislative basis • “ Redress exclusion and marginalisation of disadvantaged communities and persons from access to the media and the media industry;

10. Background, Context and Legislative basis • “Promote media development and diversity by providing support primarily to community and small commercial media projects…”.

11. Background, Context and Legislative basis • ECA provides more opportunities for electronic platforms for delivery of content by community and small commercial groups. • More than 82 community radio stations are on air; • ICASA has recently licensed another 13 community radio stations in rural and urban development areas;

12. Background, Context and Legislative basis • Community TV may be licensed in 2006/7; • Close to 400 grassroots publications across South Africa;

13. Mandate “in the nutshell” • Help create an enabling environment for media development and diversity that is conducive to public discourse and which reflects the needs and aspirations of South Africans.

14. Objects of the MDDA Act – Section 3 • Encourage ownership and control of, and access to, media by HDC as well as by historically diminished indigenous language and cultural groups; • Encourage the development of human resources and training, and capacity building, within the media industry, especially amongst HDG’s; • Encourage the channelling of resources to the community media and small commercial media sector;

15. Objects of the MDDA Act – Section 3 • Raise public awareness with regard to media development and diversity issues; • Support initiatives which promote literacy and a culture of reading; • Encourage research regarding media development and diversity; and • Liaise with other statutory bodies such as ICASA and USA (now USAASA).

16. Corporate Governance • The MDDA is governed by a Board of Directors, appointed in terms of the MDDA Act. It operates asan independent body, expected through the MDDA Act to be impartial and to exercise its powers, perform its duties without fear, favor or prejudice, and without any political or commercial interference. (Section 4, MDDA Act).

17. Funding of the Agency • Money appropriated by Parliament • Money received in terms of agreements with any organization for furtherance of the objectives of the MDDA Act • Domestic and foreign grants • Interest derived from any of its investments,

18. Funding of the Agency • Contributions from Broadcasting Service Licensees not exceeding 1% of their annual turnover in terms of the Electronics Communications Act of 2005 (Section 89), or (as a new funding stream) • Money lawfully accruing from any source.

19. Highlights of the past financial year • The Board, since 2003/4 has approved support, amounting approx. R20m, for: • Just under 100 different media projects • support for the newly licensed community radio stations in the nodal areas earmarked

20. Highlights of the past financial year • Has provided following capacity building support: • Resource mobilisation workshops in all 9 provinces • Workshops held together with AMASA/AMF on advertising and marketing in 4 provinces) • Provided 35 different media managers with bursaries • Provided mentoring support for a number of projects • Have enabled the establishment of 38 new projects (i.e. did not exist before)

21. Highlights of past year cont… • Have funded the following research projects: • Research into challenges in distribution and high printing costs • Impact of competition on diversity • Development of a database of grassroots publications • Indigenous language newspapers – challenges • Representation of women, children, people with disabilities, the elderly in media • Representation of gay and lesbian issues in the media

22. Analysis of applications 2005/6 • Applicants applied for about R105m in grants since Jan 2004 • MDDA income since inception is about R30.6m • Some refused because not licensed or incomplete applications (i.e. no business plan) • Those without proper business plans are given mentoring support to assist them with proper planning. • Those refused are given opportunity to correct applications and apply again.

23. Since Jan-04, the MDDA has given R20,3m support to small media, from public/private sector funding Broadening access to information MDDA 97 projects (National projects located byhead office) MDDA is working with MPCCs and others in provinces with least media to identify potential projects for support Projects by Category

24. New projects

25. MDDA operations2005/6 • 9 staff employed • Process of appointing a new CEO was near completion by the end of period under review and was completed in this financial year. Mr. Lumko Mtimde was appointed in April 2006, commencing his employ in July 2006. • Procedures and systemsin place.

26. Organogram 2005/6

27. Finances 2005/6(For financial year 01 April 2005 to 31 March 2006 ) • Income • Government R 7m • Print Partners R4.8m • Broadcast Partners R5.3m • Foreign Grants R 38,000.00 • VAT refund R 15,000.00 • Interest R1.8m • Total Income R18,942, 000.00

28. Finances 2005/6(For financial year 01 April 2005 to 31 March 2006 ) • Print Partners • Independent Newspapers (Pty) Ltd • Johnnic Publishing Ltd • Media 24 Ltd • CTP/CAXTON • Broadcast PartnersCTP Ltd • Midi TV Pty Ltd (e-tv) • Kagiso Broadcasting (Pty) Ltd • Electronic Media Network Ltd (M-Net) • Primedia Broadcasting (Pty) Ltd • South African Broadcasting Corporation Ltd (SABC)

29. Finances 2005/6(For financial year 01 April 2005 to 31 March 2006 ) • Expenditure • Grant costs R9 591 000 • Personnel R2 538 000 • Administrative R2 053 000 • Depreciation R 222 000 • Total Expenditure R14 404 000

30. Finances 2005/6(For financial year 01 April 2005 to 31 March 2006 ) • Total Administration costs (incl. depreciation) R 4,813 • Total Administration costs (excl. depreciation) R 4,591 • Personnel Exp R 1,621 (excluding the other expenses, in terms of total costs to company approach) • Training Exp R 115 • Administration cost as a % of total income ( includes personnel costs) 24% • Personnel cost as a % of total income 9% • Training cost as a % of total income 1%

31. Finances 2005/6(For financial year 01 April 2005 to 31 March 2006 ) • Community Print R 3,599,996.00 (38%) • Community Radio R 2,719,724.00 (29%) • Small Commercial R 2,438,506.00 (26%) • Research R 681,000.00 (7%)

32. Finances 2005/6(For financial year 01 April 2005 to 31 March 2006 ) • Total Revenue R18. 942m • Total Expenses R14. 404m • Surplus for the year R 4. 538m

33. 2006 and beyond(a few highlights) • Analysis of the ECA implications to the Agency operations – work in this respect is in progress, • Review of Regulations, Policies, Procedures, Systems and process in order to adequately respond to the ECA envisaged growth • Evaluations are planned on range of projects previously supported • Continue conducting research, in particular on the historically diminished indigenous languages and cultural groups, and challenges thereof • Develop sustainable solutions, in pursuit of media development and diversity.

34. 2006 and beyond(a few highlights) • Continue to providing grants in response to applications for media development and diversity • Develop strategies with sector, to build stronger provincial media networks and/or hubs • Continue to build credibility of grassroots media

35. 2006 and beyond(a few highlights) • Together with the sector, will plan to resolve challenges regarding access to advertising revenue for community and small commercial media • Together with the sector, will develop strategies to resolve printing and distribution challenges facing the community and small commercial print media • Will develop approaches for supporting community television.

36. Funding 2006/2007 Income: R21.8m • R9m Government • R5.3m Broadcasting partners • R4.8m Print partners

37. Budget Highlights2006/7 • Government has increased its contribution for 2006/2007 to the MDDA by R2.2m. • Predict that will keep to regulatory cap of 25% on administration in 2006/2007. • Could exceed this cap in following years, unless the contributions increase as envisaged in terms of the ECA.

38. Budget Challenges2006/7 • Funding Agreements with print and broadcast partners do not include any inflation linked increase – costs go up but MDDA budget remains the same • Solution: Treasury has provided an increase to MDDA in recognition of this

39. Budget Challenges 2006/7 (cont) • MDDA has to meet regulatory and funding agreements requirements • Regulations divide funds between small commercial, community and research • Funding agreements divide between print and broadcast • Funding agreements specify no more than 10% to administration and research • Funding is on different cycles

40. Challenges ahead • Capacity of sector to absorb funds – most projects need training initially, then support. Hence, our mentorship approach. • Reaching media neglected communities, in particular the rural areas.

41. Challenges ahead for new media • Further challenges faced by this sector would range from (amongst others) : • Projects loosing skills, given the ongoing movement of skilled activists of the sector, • irrelevant programming and • the lack of sustainability strategies in some projects.

42. Challenges ahead for new media • Accordingly this, therefore requires that community media projects : • develop ongoing on-site / station based capacity building and training strategies and plans; • encourage and ensure ongoing community participation in the projects, • constantly engage with community organisations and follow through community developments, in order to remain relevant, • develop community based sustainable strategies and programmes.

43. Challenges ahead for new media • Community television also faces specific challenges, like : • Frequency spectrum scarcity • Development of a best model of Community TV for S.A. • Sustainability strategies. • Other challenges for print media, would also include : • Advertising and marketing • Printing resources • Distribution • Etc.

44. Our Milestone Achievements • 5 year partnership agreements reached with Broadcast Media and Print Media • 2006 marked the end of first three-year funding cycle • Three years of clean, unqualified Audited Financial Statements

45. Our Milestone Achievements – as ofOctober 2006 • 118 projects supported, with over R20 million approved for disbursement • Media projects supported are located in every province in S.A. • Of the supported projects, 38 are new, did not exist prior to MDDA intervention • Community radio listenership has increased significantly

46. The Agency going forward • Continued compliance with relevant legislations, regulations and funding agreements • Further inroads into underserved communities, in order to decrease the information gap between communities where there is still no access to media • Creation of an environment of language diversity and access to different forms of media by all

47. The Agency going forward • Support for the provincial hubs to support print media’s challenges regarding distribution and printing • Develop an approach for supporting the to-be licensed Community Television services • Providing more support to community and small commercial media projects

48. The Agency going forward • We hope - • to ensure diversity of media in each and every municipal district of our country. • to ensure increased media in different indigenous languages, reflecting unity in diversity, • to ensure rural communities are empowered, jobs are created, poverty is alleviated and we have an informed society.

49. Conclusion • Thank you