Third Quarter Report - Amazon Web Servicespmg-assets.s3-website-eu-west-1.amazonaws.com/130423sabc.pdf · Third Quarter Report FY 12/13 PCC 23rd April 2013 April 2013 . VISION Broadcasting

Third Quarter Report FY 12/13

PCC

23rd April 2013 April 2013

VISION

Broadcasting for Total Citizen Empowerment

MISSION

To be a people centred, content driven, and

technology enabled,

Strategically focused and financially

sustainable public service

VALUES

Conversations and partnerships

Restoration of human dignity

2

SABC Corporate Plan 2012-2015 3

AGENDA

2 Performance against KPI’s

3 Financial Performance

4 The Government Guarantee

5 Progress - Turnaround

6 Clean Audits

7 Progress – External Audit Findings

2

1 Executive Summary

Questions & Answers

SABC Corporate Plan 2011

1 Executive Summary

Executive Summary The SABC remains committed to delivering against its mandate

to educate, inform and entertain as contained in the Broadcast

Act as well as the Licence conditions stipulated by ICASA

through the Radio and Television Platforms whilst fighting off

increased competition on these platforms.

The Corporation remains committed to stabilising the operating

environment through

• Appointments made at Group Executive level;

• Efforts to right size the organisation in preparation for

successful DTT Operations,

• Concerted efforts on Turnaround; and

• Focus on improving the organisational internal control

environment.

5

Radio

• SABC Radio reaches 26.3 million adults aged 15+ (76% of the

population) on a weekly basis.

• At a 67.4% national audience share, the Radio Division is

currently at its highest level in five (5) years and also boasts a

solid share of 51.7% in the LSM 7-10 market.

• The division continues to deliver against ICASA license

conditions per genre as well as local music quotas.

6

Radio

7

2.4

2.5

2.7

3.2

5.4

5.7

6.6

6.8

10.1

15.1

0 10 20 30

Jacaranda FM

5FM

East Coast Radio

RSG

MOTSWEDING FM

THOBELA FM

METRO FM

Lesedi FM

Umhlobo Wenene FM

Ukhozi FM1

8 of the top 10,

out of 227

Radio stations

Nationally are

SABC Radio

Stations.

Source: SAARF RAMS March – October 2012

Television Whilst delivering against, mandate and license conditions, the Television (TV)

Division faces challenges in delivering against its Audience targets:

• Steady growth demonstrated by competitors is hampering the SABC‟s ability

to maintain and grow Audience Share.

• TV Division delivered 52.23% share in Performance Period (05:00-23:00) at

the end of the quarter under review.

• This declining trend is not unique to the SABC, etv has also showed a

decline of 1.67% since the end of the First Quarter.

• This decline for Free To Air (FTA) broadcasters is juxtaposed by a growth of

2.47% in pay television from the first quarter of this financial year.

8

Executive Summary - Television

• Pay TV Households have increased by 187% since 2007, which represents 23% of

South African households from 10.28% in 2007.

• Whilst the DStv Premium Bouquet showing a decline, exponential growth is in the

DStv Compact Bouquet offering which has grown by 1 690% since 2007 to 1 784

million households in 2012.

9

Television

10

TV Division has put measures in place to hold off the competition

and curb the declining Audience Trends as well as potentially claw

back audiences through:

1. Implementing an Audience Recovery Strategy,

2. Commissioning new titles, and

3. Increased investment into first to market titles and A-grade

movies.

Television

11

The SABC Board has approved an Intellectual Property (IP)

Policy for the Corporations Commissioned Works which aims to:

• Increase the value provided to Production companies through

programme exploitation, and

• Ensure that the Corporation exploits SABC assets to their

fullest.

Broadcast Digital Migration

• The Technology division successfully established the

infrastructure for the SABC‟s first ever High Definition (HD)

Broadcast.

• This represents a significant step towards narrowing the gap

between the Public Broadcaster and the competition.

• The digital studios are ready to commence broadcast, and

• The infrastructure to carry additional channels will be completed

by the end of the financial year.

12

Universal Access

• Access to broadcasting services for all South Africans continues to be a priority for the Corporation, as committed by the SABC in FY11/12 to roll out 300 low power transmitters by the end of FY 13/14.

• The roll out of low power transmitters has been slow, largely due to administrative challenges and funding:

– with a total of 85 sites operational throughout the country, which is 90 sites short of the target.

– The framework to roll out new low power transmitters has been completed and will be submitted through the SABC Governance Structures.

13


2 Performance against KPI’s

Introduction

At the beginning of FY12/13 the SABC submitted a Corporate

Plan based on a request to revise the Government Guarantee

financial targets (GGT) submitted for approval by National

Treasury, through the Department of Communications.

The request to revise the GGT was based on the revised

Projected Financial performance of the Corporation and adverse

trading conditions as a result of the Global Economic downturn.

This request was declined, and the SABC was to realign its

targets to the Government Guarantee as issued.

15

Introduction The SABC has thus continued to assess and measure its performance against the Government Guarantee Targets.

This has culminated in the Corporation only achieving 15 out of the 25 key performance indicators set for this financial year.

Notwithstanding the SABC continues to strive to achieve the targets set and has intensified the focus on the Corporations Turnaround initiatives to ensure sustainability into the future.

16

Performance against KPI’s Key

Deliverables

2012/2013

Q3 Target Actual

Performance

Reason for deviation Corrective Measure

Strategic Objective: Grow total SABC revenue in line with audience share

Key Performance Area: Revenue Enhancement

Advertising

Revenue -

R4,3bn

R1,294bn Partially

achieved:

R1,188bn

Underperformance by

Television Advertising.

Peak season audience

share nearly 4% lower

than budget assumption of

60% during Performance

Period.

Television Sales special

packages for remainder of

fiscal. A range of television

revenue retention

strategies.

Sponsorships

Revenue –

R387m

R108m Partially

achieved:

R76m

Underperformance by

both Programme and

Sports sponsorship

Entrenching recently-

approved Sponsorship

Policy

TV Licence

Revenue –

R924m

R267m Achieved:

collected

R282.2m,

R15.5m (5.8%)

better than

budget 17


Deliverables

2012/2013

Q3

Target

Actual

Performance


Strategic Objective: Grow total SABC revenue in line with audience share

Key Performance Area: Revenue Enhancement

Other

Revenue

(including

Government

Grant) target

for the year

- R 592m

R142m Not achieved:

R85m

The uptake in the traditional

CD/DVD markets is not as

high as planned. More and

more consumers are

downloading content from the

internet rather than

purchasing DVDs

There are signed

Sponsorship contracts for

educational programmes but

the revenues can only be

recorded when the

programmes are broadcast.

Many of the programmes will

only be broadcast in FY 13/14

due to schedule changes

Set short term targets for

new clients to make up

the shortfall.

A digital strategy must be

developed to enable

consumers easy access

to content

Reduce the number of

changes to the schedule

18


Deliverables

2012/2013

Q3 Target Actual

Performance


Strategic Objective: Operations that ensure sustainability

Key Performance Area: Cost management

Total

Expenditure –

capped at

R5.63bn

Quarterly

expenditure

of R1,407bn

Not Achieved:

R1,507bn

including

depreciation and

financing costs,

7% worse than

the budget set.

Employee

benefit costs

maintained at

R1.94bn

Employee

costs

capped at

R487m

Not Achieved:

R526m, 8%

worse than

target

The following factors had a

negative impact:

An adjustment for the

Pension fund holiday, which

was R37m higher as it was

not budgeted for.

This has been budgeted for

in the new financial year.

19


Deliverables

2012/2013

Q3 Target Actual

Performance




- Reduce

overtime by

5%

- Leave liability

by 10% from

2012 Financial

Year

• Achieve 2 %

overtime

reduction

• Achieve 5%

leave liability

reduction

Partially

achieved – the

charge was 1%

less than budget

Not achieved

the leave

liability

increased to

R190m at the

end of the third

quarter.

The SABC Board

approved that

employees could be

offered cash in lieu of

leave during the fourth

quarter in order to

reduce this liability

20


Deliverables

2012/2013

Q3 Target Actual

Performance




Sports rights

costs increase

limited to 9%

• No Quarterly

Target set Achieved:

Sport Rights

were recorded

to be R125m

over a budget of

R78m, 60%

under budget for

the third quarter.

The actual cost

was R68m for

the quarter,

12.8% below

the budget for

the quarter.

Budget flows were

flowed more evenly

through the fiscal.

Sport to provide more

accurate schedules at

budget time.

21


Deliverables

2012/2013

Q3 Target Actual Performance Reason for deviation Corrective Measure

Strategic Objective: DTT readiness and digitisation of internal broadcasting value chain

Key Performance Area: Audience Attraction and Retention

Launch of

SABC DTT

Launch DTT

with 3 new

channels, in

addition to

SABC 1,2 and 3

Launch three

channels on

DTT Platform:

•

24hr News

Channel

•

24hr Sport

Channel

•

Children /

Education

Not Achieved: None of

the envisaged channels

were launched during

the third quarter.

The following related

infrastructure/technology

requirements were

completed:

• New studios required to

broadcast the 24HR

News Channel have

been completed.

• The Final Control

Centre for the Sport

Channel;

• The infrastructure

capability to carry the

sixth channel will be

completed by the end

of the financial year.

The funding limitations

have hampered the

SABC‟s capability to

launch the envisaged

channels.

Reassess channel

strategies against

funding capability.

22


Deliverables

2012/2013

Q3 Target Actual Performance Reason for deviation Corrective

Measure



SABC Radio

Stations on

DTT Platform

Launch all 19

Radio stations Achieved for the trial.

Strategic Objective: Maintain TV average audience market share

Maintain an

average TV

audience

market share of

60%

Televisions

Audience

market share of

60%

Not Achieved: The

Division achieved 53%,

which is 7% below

target.

The increasing

competitive

environment and

increasing take up pay

TV has resulted in the

fragmentation of

audiences.

This is further

exacerbated by the

delays in procuring

new content.

The Division has put

in place an audience

recovery strategy,

which is currently

being implemented.

Performance against

this strategy will be

monitored and

reported on a

quarterly basis.

23

Performance against KPI’s

Key

Deliverables

2012/2013


Measure



Broadcasting of

Local TV

content in

minutes across

platforms (

SABC 1,2,3)

PBS – 75% of

minutes across

platforms

(ICASA 55% -

minimum in

Performance

Period)

The ICASA target of

55% was met and

exceeded.

The Internal target

Achieved in Prime

Time: SABC 1 – 76.35,

SABC 2 – 78.92

Not achieved in

Performance Period:

SABC 1 – 70.28% and

SABC 2 – 62.50.

PCS – 35% of

minutes across

platforms

(ICASA 35% -

minimum in

Performance

Period)

Achieved

Prime Time: 37.52 and

Performance Period:

39.02 24

Performance against KPI’s

Key

Deliverables

2012/2013


Measure



Local Content

Investment –

R800m

Local Content

Investment –

R200m

Not achieved: Cash

investment – R162.5m,

R37.5m (18.8%) below

target.

Amortisation –

R156.4m against a

budget of R201.8m,

R45.4m (22%) below

budget.

Due to operational

inefficiencies the RFP

Book was only closed

during the third

quarter, this delayed

the related cash

investment and

amortisation.

The efficiencies in

the contracting

process will be

improved to enable

productions to

commence

timeously to meet

planned and

scheduled

transmission dates.

25


Deliverables

2012/2013


Measure



International

Content

Investment –

R200m

International

Content

Investment –

R50m

Not achieved: Cash

investment – R45.6m,

R4.6m (9.2%) below

target.

Amortisation –R67.3m

against a budget of

R48.7m, R18.6m (38%)

over the allocated

budget

The delay in internal

processes had a direct

impact on the

organisation‟s ability to

utilise (schedule)

/amortise the planned

content and this

impacted the cash

flows are impacted.

The cash flows for

new commitments

are negotiated to

move some over into

FY13/14 and closer

to the broadcast date

of the titles and

thereby reducing the

working capital days

26


Deliverables

2012/2013


Measure



International

Content

Investment –

R200m

(continued)

• Misalignment of

cash flows between

the quarters

• Replacement of

commissioned titles

with licenced titles

due to delays in the

commissioning

process

The cash flows for

new commitments

are negotiated to

move some over into

FY13/14 and closer

to the broadcast date

of the titles and

thereby reducing the

working capital days

27


Deliverables

2012/2013

Q3 Target Actual

Performance

Reason for deviation Corrective

Measure

Strategic Objective: Grow Radio average audience market share


Grow and

maintain SABC

PBS audience

market Share

to 56% by

FY14/15

56% Achieved –

PBS Radio is

at 58%

Grow and

maintain

SABC PCS

audience

market Share

to 11% by FY

14/15

11% Not achieved –

PCS is at 9.4% The target set for the year

is not achievable due to

the competitive landscape

– PCS Radio is the

portfolio that is directly

targeted by the

independent commercial

radio stations.

28


Deliverables

2012/2013

Q3

Target

Actual

Performance




Grow and

maintain

SABC PCS

audience

market Share

to 11% by FY

14/15


PCS is at 9.4% Weekend listening to

commercial radio is

generally on the decline not

only for SABC PCS but

other commercial players

due to the “out-and-about”

nature of the urban

audience segment. Radio,

like other media types, battle

to retain a prominent

position in the active lifestyle

of the typical listener

segment (day time as well

as in the evenings)

The targets should be

revised to a more realistic

level in line with the

competitive environment.

One primary market

commercial radio station has

already launched in KZN

with two more to follow

during F2013/14 and 10

licences given to launch

during the F2014/15. The

pressure will continue as

new players become

operational

29


Deliverables

2012/2013

Q3

Target

Actual

Performance




Improve SABC

PCS radio

Share of LSM

7-10 market of

18% by FY

14/15


PCS radio

share at 15.6%

The target set for the year is

not achievable due to the

competitive landscape; LSM 7-

10 is the target audience that

is highly contested for not only

by radio but by other media

such as Internet and digital

platforms. This target audience

has a plethora of sources for

information and entertainment

because they can afford them.

PCS Radio share of LSM 7-10

also continues to decline in the

evening due to increased

pressure from a growing TV

viewership base (mostly as a

result of exponential growth in

DSTV uptake in this market)

The targets should be

revised to a more realistic

level. Digital media and the

impact of growing TV

viewership in this segment

will continue to put pressure

on the portfolio‟s

performance going forward.

30


Deliverables

2012/2013

Q3 Target Actual Performance Reason for

deviation

Corrective Measure



Broadcasting of

Local Radio

content in

minutes across

platforms

PBS – 70%

of minutes

across

platforms

Achieved at 72% excluding

Lotus FM which has an

ICASA special concession

of 20%

PCS – 30%

of minutes

across

platforms

Achieved at 34%

31


Deliverables

2012/2013

Q3 Target Actual

Performance



Key Performance Area: Broadcasting Technology Infrastructure

Digitization of

studio 1 and 2

Completed

digitisation

of Studio 1

and 2

Not achieved:

The Sport

production

systems have

been updated at

a total cost of

R15m.

The studios upgrades were part

of the Siemen‟s/Atos contract

dispute. Finality to the matter

was reached at the end of the

second quarter.

Whilst dealing with the contract

a fire incident occurred at the

Henley studio block where

studios are located.

The Project scope is

under review, it is

envisaged that the

studios will be

completed by end of

2013.

Technology is

confident on speedy

completion of this

project as it is the

least complex project

in comparison to the

various projects that

the SABC has

embarked on.

32


Deliverables

2012/2013


Strategic Objective: Universal Access

Key Performance Area:

Increase TV

footprint to 100

% by year 2015

Roll out 30

power

transmitters

( Radio and

TV)

Not achieved: 28

were completed as of

December 2012

bringing the total

number of sites to 85.

13 sites are work in

progress.

ICASA has approved

20 more sites for

television and

SENTECH has

committed to

servicing more sites.

SENTECH has faced

challenges accessing sites,

when environmental

concerns exist

Funding for the low power

transmitters has been

declined twice by National

Treasury.

A scope change

document has been

completed to expand

radio but exclude TV

as it benefits from

DTT.

Not approved scope

change to continue

only with FM

expansion is under

review

Increase Radio

footprint to 92

% by year 2015

33


Deliverables

2012/2013



Key Performance Area: Governance

Embed risk

management

into day-to-day

activities of the

Corporation.

• Board and

Group Exco

Strategic Risk

Registers

• Fraud Risk

Registers

• Review,

enhance and

Board

approval of

risk

management

policies.

• Fraud risk

Assessment

Not Achieved: Group

Risk Management:

through procurement

Division are in the

process of appointing

a service provider

There is no skill in the

Division.

Funds have been

allocated to the project

enabling project

completion by 31st

March 2013.

34


3 Financial Performance

Financial Performance

36

The SABC made a R125m profit during the quarter under review, however

the Corporation was 69% short of meeting the budget target set for the

Quarter.

Revenue

37

The Revenue target of R1.811 billion for the quarter was not met by 9.9%, leaving the

corporation to achieve R1.632 billion.

-

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

1 000.0

TV AdvertisingRevenue

Radio AdvertisingRevenue

SponsorshipRevenue

Trade Exchange TV Licence Fees GovernmentGrants

Other Revenue Content andCommercialExploitation

820.5

367.8

75.8

15.2

282.2

41.8 18.3 10.0

936.0

358.4

108.1

39.3

266.7

40.0 43.4 18.8

Actual

Budget

Revenue

38

Financial Statement Item Cur Quarter

Actual

Cur Quarter

Budget

Cur Quarter

Variance

Cur Quarter

Variance Reason for Deviation

R'000 R'000 R'000 R'000

TV Advertising Revenue - 820.50 - 936.00 - 115.50 - 12.3%

Schedule changes and Audience

Ratings at the end of the second

quarter made a significant

contribution to the below target

performance

Radio Advertising Revenue - 367.80 - 358.40 9.40 2.6%

Sponsorship Revenue - 75.80 - 108.10 - 32.30 - 29.9%

Lower Sport and Programme

sponsorship

Trade Exchange - 15.20 - 39.30 - 24.10 - 61.3%

TV Licence Fees - 282.20 - 266.70 15.50 5.8%

Government Grants - 41.80 - 40.00 1.80 4.5%

Other Revenue - 18.30 - 43.40 - 25.10 - 57.8%

Private funding for educational

programmes was lower than

expected due to delays in

programme completion and

transmission. Funds received

remain as “received in advance on

the Balance sheet until the

programme is broadcast.

Content and Commercial

Exploitation - 10.00 - 18.80 - 8.80 - 46.8%

Total Revenue - 1,631.60 -1,810.70 - 179.10 - 9.9%

Operating Expenditure

39

The Corporation exceeded the operational expenditure target of R1.313 billion for the

quarter by 5.8%. The overspends were in the areas of Sport Production and Rights

and Employee Compensation and Benefits

Operating Expenditure

40

Financial Statement Item

Cur Quarter

Actual

Cur Quarter

Budget Cur Quarter Cur Quarter Reason for Deviation

Actual Budget Variance Variance %

Programme and Film Costs 231.4 255.9 24.5 9.6%

Sports Rights and Production 194.3 124.8 - 69.5 - 55.7% The budget flows were spread

more evenly than the actual spend

during the year.

Broadcast Costs 99.6 116.8 17.2 14.7%

Signal Distribution & Linking Costs 132.2 139.1 6.9 5.0%

Employee Compensation Costs 525.8 487.3 - 38.5 - 7.9%

There was an adjustment for the

cost of the pension fund holiday

during the quarter of R37m. Whilst

the basic salaries line item was

better than budget other line items

were worse than budget.

Productivity Gains - - 120.1 - 120.1 100.0%

Marketing Costs 29.2 57.3 28.1 49.0%

Direct Licence Collection Costs 34.3 43.8 9.5 21.7%

Professional and Consultancy costs 14.5 42.9 28.4 66.2%

Other expenses - Operational, Personnel

& Administrative 127.2 165.1 37.9 23.0%

Operating Expenditure 1,388.50 1,312.90 - 75.60 5.8%


4 The Government Guarantee

The Government Guarantee

Based on the latest projections, the SABC will not meet the GG

target surplus of R536m.

• Revenues are projected to be R763m (11,6%) lower, and

• Operating Expenses R369m (7%) higher than target.

• Depreciation is expected to be R193m (41%) lower, and

• Finance costs R177m (78%) lower than target.

42

The Government Guarantee - Revenue

43

Revenue FY 11/12

Actual GG11/12

FY12/13

Projection GG12/13

GG12/13

Variance

GG12/13

Variance GG13/14

R'000 R'000 R'000 R'000 R'000 % R'000

Advertising revenue - 4,035.8 - 3,878.0 - 3,938.6 - 4,267.9 - 329.3 - 7.7% - 4,492.0

Sponsorship Revenue - 361.4 - 704.0 - 372.9 - 738.0 - 365.1 - 49.5% - 775.0

Trade exchanges - 68.7 - 104.0 - 109.7 - 111.0 - 1.3 - 1.2% - 117.0

TV Licence fees - 892.6 - 968.0 - 914.3 - 990.0 - 75.7 - 7.6% - 1,034.0

Government Grants - 129.6 - 191.0 - 217.2 - 196.0 21.2 10.8% - 201.0

Other - 158.2 - 147.0 - 188.8 - 155.0 33.8 21.8% - 164.0

Content & Commercial

Exploitation - 31.3 - 89.0 - 47.2 - 94.0 - 46.8 - 49.8% - 100.0

Total Revenue - 5,677.6 - 6,081.0 - 5,788.7 - 6,551.9 - 763.2 - 1.6% - 6,883.0

The Government Guarantee - Expenses

44

Progress in meeting the Guarantee conditions

45

Guarantee Conditions Comments Compliance

Develop a detailed turnaround

plan outlining milestones,

timelines, executives responsible

for achieving the cost saving &

revenue enhancement measures

The SABC developed and implemented a

Board Approved Integrated Turnaround

Plan.

Achieved

46

Guarantee Conditions Comments Compliance

Implementation plan for

addressing issues raised in the

Auditor General‟s (AG) report

The SABC has implemented the

recommendations of the Auditor General.

Tremendous progress has been made in

this regard. Policies and Systems are

continuously being improved.

Achieved

Cost cutting and revenue

enhancement measures to be

captured in the Shareholder‟s

Compact

• In March 2012, the SABC submitted a Corporate

Plan, with targets based on an application to

revise the Government Guarantee targets.

• The Application to revise the GGT was declined

by National Treasury.

• The SABC had to thus revise the targets to be

aligned to the Government Guarantee.

• The Cost cutting and revenue enhancement

measures have been appropriately captured.

Review

completed in

2012 and

approved by

the Board

Progress in meeting the Guarantee conditions

Headcount Reduction

Headcount in the third quarter has reduced by 17 staff members from the 3 647 at

the end of the second quarter , to stabilise at 3 630 employees.

47

3 185 3 346

3 634 3 755

4 098 3 889

3 690 3 631 3 630

-

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

Mar 2005 Mar 2006 Mar 2007 Mar 2008 Mar 2009 Mar 2010 Mar 2011 Mar 2012 Dec 2012

T

h

o

u

s

a

n

d

• A reduction of 11% has been achieved since March 2009. An

additional 4% will lead to achieving the GG target.

• Divisional structures have been submitted and discussed with

the Group Executive. Currently the structures presented

indicate a headcount reduction in the senior level posts of the

organisation i.e. Group Executive (115) and General Manager

levels of organisation as follows:

48

The Government Guarantee – Headcount Reduction

• During the Second Quarter, the first phase of the Skills Audit,

was completed internally by Human Capital Services. This

phase was designed to identify the level of skill or Qualification

within the organisation.

• Out of the 3 630 employees in the organisation a total of there

was a 67.7% participation rate.

– Senior and Middle management level employees had the highest

participation rate levels, with the former at 70% and the latter at 73%.

– Employees at scale code 404 - 407 had a 62% participation rate level.

49

Skills Audit

• The qualifications were captured on SAP according to the

National Qualifications Framework.

• The Request for Proposal (RFP) for the second phase of the

skills audit is combined with the workforce planning segment.

• This commenced in January once all procurement processes

for appointing a service provider had been finalised.

50

Skills Audit

Looking Forward – Last Quarter

Due to the latest sales projections, we are expecting the Revenue

to improve.

Based on this fact, it is unlikely that we will post a loss at year

end.

In view of cash position in excess of R1bn at the end of

December, the SABC made an advance repayment of the

Nedbank Loan in an amount of R416m.

51


5 Progress - Turnaround

Turnaround – Progress Report

• The SABC continues to place major emphasis on the

Turnaround Programme established as part of the Government

Guarantee.

• The SABC reports to and attends meetings with the Monitoring

Task Team (MTT), made up of National Treasury, DoC and

SABC members on a monthly basis.

• At the beginning of FY2012/13 the SABC consolidated its

efforts to focus on the areas that would ensure organisational

sustainability i.e.:

– Revenue Enhancement

– Cost Containment

– Audience Attraction and Retention, and

– Governance and Control

53

Turnaround – Progress Report

54

Project Status January 2012 December 2012

Completed 1 4

On Track 3 12

Delayed 13 10

Behind 4 0


6 Clean Audits

At the end of FY 11/12 the SABC received a Qualified Audit

report.

In an effort to focus its SOE‟s to achieve Clean Audits the

DoC has held several meetings focussed on the subject.

SABC commits to achieving a Clean Audit in 2014.

56

Clean Audits

57

Progress on Audit Findings

OPINION NEGATIVE AUDIT

OUTCOMES

ACTION STEPS KEY

MILESTONES

TIMELINES /TARGETS FOR

KEY MILESTONES

RESPONSIBILITY AND CONTACT

DETAILS

PROGRESS TO DATE

Qualified Statements could not be finalised due to the fact that Film and Sports rights were carrying amount of R862 467 000 and related accruals of R598 799 000 included in trade and other payables. The income statement disclosed amortisation and a reversal of impairments of these rights of R1 370 395 000 and R3 281 000 respectively. The company does not have a formal process in place to assess the completeness of these disclosures. .

RESOURCES • Centralise all the Television finance team • Deploy resource to the different areas to deal with short term capacity and skill levels

The Television finance team was consolidated Secure additional resources for the project

March 2012 August 2012

GE TELEVISION [email protected]

Achieved Not achieved The audit plan was drafted for the office of the CFO in July 2012. In October 2012, approval was granted for additional resources to assist with the process. The tender process closed in December 2012. The successful bidders were scored in the week ending 18 January 2013. The candidates will begin their tasks on 10 February 2013

58


OUTCOMES

ACTION STEPS KEY MILESTONES

TIMELINES /TARGETS FOR KEY

MILESTONES


DETAILS

PROGRESS TO DATE

Qualified Statements could not be finalised due to the fact that Film and Sports rights were carrying amount of R862 467 000 and related accruals of R598 799 000 included in trade and other payables. The income statement disclose amortisation and a reversal of impairments of these rights of R1 370 395 000 and R3 281 000 respectively. The company does not have a formal process in place to assess the completeness of these disclosures. .

PROCESSES Schedule weekly

meetings to monitor

and drive execution

Introduce weekly

meeting from September 2012

September 2012


Achieved and on-going The meetings started on 14

August 2012

Address the number

of “live” events that

are created on the

schedules

Clear all live events

31 January 2013


In progress. A control

measure was introduced in

October 2012 for the approval

and reporting of live events.

As at the end of the reporting

period there were a number of

live events remaining on the

system. The live events on the system

relate to Advertiser funded

programmes and have no

impact on Television

amortisation and news. Sport

events are less of a risk as

these are amortised at 100%

of the cost on run 1. Monitoring is taking place on

a daily basis by the TVBMS

team who ensure that each as

run log consists of 24 hours to drive completion


59



OUTCOMES



MILESTONES


DETAILS

PROGRESS TO DATE


Complete

reconciliations of

suspense accounts

and post

transactions on SAP

IPM

Transfer manual

entries onto SAP

system; and Complete the

reconciliation on

cost suspense

accounts

(Account 550010

and 550018) and

accumulated

amortisation

suspense

accounts

(Account 540200

and 540208)

28 February 2013 31 March 2013


In progress The balance on media asset

costs at 31/03/2012 was R

178m (credit). The balance

has reduced to R 68m (credit)

as at 25/01/2013. In progress The balance on accumulated

amortisation as at 31/03/2012

was R 3.321bn (credit). The

balance has reduced to R

1.200bn (credit) at

25/01/2013. To date the

amount of R 2.121bn has

been processed on SAP ECC.

60



OUTCOMES



MILESTONES


DETAILS

PROGRESS TO DATE


Document processes

and procedures for

the financial

processes for media

assets

To have

procedure

documents in place

31 March 2013


The project will commence in

February 2013

Perform a physical

tape count for year-

end purposes

A complete

count of the archives

31 March 2013


The project will commence in

March 2013

Address the current

inconsistencies

between the financial

genre captured in

SAP ECC and

TVBMS

Find an interim

solution to have

a view of inconsistencies Implement a

process to

address the inconsistencies

31 March 2013


Work in progress: A field has been created in

SAP ECC to reflect the

TVBMS genres in order to

identify the inconsistencies.

The transfer of information will

occur once all of the “live”

events have been cleared .

Standardise the

monthly profitability

reports

Drive a process

whereby

information is

supplied is the

same format and template

31 October 2012


Achieved: The monthly profitability

reports were standardised in

August 2012

61



OUTCOMES



MILESTONES


DETAILS

PROGRESS TO DATE


SYSTEMS • Resolve data table

issues, between

data extracted from

the business

warehouse reports

and SAP IPM.

Find a solution

to ensure

information

consistency that

will ensure that

the extracted

data and the

general ledger are in balance.

31 March 2013


Preliminary investigations

indicate that the Content stock

report is not able to

specifically deal with a profit

centre but is able to deal with

total TV. A work around is

currently being investigated to

ensure that the correct audit

evidence will be available for

audit.

Introduce a

validation protocol to

validate financial

data entries between

external and internal.

Implement a

system

validation

between

external and

internal combinations

31 March 2013


Partially Achieved The system

validation control was

introduced in November 2012.

The system is now able to

perform a validation

combination check between

external and internal accounts

to ensure that these are not

swopped during the

accounting process. An accumulated external/

internal balance of +/- R30.4m

must be cleared.

62



OUTCOMES



MILESTONES


DETAILS

PROGRESS TO DATE


Run amortisation

through the system

(SAP IPM)

Process monthly

amortization

through SAP IPM

31 March 2013


The amortisation between

April 2012 and December

2012 was processed through

the system.

Implement the

interface between

SAP ECC and

TVBMS

Update TVBMS

fields with

contract

reference

number (SAP

MAM ID) and

project number

(SAP Project no.)

31 March 2013


Work in progress: The play history fields need to

be increased to include fields

that reflect the contract reference and project ID data. The contract and project ID

fields will allow the team to

match the data from SAP

ECC and TVBMS with each

other. This is a manual process System analyses showed that

not all of the contract

reference fields were

populated consistently. This

process is now 85% complete

and the data must now be validated.

63



OUTCOMES



MILESTONES


DETAILS

PROGRESS TO DATE

Qualified No transparent

system of risk

management.

Non-compliance

with Sec

51(1)(a)(i) of the PFMA.

Embedding risk

management in the

operations is in

progress. Risk

assessments for the

individual Divisions

are done on a monthly

basis to track

progress. All

Divisional risks are

captured on the

CURA Risk System

and monthly tracking

and reporting are

performed.

However Specific

audit findings

stated the

following; No risk

assessment was

conducted for the

news division. No

fraud risk

assessment was

conducted for the year.

The News Risk

Assessment was

conducted during

October and

November 2012. Fraud Risk

Assessment

service provider

has been sourced

to resume on 1

March 2013, due to

the lack of skill in

the division.

GE: RISKAND GOVERNANCE motswenism@s

abc.co.za

News Risk Assessment

Complete. All Divisional and Provincial

Risk Assessments Review will

be concluded by 31 March

2013. Fraud Risk Assessment in

progress

64



OUTCOMES



MILESTONES


DETAILS

PROGRESS TO DATE

Qualified Formal policies and

procedures of how

company's process of

performance,

planning, monitoring,

and measurement

review and reporting

are not yet reported to

the accounting

authority because they

were drafted late.

Non- compliance with

Sec 51(1)(a)(i) of the PFMA.

The SABC's

Corporate Plan and

Shareholder

compact for FY12/13

have been completed

and will be presented

to the SABC Board

for approval.

Furthermore, a

Performance

Management Policy

has been drafted and

is currently being

consulted with

organised Labour.

Planning is to present

this to the next Board

meeting for approval.

Approval

by the

SABC

Board of Directors;

Approval of

the

Corporate

plan by the

Hon.

Minister of

Finance

and

Communications

SABC: GCEO [email protected] [email protected]

The SABC documented a

Corporate Plan in Feb. 2012

for approval to the

Honourable. Ministers of

Communications and Finance.

The targets included in this

plan were based on an

application made by the

Corporation to revise the

Government Guarantee

Targets. The revisions to the

GGT requested were declined

by National Treasury and the

SABC had to re-draft the

Corporate Plan to ensure

alignment to the GG targets.

The revised document has

been submitted to the Board

and Minister of

Communication for approval.

65



OUTCOMES

ACTION STEPS KEY

MILESTONES


MILESTONES


DETAILS

PROGRESS TO DATE

Qualified Out of 66 planned

performance

indicators, only 22

were achieved. This

indicated 70% of

planned performance not achieved.

A number of the key

performance indicators

still outstanding from

FY201/12 has been

reviewed and are

continuing in the

SABC's Corporate

Plan for the new fiscal.

Progress and

achievement of same

are being tracked on a

quarterly basis through

quarterly feedback

reports to the Board,

Ministerial Task Team and Shareholder.

Quarterly SABC: GCEO [email protected] [email protected]

In February 2012 the SABC

submitted a request to

National treasury to revise

especially the Financial

targets that were set based on

the Government Guarantee

obtained in 2009. The

revisions were declined as a

result the targets set are

based on the terms and

conditions stipulated in 2009.

On reviewing the year to date

performance the SABC has

achieved some of the performance indicators.

66



OUTCOMES


TIMELINES /TARGETS FOR

KEY MILESTONES


DETAILS

PROGRESS TO DATE

Due to the poor IT

governance structure,

the line managers are

allowed to operate at

their own discretion

which compromises

the ability to use the

Information

Technology systems

to support accurate and reliable reporting.

Projects are

underway to replace

the Radio Ad Sales

system and enhance

Television systems

to ensure the

integrity of information.

A Request for

Information (RFI)

for the replacement

of the Radio Ad

Sales system was

prepared in

consultation with

Technology

Division is ready to

be issued through Procurement.

Landmark system upgrade.

Further Landmark

enhancements to

address Audit

findings (2011-

2012) have been specified.

Price negotiations

for Landmark

enhancements are underway

February 2013. October 2012. November

2012. February 2013.

GE: TECHNOLOGY [email protected]

Work in progress:

Complete: The

Landmark system

has been upgraded

from Version 10 to Version 15.

SABC Corporate Plan

2013-2016

Presentation to the Parliamentary

Communications Committee

23rd April 2013

68

Purpose of the presentation

To brief the PCC on the Corporate Plan for the SABC for the MTEF

Period, focusing on:

• The current environment

- Regulatory environment

- Media environment

- Government Guarantee

• SABC Strategic Goals

• SABC Key Performance Areas and Indicators

Public Broadcasting

69

In its simplest definition a “public

broadcasting service” is a broadcaster

that serves the public as a whole and is

accountable to the public as a whole.”

Ozias Tungwarara Director, AfriMAP

VISION

Broadcasting for Total Citizen Empowerment

MISSION

To be a people centred, content driven, and

technology enabled,

Strategically focused and financially

sustainable public service

VALUES

Conversations and partnerships

Restoration of human dignity

70

SABC Corporate Plan 2012-2015 71

AGENDA

2 Critical Issues

3 The Competitive Environment

4 Alignment to Shareholder Priorities

5 KPI’s: MTEF 14 - 16

6 The FY13/14 BUDGET

2

1 The Legislative Environment

Questions & Answers


1 The Legislative Environment

Founding Legislation

The SABC, as the national broadcaster, is mandated to inform, educate and

entertain South Africans

The Constitution: • Equality, non-racism, non-sexism

• Freedom of Speech

• Freedom of Religion

• Right to Dignity

The Broadcast Act Includes the Broadcast

Charter

Defines PSB, PCB, CB &

Comm Broadcasting

The ECA Defines ICT

Links BA and ICASAA

ICASA Act Empowers Icasa, who:

Issues licences

Regulates environment

73

SABC is also

guided by: • PFMA

• The Companies Act

• King I,II & III

• Treasury Regulations

• SABC DAF

Broadcast environment – Regulatory

74

Current Licencing Framework

The Current Licences were issued in 2005 & were effective from 2006, setting quotas

and obligations intended to ensure that the SABC met the mandate outlined in the

Broadcast Act

SABC met or exceeded licence quotas on radio & television for FY 12-13

The only exception is broadcasting in marginalised languages – where the local

production industry does not have capacity to meet SABC’s needs.

However, the current primetime TV requirements negatively impact on the SABC’s

ability to deliver against the multiple criteria of revenue, audiences and mandate

Regulatory review

A range of regulations have been prejudicial to the SABC and as regulations are

reviewed ahead of the switch to terrestrial DTT, the following require attention:

• Review of ‘must carry’ regulations

• Review of Sports of National Importance

• Review of Local Content on Television, Commissioning and Music regulations

• Impact of the licencing of additional radio stations

• ICT policy review


2 Critical Issues

Broadcast environment – the media

76

• Migration from analogue to terrestrial – everyone will be able to access

multi-channel transmissions

• New technologies result in new ways of consuming media and new

players . Fragmentation of audiences and revenue

• Convergence sees traditional definitions of „broadcasting‟ becoming

obsolete

• Broadcasting no longer a passive, schedule led experience for audiences,

but active engagement where they determine where, when and how they

consume content

This undermines advertising-based funding models – which has serious

implications for the SABC, with its commercially-driven funding model.

The SABC‟s strategic focus, however, will remain on delivering public value and the

corporation has developed its unique value proposition in direct response to the

pressures it now faces

Broadcast environment – Review of Regulations for DTT

• ICASA has issued the final DTT regulations and this has created an

opportunity to review existing regulations developed for an analogue

broadcasting environment.

• The regulations for an analogue broadcasting environment have had a

significant and unsustainable impact on the SABC‟s Financial

Performance as the Corporation is heavily reliant on Commerical funding

to the tune of 82% of the SABC‟s total Revenue Streams.

• The current Prime Time TV requirements negatively impact on the

SABC‟s ability to deliver against the multiple criteria of revenue,

audiences and mandate

77


The following areas present as an opportunity to review;

The “Must Carry” Regulations

• The current regulations mandate the SABC to make available at no

additional cost (free of charge) all SABC television channels to

Subscription television broadcasters.

• This requirement does not take into account the SABC‟s investment in

content acquired through a competitive process and the public purse.

• This regulation is in conflict with the ECA of 2005 which allows the

parties to negotiate commercial terms in the must carry agreements.

78


Regulations on Sports of National Interest

• Whilst acknowledging that the Free To Air broadcasters need to acquire

rights first before they are obliged to broadcast listed sporting events of

national importance. These regulations provide a list of sporting games

or tournaments that are to be broadcast by the Free To Air broadcasters.

• This requirement gets more complex when considering the public service

obligations that we have to the general public.

• Yet the regulations do not put sufficient mechanisms to oblige

competitive subscription broadcasters to avail the rights to the SABC on

reasonable terms.

– This is despite the fact that the SABC on the one hand is obliged through “Must Carry”

regulations to avail its channels that may have primary sports rights to subscription

broadcasters, free of charge.

• So far the broadcast of listed events such as the PSL and Bafana Bafana

games have yielded negative financial returns relative to the high cost of

the rights investment made

79


Review of Local TV Content, Commissioning and Music Regulations

• ICASA intends to review the regulations in respect of local content,

commissioning and music. This will provide an opportunity for the SABC

to review its ability and performance on the commissioning of local

content and utilization of music across platforms. The impact of needle

time, intellectual property rights and the Copyright Act will have to be

seriously considered by the SABC as they have significant financial

implications. The review of the regulations will commence in year one

and will be finalised by ICASA over the medium term in 2015.

• Other regulations that will be reviewed are the Advertising and

Sponsorship Regulations and Development of a Licensing Framework for

digital radio.

80


Introduction of more Competition for radio and television

During the FY2013 – FY2016 period, ICASA intends to license additional

broadcasting players. These are:

• Licensing of additional six Medium Wave sound broadcasting services in the primary

markets in 2013;

• Licensing of additional four FM sound broadcasting services in the secondary markets in

2013;

• Licensing of additional Free Air Television (FTA) broadcasting services in FY2015 –

FY2016;

• Licensing of additional terrestrial subscription television broadcasting services in FY2015

– FY2016; and

• New DTT channels by existing incumbents.

The SABC strategy will take cognizance of the impact these new players will

have on its revenue and audience share. Parallel to that will be a need to secure

increased public funding as the challenge to compete with commercial

broadcasters and other media platforms will make it difficult for the SABC to

effectively deliver on its public service mandate.

81

Broadcast environment – ICT Policy Review

• The Minister of Communications has launched the process to review and

develop an ICT Policy scheduled for 2013 – 2015.

• This SABC has subsequently appointed two executives to represent the

SABC on the panel.

• This process will provide the Corporation with an opportunity to review

critical policies affecting its existence in the market and help define the its

role against our mandate.

• This process would have to deal with critical questions facing the

Corporation to name but a few:

– The funding model, and

– Coexistence with other players.

82

Broadcast environment – SABC Funding Model

• The Corporation is funded 80-82% through commercial Revenues, 15-

16% Commercial Revenues, and approximately 3% Government Funding

– This funding model is juxtaposed by mandate requirements that require the

Corporation to fulfill their Public Service Mandate to deliver: • Television and Radio : Local content and language quotas for PBS and PCS Stations

• Listed Sports of National Interest

The related amortisation costs of the abovementioned factors costs approximately 46% of the

organisational operational expenses.

– The SABC level of funding received from the Public through Licence Fee

collections currently projected at R929.76 m for FY12/13 falls far short of the

potential R2bn (at the current tariff that could be raised. • The last TV licence fee increase the SABC was awarded was in 2009 after four years of no

increases

• Further the SABC‟s ability to collect from the affluent market that own DSTV devices and pay

subscriptions has been severely hampered as current legislation does not compel DSTV to collect

on the SABC‟s behalf.

• The current Must Carry regulations preclude the SABC from collecting payment from satellite

broadcasters for the presence of SABC1, 2 and 3 on their bouquets.

83


• SABC has made a concerted to drive are review of the Must Carry Regulations to

be replaced by those that enable the SABC to turn its financial outlook.

• The following are some considerations that must be brought into the solution

seeking process:

– TV Licence fees

• S27 of the Broadcasting Act of 1999 as amended states that television licence revenue

shall be used solely for funding the SABC‟s public service mandate.

• Although the revenue collection has improved and the number of accounts

strengthened in 2003-2004, the growth comes at an increased collection cost for PBS

funds.

• Regular increases are crucial to raise PBS funding to adequate levels, failure to

implement increases has resulted in TV licence revenues decline in real terms

84


– TV Licence fees

• Had the SABC been allowed annual tariff adjustments since 1998, the current R250.00

fee (effective as from 1 August 2009) would now have been R620.00 – R370.00 (148%)

more than at present. The irrecoverable loss, as a result of not implementing these

increases, to the SABC over said period is estimated at more than R1 billion.

• The GG Targets were formulated on the assumption of TV Licence Tariff increases,

which has not taken place.

The SABC has only received six (6) increases in the last 22 years, the SABC recommends

that the Minister of Communications consider granting a CPI related increase for every

second year 2013 -2017

85


• Approval of this tariff increase must be obtained in orders to:

– give effect to the Corporate turnaround strategy by increasing the SABC‟s public

funding contribution;

– assist the Corporation in delivering on its Government Guarantee and in meeting its

undertaking to return to profitability;

– enhance funding for the national broadcaster‟s mounting obligations in terms of its

Public Service Broadcasting (PSB) mandate; and

– assist the SABC financially in achieving its ultimate aim of providing all South Africans

with universal access to its broadcasting services.

– The proposed TV license tariff increases over a six (6) year period 2013 to 2017 are

enclosed as Schedule A below.

86

87

The Government Guarantee, as provided by National Treasury in 2010,

continues to play a dominant role in the SABC‟s financial strategy. It is

worthwhile noting that while afforded the ability to raise the R1.473 billion in

bank loans, the SABC utilized only R1 billion through its Nedbank loan.

In addition to the Company‟s trajectory of prudent financial management, the

SABC has recognised the losses incurred through the interest rate payments

attached to the loan. To mitigate this, R777.8 million of the capital portion and

interest of R240 million have to-date been paid back to Nedbank. The

remainder of the debt now stands at R222 million plus interest charges of R8

million at the end of January 2013. Chairman’s foreword to the Corporate Plan

Broadcast environment – Gov. Guarantee


88

Actual & projected performance against key targets

89

Human Capital Costs

SABC was required to cap its salary costs at R1.5bn by year-end. As a result of

addressing salary anomalies and annual increases, coupled with the uniquely skilled

human capital intense nature of the corporation, these costs are projected at R1.99bn

Other Costs

There was a significant improvement in the management of other costs. The cost of

direct licence fee collection dropped by 34%.

Programme and film costs were reduced by 48.4%, while there was a 38.8% saving

against GG marketing target of R256m. However, these latter savings have the

potential to negatively impact on future revenue.

Broadcast environment – the Gov. Guarantee

90

Filling of vacant positions

In late March 2013 the President appointed an Interim Board to serve for a

period of six months ending September 2013. The following Board members

were appointed:

The following Directors were appointed in a Non-Executive Capacity:

• Ms Ellen Tshabalala (Chairperson);

• Ms Noluthando Gosa (Deputy Chairperson)

• Mr Ronny Lubisi;

• Mr Vusumuzi Mavuso

• Dr Iraj Abedian;

The resolution of the cases against three suspended Group Executives has

been prioritised. Additionally the Corporation is expediting the process to fill

the positions of Group Executives of Legal, Risk, Technology, and the Head

of Strategy


91

Revenue Revenues were meant to increase significantly year on year in order to reverse the

severe deficit that the SABC had suffered.

The significant challenges that were brought about by increased competition and

wider choice for the advertising industry, the reputation damage the company

suffered as a result of reported cases of corruption and the significant economic

down turn resulted in the SABC not being able to meet some of the targets



92

24-hour News Channel

As a result of funding shortfalls, the 24-hour News Channel has not been

launched. Despite receiving conditional approval from the Minister of

Communications for the channel launch, the Minister of Finance rejected the

funding application.

The 24-hour news channel would have carried events of national

importance, the cost of changing schedules on the existing channels in order

to accommodate these events has resulted in losses of R17million.

Sports of National Interest

The costs of broadcasting the listed sports of national interest remains

beyond the reach of the SABC. In addition, schedule displacement costs of

moving scheduled content to make way for these listed sports amounted to

R82m for the year to end-January 2013.

A dedicated sport channel would mitigate these losses. The funding request

for this channel was also rejected by treasury


3 The Competitive Environment


SABC’s Audience Share

Fiscal Share Trends for All Adult TV Ratings

Source: Saarf TAMS (Television Audience Measurement Survey)

The SABC committed to deliver 60% share of Adult (15+) Audience Ratings in the performance period measure

(05h00-23h00) for an average day Monday to Sunday. In order to deliver on this target, the organisation set itself a

number of other targets including a prime time target of 65% since free to air generally dominates against pay TV

during prime time. SABC1 has recently come under severe pressure during both the performance period and prime

time – leading to a drastic decline in network share.

Fiscal Share Trends for LSM 7-10 Adult TV Ratings

Source: Saarf TAMS (Television Audience Measurement Survey)

With pay television dominating this market, no single SABC channel is able to deliver in excess of a combined Dstv

share. The last time was in FY08/09 when prime time share for both SABC1 and SABC2 exceeded that of Dstv. It is

nevertheless the responsibility of commercial channel SABC3 to deliver to share targets in this market.

Annual Share Trends for All Adult Radio Quarter Hours

Source: Saarf RAMS (Radio Audience Measurement Survey)

The SABC’s 3 commercial or

PCS stations (5fm, Good

Hope FM and Metro FM)

have managed to deliver

enough listening to ensure

SABC radio targets are met

in 4 of the 5 years shown

Annual Share Trends for LSM 7-10 Radio Quarter Hours

Source: Saarf RAMS (Radio Audience Measurement Survey)

While commercial obligations rest

with just 3 of the SABC’s radio

stations, the PBS portfolio delivers

over half of the share of the

commercial audience (LSM 7-10)

share that the SABC enjoys. The

SABC’s share of this market has

grown to over half of national

listening by LSM 7-10.


South African Households – Census 2011

Both AMPS and Census 2011 confirm

data for 14.5 m households. Census

shows that a television set is the third

most important household item after

a cell phone and stove.

Black households make up 56% of

the 3.7m satellite service universe in

Census 2011 – clearly beyond the

tipping point for adoption.

Source: Census 2011

Source: AMPS 2012

• Dstv‟s penetration into LSM 4-6 is small at just over a tenth. At 51% of 34million adults however, this LSM

segment comprises the bulk of the national adult population

• The platform has reached near saturation in LSM10, and reaches over two thirds of LSM 9.

• But the platform (at 39%) has yet to reach beyond half of the country‟s most mobile living standard segment –

LSM 7

5.8 7.5 10.0 12.3 18.5 24.9 29.3 35.1 38.6 22.3 34.5

36.5 42.0 47.7 52.4

36.6 48.7

56.7 58.3

62.4 67.1

66.4

74.4 79.3

83.4 85.1

86.8

2007 (9.6%) 2008 (13.9%) 2009 (18.0%) 2010 (20.8%) 2011A (24.0%) 2011B (26.6%)

Dstv Penetration by LSM: 2007-2011

LSM 10

LSM 9

LSM 8

LSM 7

LSM 4-6

LSM 4-6 6%

LSM 7-8 23%

LSM 9-10 71%

Dstv 2007 (9.6%)

LSM 4-6 24%

LSM 7-8 33%

LSM 9-10 43%

Dstv 2011B (26.6%) LSM 4-6

33%

LSM 7-8 38%

LSM 9-10 29%

Top TV 2011B (1.6%)

The Rise & Rise of Pay TV (All Adults)

• Pay television is no longer the luxury spend of an elite – Top TV has demonstrated that better than anyone

with a third of its subscription base coming from LSM 4-6. Dstv however, finds it hard to shake off that old

image and continues to generate almost 80% of its subscriptions from those in the LSM 7plus segments.

Source: Saarf AMPS Jan-Dec 2011


• Like most of the developed world, pay television is fast

becoming an ordinary rather than a luxury expense for South

Africans. But it is still accessed mainly by upper LSM

households.

– Those in LSM 9-10 account for just 15% of the population, but make up

42% of the pay television universe.

– On the contrary, LSM 4-6 accounts for 52% of all South African

households, but just under a quarter of them (24%) have access to pay

television.

• Overall, 28% of South Africa‟s 14.1million households

currently access one or other pay television service (Saarf

AMPS, June 2012).

• This has grown from 17% in December 2008.

46% of the 5.1m households that have some access to the internet do so via a mobile phone

and this rises to 56% among Black African households

White and Indian South Africans access the internet predominantly

from their homes with only 42% of latter households having NO access

at all and 30% of the former.

Gauteng and Western Cape have the highest household access to the

internet at 46 and 44% respectively with Limpopo and Eastern Cape

with the lowest at 24 percent.

Source: Census 2011

Total Unique Visitors Mar 2012-Feb 2013: 2,692,998

Unique Visitors to SABC Portal: Monthly

Source: DMMA Site Catalyst

Top 10 Sections visited on the SABC portal

Top Ten pages account for 88.7% of traffic (12.4m page views) through www.sabc.co.za over year 1 March 2012 to 28 February2013

Source: DMMA Site Catalyst

http://www.sabc.co.za/

Dstv has positioned itself well for the

maturity of the supply side of the

Netflix/Hulu business model. While we wait

for better broadband – a small demand is

nurtured and perfect data collected for

investment decisions in the future

“BoxOffice lets you download the latest blockbuster releases with your PVR decoder and online. Enjoy movies at home”

“Watch 350+ hours of your favourite TV shows, sport and movies online whenever you want every month! This video on demand service is free & exclusive to premium subscribers”

SA’s First-to-Market Advantage …

Source: AMPS Jun 2012 and www.dstv.co.za

Broadband Speed (and Costs) are the Supply side Barrier to Convergence of Technologies in SA – Demand is undeniable

http://www.netindex.com/download/allcountries/

Graph Period: Jul 10, 2010 - Jan 8, 2013

12.75Mbps is Global Average Household Index (180 countries)

A US Example

Source: www.hulu.com and www.netindex.com

http://www.netindex.com/download/allcountries/

http://www.hulu.com/

http://www.netindex.com/


The WAR for Television Audiences

NUMBER OF TV CHANNELS BY BROADCASTER

Source: Dstv website (www.dstv.com) Top TV (Mail & Guardian Article 12 Oct 2012)

0

20

40

60

80

100

120

DStv (Multichoice) Top TV SABC Network e.tv

115

59

3 2

The Fragmentation of TV Audiences

• DSTV‟s growth is based on the collective strength of its myriad channels,

most of which barely deliver 0.1 AR

• Apart from offering viewers so many channels, DSTV has deep pockets, delivering

around R12 billion in subscription fees alone per annum, which allow them to acquire

whole slates of first to market international content and to market this content

aggressively. They have also begun investing in (good) locally commissioned content in

their battle to keep their subscribers – e.g.. Isibaya

http://www.dstv.com/

Source: SABC Report [to Icasa] on TV Compliance with Licence Conditions Oct-Dec 2012

• The SABC has licence conditions that result in the bulk of their schedules consisting of

local content. For instance, SABC2‟s local content quota may be 55%, but additional

quotas on the delivery of languages other than English; marginalised languages;

current affairs, children‟s programming, education and drama… for both prime time and

performance period mean that the channel has to populate in excess of 78% of its

prime time schedule with more costly local content. For SABC1 this results in the

channel dedicating 76% of its schedule to local content.


1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

TOTAL TV 10.8 11.5 13.5 15.5 15.4 15.8 16.5 17.3 18.2 18.4 18.9 19.2 18.5 18.9 17.6

SABC NETWORK 9 9 10.5 10.9 9.9 9.8 10.4 11.3 11.6 12.1 11.9 12.2 11 11 9.4

ETV 0.3 0.9 1.5 2.5 3.2 3.8 3.5 3.3 3.8 3.9 4.1 4.2 3.8 3.7 3.4

MNET 1.5 1.4 1.2 0.8 0.9 0.8 0.9 0.8 0.8 0.5 0.4 0.3 0.3 0.2 0.2

TOP TV 0 0 0 0 0 0 0 0 0 0 0 0 0 0.1 0.1

DSTV 0 0.2 0.3 1.3 1.4 1.4 1.7 1.9 2 1.9 2.5 2.5 3.4 3.9 4.5

0

5

10

15

20

25

83% Share

71% 63%

53%

65%

Source: Saarf TAMS

MNet’s 2 hour Open

window closes

AND Rural Panel Intro

Dstv wins PSL

and launch of Compact

Etv breaks even ff Seoul SWC

SWC 2010 stalls SABC

declines

ANNUAL NATIONAL ADULT (16+) RATINGS 05H00-23H00 MON-SUN

SA 1998-2012

Annual % Shares of Viewing (Individuals) 1981-2011 UK Year Channel

BBC1 BBC2 ITV 1 C4 + S4C C4 +1 Five Others (inc. GMTV)

1981 39 12 49 - - - - 1982 38 12 50 - - - - 1983 37 11 48 4 - - - 1984 36 11 48 6 - - - 1985 36 11 46 7 - - - 1986 37 11 44 8 - - - 1987 38 12 42 8 - - - 1988 38 11 42 9 - - - 1989 39 11 42 9 - - - 1990 37 10 44 9 - - - 1991 34 10 42 10 - - 4 1992 34 10 41 10 - - 5 1993 33 10 40 11 - - 6 1994 32 11 39 11 - - 7 1995 32 11 37 11 - - 9 1996 33.5 11.5 35.1 10.7 - - 10.1 1997 30.8 11.6 32.9 10.6 - 2.3 11.8 1998 29.5 11.3 31.7 10.3 - 4.3 12.9 1999 28.4 10.8 31.2 10.3 - 5.4 14 2000 27.2 10.8 29.3 10.5 - 5.7 16.6 2001 26.9 11.1 26.7 10 - 5.8 19.6 2002 26.2 11.4 24.1 10 - 6.3 22.1 2003 25.6 11 23.7 9.6 - 6.5 23.6 2004 24.7 10 22.8 9.7 - 6.6 26.2 2005 23.3 9.4 21.5 9.7 - 6.4 29.6 2006 22.8 8.8 19.6 9.8 - 5.7 33.3 2007 22 8.5 19.2 8.6 0.2 5.1 36.5 2008 21.8 7.8 18.4 7.5 0.7 5 38.8 2009 20.9 7.5 17.8 6.8 0.7 4.9 41.4

Year Channel

BBC1 SD+HD BBC2 ITV 1 SD+HD C4 C4 +1 Five Others (inc. Bfast)

2010 20.8 6.9 17 6.2 0.8 4.5 43.7 2011 20.2 6.1 12.9 5.3 n/a 4.7 50.8

The DTT and Multichannel experience of the public broadcasters in the UK

Source: www.barb.co.uk

http://www.barb.co.uk/

SABC1 and 3 doubled the proportion of channel ratings that they

attract via the Dstv platform over 4 years. But the number of

channels available on pay platforms is fragmenting audiences

Source: Saarf TAMS

0

10

20

30

SAB

C 1

e.tv

SAB

C 2

SAB

C 3

Afr

ica

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ic M

ovi

es

kykN

ET

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…

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zu

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Dis

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Sup

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4

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tars

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e

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ent

Dis

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Ch

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el

24

.4

18

.1

16

.6

12

.0

1.9

1.5

1.3

1.0

0.9

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.6

0.6

0.5

0.5

0.5

0.5

0.5

0.4

0.4

0.4

0.4

0.4

TOP 30 TELEVISION CHANNEL SHARE (Nationally) PEFORMANCE PERIOD (05:00-23:00 Mon-Sun)

Average 1-18 October 2012 Adults (15+)

Source: Saarf TAMS

110 Dstv Channels, most of which do not deliver even 0.1 AR

Viewed individually, DSTV’s multitude of channels do not come anywhere close to the FTA channels ARs, most of which deliver less than 0.5 AR

110 Dstv Channels, most of which do not deliver even 0.1 AR

0

10

20

30

SAB

C 2

SAB

C 3

e.tv

SAB

C 1

kykN

ET

Afr

ica

Mag

ic…

M-N

et A

ctio

n

M-N

et

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ort

1

Sup

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ort

2

Un

iver

sal…

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dio

Un

iver

sal

Dis

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D

Vu

zu

Dis

ney

Ju

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r

Car

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ork

Mza

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Ch

ann

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Top

TV

Trac

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Sup

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ort

3

eNC

A (

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M-N

et S

tars

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C L

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tyle

BB

C E

nte

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nm

ent

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ney

Ch

ann

el

M-N

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lus

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ort

4

M-N

et S

erie

s

M-N

et M

ovi

es…

14

.7

12

.3

11

.7

11

.4

3.2

2.5

2.2

2.0

1.5

1.4

1.3

1.2

1.2

1.1

1.1

1.0

1.0

1.0

0.9

0.9

0.8

0.8

0.8

0.8

0.8

0.8

0.8

0.7

0.7

0.7

TOP 30 TELEVISION CHANNEL SHARE (Nationally) PEFORMANCE PERIOD (05:00-23:00 Mon-Sun)

Average 1-18 October 2012 LSM 7-10 Adults (15+)

The Battle for Share of Audience • TAMS in August 2012 shows that the entire SABC TV portfolio met its all day share (and Government

Guarantee) target of 60% in only 3 instances across 7 days of television:

– on weekday mornings when Isidingo and Generations are repeated on SABC1

between 19h30 and 21h00 when SABC1‟s key properties – News, Generations and local dramas - are on air.

• All of these instances are driven by one channel – SABC1 and this has been the trend for some time before

August 2012.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

05

h0

0

06

h0

0

07

h0

0

08

h0

0

09

h0

0

10

h0

0

11

h0

0

12

h0

0

13

h0

0

14

h0

0

15

h0

0

16

h0

0

17

h0

0

18

h0

0

19

h0

0

2h

00

0

21

h0

0

22

h0

0

Sa

t

05

h3

0

06

h3

0

07

h3

0

08

h3

0

09

h3

0

10

h3

0

11

h3

0

12

h3

0

13

h3

0

14

h3

0

15

h3

0

16

h3

0

17

h3

0

18

h3

0

19

h3

0

20

h3

0

21

h3

0

22

h3

0

05

h0

0

06

h0

0

07

h0

0

08

h0

0

09

h0

0

10

h0

0

11

h0

0

12

h0

0

13

h0

0

14

h0

0

15

h0

0

16

h0

0

17

h0

0

18

h0

0

19

h0

0

2h

00

0

21

h0

0

22

h0

0

SABC1 SABC2 SABC3 e.tv Mnet TopTV DStv

Source: Saarf TAMS August 2012

The Battle for Share of Audience

• The prime time share target of 65% is met in only the Generations and local SABC1 drama slots on weekdays (20h00-21h00); and it is met again in the Saturday 18h30-20h00 half-hour slots.

• This is the net sum of the public broadcaster’s three channel schedules towards prime time share of ratings target of 65%.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

05h

00

06h

00

07h

00

08h

00

09h

00

10h

00

11h

00

12h

00

13h

00

14h

00

15h

00

16h

00

17h

00

18h

00

19h

00

2h

000

21h

00

22h

00

Sa

t

05h

30

06h

30

07h

30

08h

30

09h

30

10h

30

11h

30

12h

30

13h

30

14h

30

15h

30

16h

30

17h

30

18h

30

19h

30

20h

30

21h

30

22h

30

05h

00

06h

00

07h

00

08h

00

09h

00

10h

00

11h

00

12h

00

13h

00

14h

00

15h

00

16h

00

17h

00

18h

00

19h

00

2h

000

21h

00

22h

00

SABC1 SABC2 SABC3 e.tv Mnet TopTV DStv

65

Source: Saarf TAMS August 2012


4 Alignment to DOC Priorities

118

Alignment to DOC Priorities DOC Strategic

Priorities

SABC Alignment FY13/14 FY14/15 FY15/16

ICT Policy

Review

Motivate and drive key

policy reviews that affect

the SABC‟s ability to

compete within changing

broadcasting landscape

Drive amendments to Must

Carry Regulations; DTT

channel licencing; SABC

Funding model

Implement amendments

and new funding model

Implement and monitor

E-Skills

Develop staff and content

supplier DTT technical

skills

Align content development

to enable e-skills training

Create collaborations with

e-skills providers

Implement appropriate

training programmes

Develop e-skills education

content for broadcast and

e-learning initiatives

Continuous development

of new entrants

Broadcast/ distribute

content


of new entrants

Broadcast/distribute

content

Broadband

Enable access to

broadband connectivity and

appropriate content through

set top box as part of e-

learning via internet access

and interactive education

content

Develop multi-play-out

capability to suit varied

access formats.

Collaborate with content

suppliers in appropriate

content development

Broadcast education and

information content to

encourage public

participation in e-skills

based education;

Test access via set top

boxes to closed user

group and deal with

glitches.

Implement go-live

awareness programmes

on availability of content

via SABC websites.

Go-live with on-demand

access to SABC web-

streamed content via set-

top boxes

119

Alignment to DOC Priorities

DOC Strategic

Priorities


Broadcast

Digital

Migration

Launch of SABC

services on DTT

(Dependent on available

funding.

Migrate existing 3 TV

channels and 19 radio

stations on DTT

platforms with improved

capability to compete

against current and

emerging channels

Develop PPP‟s within

National treasury and

Regulatory framework

and launch one PPP

channel.

Subject to funding

availability, launch

News and Sports

channels.

Add two (2) PPP-

based channels

Monitor capability and

financial performance.

Plan new PBS

channels (Education,

Health) on basis of

success of existing

ones.

No strategic initiatives

planned

A full Digital Playout-

centre for all SABC

Channels, completed by

FY2014 (digital

broadcast and

production studios )

100% Infrastructure

readiness

DTT platform feature

enhancements.


enhancements

120


DOC Strategic

Priorities


Postbank

Create banking/ savings

culture education content

in collaboration with

Postbank

Broadcast Postbank

education content (depends

on Bank funding availability)

Continue with savings

culture/why Postbank

drive

Continue

Rural

Connectivity

Increase the TV footprint to

100% by FY 15/16 through

84% coverage through

DTT, and

16% coverage through

DTH

28% DTT

5.3% DTH

64% DTT

12% DTH

84% DTT

16% DTH

Increase radio footprint to

100% by FY 15/16 via DTT

100% DTT

100% DTT

100% DTT

Cost to

Communicate

TV Licence fees at

reasonable rate (R250 +

6% increases every 2

years).

Access sponsored and

full funding for poor and

indigent licence holders

Increase licence fee by 6%

to R265.00

100% government funding

Maintain fee at R265.00

Access 100% funding

Increase fee by 6% to

R280.00

121


DOC Strategic

Priorities


Community

Broadcasting

Maintain 0.2% contribution

of SABC gross revenue to

MDDA for Community

Broadcasting development.

0.2% grant to MDDA

0.2% grant to MDDA

0.2% grant to MDDA

Radio

Frequency

Spectrum

Increase radio

footprint to 100% by

FY 15/16 via DTT

Implement current

available radio

spectrum for

terrestrial radio

100% DTT

Complete assessment

of priority stations and

implement

100% DTT

Continue

implementation

100% DTT

Continue

implementation

Local Digital

Content

Digitisation of SABC

Content archives for

DTT platforms

20% 50% 100%

Regional infrastructure

development for local

production industries,

enable participation

beyond the main

metropolitan areas of

Johannesburg, Durban and

Cape Town.

Dependent on feasibility

studies funding availability

,1 provincial production built

Dependent on funding

availability, additional 3

provincial studios built

and initial 3 brought to

operations

New studio requirements

business plans and

funding requests

completed 5


5 KPI’s: MTEF 14 - 16

SABC Strategic Goals

123

In the context of the current environment and meeting the requirements of

public broadcasting in a multi-channel environment, the Board of the SABC

defined the following goals:

1. Putting Broadcasting and Broadcasters back in the

forefront of what the organisation is about;

2. Bringing Editorial integrity back into the platforms, programming

and content, with a particular focus on News and Current Affairs;

3. Having an operating model that is simple and easily understood,

supported by an organisational design that assigns accountability

directly to those charged with execution of the Enterprise plans and

good governance;

124

These goals have been used as the basis of defining the Corporate KPAs –

which are at the heart of the 2014-16 Corporate Plan

4. Building an organisation that is economical, efficient and effective;

5. Focusing on the performance of the organisation at every level and

holding individuals accountable for delivery;

6. Building the digital SABC and integrating the digital future into all

plans and actions; and

7. Managing and reporting on strategy development and

implementation, operational performance and risk management.

SABC Strategic Goals

125

Key Performance Indicators: 2014-16

STRATEGIC OBJECTIVES

KEY PERFORMANCE

INDICATORS – FY 2013 –

FY 2016

KEY PERFORMANCE TARGETS: FY 2013 - 2016

FY13/14 FY14/15 FY15/16

KEY PERFORMANCE AREAS: STRATEGIC GOAL 1 :PUTTING BROADCASTING AT THE FOREFRONT (AUDIENCE ATTRACTION

AND RETENTION)

Managing the attrition of the

SABC audience share against

set targets.

SABC TV Audience

Share, All Adults in

Performance Period

53% 54% 55%

SABC Radio Audience

Share

67% 67% 67%

DTT migration and New

Service Rollout

(Funding Dependent)

Migrate existing SABC

Television channels on to

the Digital Terrestrial

Platform.

Migrate SABC 1,

SABC 2 and SABC 3

on to DTT Platforms.

Launch Sport and News

channels, subject to

availability of funding.

Monitor Audience and

financial performance.

Plan new PBS

(Education, Health)

channels on the basis

of the success of

existing ones.

Launch New SABC DTT

TV Channels

Launch 1 PPP/PCS

model channel + fully

funded Parliamentary

channel

Add 2 PPP Channels +

maintain Parliamentary

channel

Maintain as per

FY2014/15

126



KEY PERFORMANCE

INDICATORS – FY 2013 – FY

2016


FY13/14 FY14/15 FY15/16

KEY PERFORMANCE AREAS: STRATEGIC GOAL 1 :PUTTING BROADCASTING AT THE FOREFRONT (AUDIENCE ATTRACTION AND

RETENTION)

DTT migration and New

Service Rollout

(Funding Dependent)

Migrate existing Radio

services and launch

additional services.

Migrate a total of 19

existing SABC Radio

Channels on DTT

Maintain 19 Radio

Stations on DTT.

A total of 4 new Radio

Channels on DTT

Motivate and drive key policy

reviews that affect the

SABC‟s ability to compete

within the changing

broadcasting landscape.

An ICT Policy that enables

the SABC to compete.

Drive amendments to

Must Carry

regulations, DTT

channel licensing and

SABC Funding Model

Implement amendments

and new funding model.

Implement and monitor

Restoring the integrity of the

SABC Brand and Reputation

Improve overall SABC

brand positioning and

equity aligned to corporate

vision and plan

Obtain a brand health

composite score of 2

Maintain brand health at

a score of 2.5

Maintain brand health at

a score of 3

Drive the marketing of

SABCs DTT rollout

Develop platform Brand

Identity and launch

effective campaigns to

create awareness of DTT

platform

Launch national

Through-the-Line

campaign for SABC

DTT channels while

simultaneously

promoting DTT/Brand

platform

Launch national Through-

the-Line campaign for

additional SABC DTT

channels

Launch national Through-

the-Line campaign for

additional SABC DTT

channels

127



KEY PERFORMANCE


2016


FY13/14 FY14/15 FY15/16

KEY PERFORMANCE AREAS: STRATEGIC GOAL 1 PUTTING BROADCASTING TO THE FOREFRONT (STAKEHOLDER MANAGEMENT)

To create a positive link

between SABC, stakeholders,

audiences and communities at

large

Engagement of

stakeholders to enhance

business processes

Define and implement

a coherent

stakeholder plan that

is measured against

the outcomes of a

perception survey

Redefine outputs based

on 13/14 perception

survey outputs and

measure effectiveness of

implementation against

2nd survey

Redefine outputs based

on 14/15 perception

survey outputs and

measure effectiveness of

implementation against

3rd survey

KEY PERFORMANCE AREAS: STRATEGIC GOAL 2 BRINGING EDITIORIAL INTEGRITY BACK (NEWS AND CURRENT AFFAIRS)

National and Local

Government Elections

To provide balanced,

accurate and relevant

coverage of the National

and Local Government

elections and to broadcast

the results of those

elections

• Develop the

broadcast plans for

the national

elections and

secure budget

• Commence with

pre-election

programming.

Broadcast coverage of

the elections meeting

regulatory and legislated

requirements.

Prepare for Local

Government Election.

Broadcast the local

government elections.

128



KEY PERFORMANCE


2016


FY13/14 FY14/15 FY15/16

KEY PERFORMANCE AREAS: STRATGIC GOAL 4 ECONOMICAL, EFFICIENT & EFFECTIVE (REVENUE ENHANCEMENT)

Restoring SABC liquidity

status to that of going

concern

Total SABC Financial

Revenue achieved per

annum

R6. 040bn R6. 097bn R6. 292bn

Classical Advertising

Revenue

R4. 238bn R4. 316bn R 4. 472bn

Sponsorship Revenue R420m R392m R404m

TV License Revenue R941m R969m R997m

Other Revenue including

Government Grants.

R442m R420m R419m

129



KEY PERFORMANCE

INDICATORS – FY 2013 –

FY 2016


FY13/14 FY14/15 FY15/16

KEY PERFORMANCE AREAS: STRATGIC GOAL 4 ECONOMICAL, EFFICIENT & EFFECTIVE (COST MANAGEMENT)

Reduce Organisational Costs

Cost Effective and Efficient

Organisation

R5. 541bn R5. 944bn R6. 092bn

Headcount management

Maintain the current

headcount of 3654 staff.

Determine optimal

organizational skills and

headcount incorporating

envisioned DTT operating

Model.

Instill a performance

management culture across

all levels within the

organization.

Maintain headcount

against established targets.

Performance management

across all levels within the

organization.

Maintain headcount

against established targets

Performance management

across all levels within the

organization.

130


STRATEGIC

OBJECTIVES

KEY PERFORMANCE

INDICATORS – FY 2013

– FY 2016


FY13/14 FY14/15 FY15/16

KEY PERFORMANCE AREAS: STRATGIC GOAL 4 ECONOMICAL, EFFICIENT & EFFECTIVE

(COST MANAGEMENT)

Reduce Organisational

Costs

Leave liability reduction by

reduction in the quantum of

leave days accumulated

across the organization of

140 130 days (Feb 2013)

20% 5% 5%

Overtime reduction 10%

10% 10%

131


STRATEGIC

OBJECTIVES

KEY PERFORMANCE

INDICATORS – FY 2013

– FY 2016


FY13/14 FY14/15 FY15/16

KEY PERFORMANCE AREAS: STRATEGIC GOAL 3 AN EASILY UNDERSTOOD OPERATING

MODEL SUPPORTED BY APPROPRIATE OD

Operating Model and

Organisational Design

that assigns

accountability to those

charges with execution

Efficient organisation Align the SABC

Operating model and

organizational

structure with the

requirements of

efficient DTT

Operations.

Monitor and review

organizational

efficiencies and effect

improvements where

required.

Monitor and review

organizational

efficiencies and effect

improvements where

required.

An efficient organisation

that is able to be

supported by adequate

skills to effectively

implement DTT

Operations

Develop staff and content

supplier DTT skills;

Align content development to

enable eskills training,

Collaborate with eskills

providers

Implement appropriate

training programmes.

Develop eskills

education content for

broadcast and

eLearning initiatives


of new entrants

Broadcast or distribute

content


of new entrants

Broadcast or distribute

content

132



KEY PERFORMANCE


2016


FY13/14 FY14/15 FY15/16

KEY PERFORMANCE AREAS: STRATEGIC GOAL 6 BUILDING A DIGITAL SABC (ENHANCED PUBLIC SERVICE)

Universal Access -

increase rollout of

service delivery through

cost effective modern

digital technologies

(Funding Dependent)

SABC broadcast

Infrastructure(digital

broadcast and production

studios) ready to carry full

complement of 12 TV

channels and 19 radio

services on standby for

launch

100% Infrastructure

readiness


enhancements.


enhancements

133



KEY PERFORMANCE


2016


FY13/14 FY14/15 FY15/16


Universal Access -

increase rollout of service

delivery through cost

effective modern digital

technologies (Funding

Dependent)

Geographical

Universal

access

Increase the

TV footprint to

100% by

FY15/16

through:

84% coverage

through DTT

and 16%

Coverage

through DTH

28% DTT

5.3% DTH

64% DTT

12% DTH

84% DTT

16% DTH

Increase Radio

footprint to

100% by

FY15/16 via

DTT

100% DTT 100% DTT 100% DTT

134



KEY PERFORMANCE


2016


FY13/14 FY14/15 FY15/16


Universal Access - increase

rollout of service delivery

through cost effective

modern digital technologies

(Funding Dependent)

A sustainable Internet Protocol

Portfolio

Implement an approved

New Media Policy.

Monitoring and Review Monitoring and Review

Mobile broadcasting (Radio, TV):

Launch of digital mobile

broadcasting (With existing

Services)

Develop a Mobile

broadcast strategy.

Project consolidation Launch

Enable access to broadband

connectivity and appropriate

content through the Set Top Box

as part of e-learning via internet

access and interactive

educational content.

Develop multi-playout

capability to suit varied

access formats,

Collaborate with

content suppliers in

appropriate content

development

Broadcast education and

information content to

encourage public

participation in e-skills

based education;

Test access via set top

boxes to closed user group

and deal with glitches.

Implement go-live

awareness programmes on

availability of content via

SABC websites.

Go-live with on-demand

access to SABC web-

streamed content via set-

top boxes

135



KEY PERFORMANCE


2016


FY13/14 FY14/15 FY15/16

KEY PERFORMANCE AREAS: STRATEGIC GOAL 7 – IMPROVED GOVERNANCE AND RISK MANAGEMENT (GOVERNANCE)

Embedding Risk management

into the day to day operations

of the Corporation

Enterprise-wide operations and

unit business decision processes,

general management activities

backed by risk management

analysis and mitigations.

Roll out CURA Enterprise

Risk Management

software training to all

divisions, provinces and

units to enable

compliance.

Divisional Risk

management staff to

undertake international

best practice training.

New staff trained on CURA,

existing staff refreshed

annually.

Divisional Risk management

staff to undertake refresher

courses on international best

practice

New staff trained on CURA,

existing staff refreshed

annually.

Divisional Risk

management staff to

undertake refresher courses

on international best practice

136



KEY PERFORMANCE


2016


FY13/14 FY14/15 FY15/16

KEY PERFORMANCE AREAS: STRATEGIC GOAL 7 – IMPROVED GOVERNANCE AND RISK MANAGEMENT (GOVERNANCE)

Embedding Risk management

into the day to day operations

of the Corporation

Enterprise-wide operations and

unit business decision processes,

general management activities

backed by risk management

analysis and mitigations.

Monitor implementation

through strategic and

operational risk reports

tabled monthly at

divisional and Group

Executive levels.

Board monitoring applied

through quarterly Risk

subcommittee meetings

Continuous monitoring

through reports tabled at

monthly Group Executive

meetings, and quarterly

Board meetings.

Continuous monitoring

through reports tabled at

monthly Group Executive

meetings, and quarterly

Board meetings.

An improved organizational

internal control environment

The number of significant internal

audit findings

20% of all audit findings 10% of all audit findings 5% of all audit findings


6 The FY13/14 BUDGET

QUESTIONS & ANSWERS


THANK YOU

Third Quarter Report - Amazon Web Servicespmg-assets.s3-website-eu-west-1.amazonaws.com/130423sabc.pdf · Third Quarter Report FY 12/13 PCC 23rd April 2013 April 2013 . VISION Broadcasting

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