Hlaudi Motsoeneng. Picture: SOWETAN
Hlaudi Motsoeneng. Picture: SOWETAN

Hlaudi Motsoeneng’s local content policy has caused the SABC’s television audience share to shrink to its lowest levels to date, with viewers flocking to closest rival DStv.

This is revealed in an internal report seen by Business Day that analyses the broadcaster’s latest audience figures.

They suggest the broadcaster’s financial crisis is deepening as audience share directly tracks advertising revenue, which accounts for 85% of the SABC’s total income.

The report also lends weight to a finding by a recent parliamentary inquiry that a contract Motsoeneng negotiated with MultiChoice, which owns DStv, was detrimental to the public broadcaster.

The SABC Group Operations Business Review dated March 22 shows its television audience share dropped to 45% in the last quarter, down from an average of 53% in the 2012-13 financial year.

Despite revising its targets down dramatically since then, from 60% to 51%, the SABC still fell far short of expectations.

The review describes the last quarter’s performance of 45% as "the lowest on record".

Meanwhile, DStv’s audience share rose from 25% to 28%, "its highest on record".

The review points out the biggest effect was on SABC1, but audience share of SABC2 and SABC3 began to decline in July 2016. This coincides with the implementation of Motsoeneng’s local content policy.

The former chief operating officer introduced a 90% local content quota for radio in May 2016 and 80% for SABC TV in July 2016.

The review said SABC radio audience share had remained stable with most stations, with a slight overall decline to 71% in the last quarter. But it warned of "significant declines" since July 2016 at English-language stations Good Hope FM, Metro FM and Radio 2000.

"Qualitative research needs to be executed across different radio stations to test the effects of the 90% local music implementation," the review said.

A recent parliamentary inquiry into mismanagement at the SABC found Motsoeneng had implemented the local content policy without considering its effect on revenues.

The inquiry’s final report, adopted earlier this month, was also highly critical of a contract Motsoeneng had signed with MultiChoice in 2013. In terms of the five-year contract worth R570m, the SABC supplies DStv with a 24-hour news channel, an entertainment channel and access to its archives.

In 2016, Motsoeneng was paid a bonus of at least R10m for clinching the deal, even though industry sources said the SABC was vastly underpaid.

The parliamentary inquiry found the SABC’s sudden about-turn in its policy of encryption for digital television, which would have given it a competitive edge over DSTv, "appears to have been the result of conditions imposed by the MultiChoice agreement".

MultiChoice insists the deal was done "at fair market value" and has denied having anything to do with the SABC’s change of heart on encryption.

The SABC finally admitted this month that it faced a financial crisis and had been forced to pay for operational costs from its reserves despite earlier denials.

Its cash reserves plummeted to R174m in December 2016, drastically down from more than R1bn in 2015, even though it needs about R650m a month to meet operational expenses.

Despite knowing this, the SABC’s acting CEO, James Aguma, told Parliament at the end of February that its financial performance was "satisfactory", assuring MPs that the broadcaster was "financially stable".

The SABC’s financial crisis is expected to be high on the agenda of an interim board appointed by President Jacob Zuma on Sunday.

The SABC did not respond to repeated requests for comment.

Please sign in or register to comment.