Would a streaming levy solve the SABC’s funding woes?

The SABC has traditionally relied on TV licences for income. However, fewer than 20% of South African TV owners actually contribute to this, and the costs of chasing payments tend to exceed the revenue collected.

“People simply don’t see the value in funding a public broadcaster when they have an endless stream of content available elsewhere,” says Leslie Adams, sales director at  Reach Africa.

Minister of communications & digital technologies Solly Malatsi says the current TV licence model is inadequate due to low compliance and high collection costs, as well as the eroding effects of inflation.

Malatsi is considering the introduction of a levy on streaming services to fund the broadcaster, which made a net loss of R198m in the 2023/2024 financial year and is technically insolvent.

Adams says the existence of the SABC continues to matter, as a strong, independent public broadcaster is essential for media diversity and democracy.

But is forcing streaming platforms to implement a levy to fund the SABC a viable solution?

The biggest concern is who is really going to pay, says Adams.

“In some countries, streaming services absorb levies as part of their operating costs, but that’s unlikely to happen in South Africa. We’ve already seen Netflix, Amazon and Disney+ increase their prices multiple times in the past few years,”  he says.

“If this levy goes ahead, chances are high that South Africans will be the ones covering the cost through higher subscription fees. And 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. Or they may even ditching paid services altogether.”

Investment in global productions and local content has slowed down in recent years. Adams says forcing streamers to absorb the levy is also not ideal, given the risk that they could cut back even further on local investments.

“The alternative would be a properly structured levy that  is channelled back into funding local productions, creating jobs and supporting the industry.

“But that’s the key — it needs to be done properly. If there’s no transparency about the way these funds are used, we could end up with another tax that disappears into the system without benefiting South African creatives and content producers.”

Adams says streaming services already face high costs in South Africa. “Bandwidth isn’t cheap, and adding another tax into the mix could make things even more complicated.”

While some countries that have imposed taxes on global streaming services have got it right, others have experienced  unintended consequences, including higher prices, less local investment and frustration among consumers.

A fair and sustainable levy will have to support both the SABC as the public broadcaster and the local content industry, but without making streaming unaffordable, says Adams. The SABC should consider various streaming models rather than a flat tax, while private broadcasters such as MultiChoice and eMedia could be made to contribute to ensure a more equitable funding model.

Critically, says Adams, the SABC must prove it can manage funds responsibly.

The big take-out: Forcing streaming platforms to absorb a levy to help fund the SABC is not ideal, given the risk that they could cut back even further on local investments.

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