Presentation to Parliamentary Portfolio Committee on Communications 13 August 2002

Presentation to

Parliamentary Portfolio Committee on Communications

13 August 2002

Chairman’s Introduction (1 of 4)

• The issues raised by the Committee in October– policy

• editorial policy• language• scheduling of programmes• programme offering and mix

– news restructuring– universal access– employment equity

• Progress on these issues and will be discussed in the presentation

SABC Presentation to Parliament Portfolio Committee of Communication 13 August 2002

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• Complete the corporatisation process

– SABC

– Bop/Channel Africa

– CKI

• Realign the structure

• Develop a three-year strategic plan

– Corporate

– Business unit

• Begin implementing the plan

• Review our current policies

In the presentation to Parliament in October 2001, we committed to six areas of focus .

Implementing Act


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Chairman’s Introduction (2 of 4)

Chairman’s Introduction (3 of 4)• Over the last year we’ve grown in stature, experience and spirit

• A number of notable milestones

• programming

• news & CA

• sport (e.g. commonwealth games)

• corporatisation

• reaching out to the community

• financial

• human capital

• institutional memory must be created


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Chairman’s Introduction (4 of 4)• Signposts pointing us in the right direction

– policy– financial management– human performance

• Clear focus on building institution and establishing institutional memory

• Firmly believe on the right pathway

• Demand for more and varied services is a fact of life

• Continuous process of change and improvement


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Chief Executive’s Introduction

• Turbulence globally and nationally in the media environment

– financial strain for most media companies

– rising cost of content and technology

– advertising & marketing industry stagnant

– bankruptcies & retrenchments locally and internationally


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Chief Executive’s Introduction

• Legislative & Regulatory Environment– continuing challenges in implementing the Act and ensuring a

stable and sustainable organisation– legislative and regulatory change leading to increased cost

• Industry has to be an efficient producer because revenues are constrained

• Look at how we manage costs whilst ensuring delivery of quality programming


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Progress Against CommitmentsSignificant progress has been made against objectives presented in October.

• Corporatisation

• Realignment of Structure

• Three Year Strategy

• Implementation of Strategy

• Policy Review

• Technology Plan


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• Effectively fulfill our mandate as the public service broadcaster– increase local language content in PBS TV– expand our transmission coverage– encourage nation building and democratic ideals

• Be the home for talent that delivers – attract, retain and develop the best creative and other talent in

South Africa– Identify, develop, secure and exploit the best content available in

the marketplace

• Reward excellence

• Ensure that both financial and socioeconomic returns are achieved

Strategic Intent


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• Finalise Corporatisation

• Deliver on aims of Universal Service

• Local content plan

• Audience Growth

Key Goals & Objectives FY 02/03


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• Financial

• Technology Plan

• Review Policies

• Regional Approach

• Human Capital

Other HighlightsSignificant progress has been made in other areas as well.

• Universal Access

• Education

• Governance and Financial

• African Renaissance and Community Development

• Health

• Skills Development & Employment Equity


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Chief Executive’s Summary

• The SABC has made significant progress

• Board and Management remain committed to implementing the Act

• Clear goals, objectives and timeframes have been developed to achieve this.

• The organisation will remain in a building phase for the next 12 to 24 months.

• The complete turnaround of the SABC is likely to take 3-4 years


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Programming Chairperson: TV & Radio

• After the first phase of building the SABC the Board has focused on a review of content policies and processes

– diversity

– language

– regional programming

– religion

• Core programming and policy issues have been or are being addressed

– comprehensive programming and scheduling strategy review has been completed

– a complete review of commissioning and other procedures and policies is currently underway

– a similar review process in PBS radio initiated


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Programming Chairperson: TV & Radio

• Core programming and policy issues have been or are being addressed (continued)– process to establish a content hub underway– review of religious programming policy– language workshop scheduled for November

• A number of notable programming achievements across both platforms– Health– Education– Investigative reporting– Dramas– Sport


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TV

Production Industry Highlights

• The SABC is the largest single investor in the development & growth of the local production industry

• Nearly three quarters of a billion Rand was spent on local content in the past year

• R390 million is directly injected in the independent production sector in the last fiscal year

• Over 143 different production companies have been commissioned

• 57% of the spend went to production companies with Black ownership


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Programming: TV Overview

• Programming and scheduling strategy review completed

• This has led to the revamp of our programming approach and delivery across all channels

• Benefits of changes in schedule will take place over a year

• Programming highlights– increasing language delivery – adding news and current affairs in various languages– more local content– increasing delivery of public service mandate


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TV Content: Key Objectives

• Contribute to nation building

• Align budgets to strategy

Mandate

Costs & Revenues

• Audience retention across

channels

Audiences

• Sound business practice in

commissioning

Industry Development


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TV Content: Approach to Mandate

• Address wide SA audience and retain leading position

• Provide a diverse mix of programmes in different languages

• Comply with local content quotas,

• Promote Nation building, democracy and development

• Deliver the mandate in a sustainable way

PCBS Channel

• Complies with its legislated public service obligations whilst optimising its profitability.

• Promotes the overall ethos and values of the SABC.

PBS Channels


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TV Content: Channel Positions

From youth channel to Youthful PBS


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Family Viewing for the Nation

Upmarket & Inclusive

Programme Commissioning & Acquisition

• The Corporation is consulting with Independent Producers and other stakeholders to review commissioning procedures

• Ensure fairness, transparency and accountability

• Develop long-term planning cycles & strategy for content acquisition

• Develop SABC’s strategic plan to contribute systematically to empowerment and development in the local production industry

• Increase flexibility and efficiency in commissioning


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Programming: PBS Radio

PBS Radio Strategy Overview

• SABC’s 11 PBS radio stations provide services to over 90% of South Africans in all of the official languages.

• The PBS radio stations play a critical role in supporting development in the country, providing information and education and supporting indigenous music and culture.

• However, if they are to fully realise their public service objectives, the PBS Radio portfolio requires new investment and upgrading in a number of areas

• A complete process to do this in a systematic and pragmatic way has begun


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PBS Radio Strategy Objectives

• Improve programming and scheduling on PBS station

• Improve brand recognition of PBS portfolio

• Extract revenue potential of PBS radio stations


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PBS Radio Strategic Focus Areas

• Standardise on-air schedules across all language stations, to reflect conventional day parts.

• Increase investment in programme quality (e.g. in drama and education)

• Improve management and production skills within the portfolio

• Continue to brand PBS stations as unique and independent entities to the consumer.


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Programming: News

News Programming Chairperson (1 of 2)

• National broadcaster is charged with protecting norms, values and aspirations of nation

• Reflect the diversity of national character

• News worthiness & credibility

• Unlike purely commercial operators we are not purely bottom line driven

• The Corporation’s news product plays a critical role in keeping the nation informed and encouraging debate


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News Programming Chairperson (2 of 2)

• SABC News is on a path of transforming itself into a world class broadcaster alongside other major international broadcasters.

• Recent initiatives of the News Renewal process are already beginning to bear fruit

• Over the course of last year the News Division received thirty-two international awards

• SABC Africa is now on SABC 2 giving millions of South Africans access to News that was previously inaccessible to them

• Board has initiated a process to review the news policies


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News Renewal Progress (1 of 2)


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• Morning Live & 20:00 News

• New Studio Set

• On-Air Look

• Elimination of technical errors

• Leadership & Staffing Issues

Progress

High= Low=

News Renewal Progress (2 of 2)


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• Improving Editorial Quality

• Dismantle Bi-media

• Review Structures and Reduce Bureaucracy

• Training & Development

• Marketing

Progress

High= Low=

Policy Review Background

• In line with our mandate and in the pursuit of excellence an audit and review of editorial and programming policies is under way

• The initial focus is on developing key values and principles

• The process will be completed by 30 November 2002


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Policy Review: Scope of Review

• Editorial Responsibility

• International Broadcasting Services

• News, Current Affairs and Information

• Languages in South African Broadcasting

• The Arts and Culture

• Education

No fewer than 12 policies will be reviewed and developed.

• Sports programming

• Programme Standards

• Programme Complaints

• Political and Election Broadcasts

• Public Service Announcements, and Fundraising and Aid Appeals

• Advertising Standards and Practices


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HR


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HR Chairperson Overview• New leadership

• Organogram

• Performance Management– National Mandate priorities– Growth and Financial Health– Innovation & Customer– Operations and Process Control– People & Success Behaviours

• Retention Strategy

• Leadership development

• Focusing on delivery

• (top level graph)

Audit Committee Chairperson (1 of 2)

• The organisation remains financially sound and stable, despite tough trading conditions

• Since October focus has been on developing world class financial systems and processes

• New auditors have been appointed

• Internal Audit has been co-sourced

• Treasury capacity has been significantly bolstered


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• Going forward, emphasis will be placed on the following:

– Financial realignment in accordance with the Act

– Ongoing development of world class financial systems and processes

– Financial discipline enhanced


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Audit Committee Chairperson (2 of 2)

Key Financial Objectives


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• Strategic Financial Planning

• Financial Process & Internal Control

• Asset Management

• Group Risk Management

Progress

High= Low=

Conclusion• Over the coming months, our efforts will focus firmly on:

– Fully implementing the Act (including corporatisation, structural and financial realignment)

– Focusing on improving content– Implementing short and medium term strategies that will ensure

the long-term success of the Corporation– Reviewing and amending current policies as necessary

• Board & management remain committed to improving the Corporation and ensuring that it continues to play an important and relevant role in society

• We will continue to work with the Parliament and other stakeholders to ensure that this takes place


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Appendix


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• A number of initiatives launched to improve environment and quality of leadership

– climate survey

– gender & disability initiatives

– leadership workshops led by CEO

• Organisation doing well on overall demographic equity

• Key challenge remains to strengthen representation in middle management and technical areas


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Human Resources

Linking Organisational Objectives to Individual Performance


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REWARD CAREER PATHING

SABC vision, performance dimensions, strategic objectives & performance measures

BU/ Divisional strategic objectives, & performance measures

Individual KPA’s & KPI’s

PERFORMANCEPERFORMANCE

Example of Performance Tool

SABC: GCEO2003/2004

Performance Criteria Measure Target Weight

1 2 3 4 5 N/A

TV 2%

Radio 2%

Revenue 9.70% 2%

Advertising sales 5% 3%

TV licences 5% 4%

TV 1%

Radio 1%

Limit expenses growth 9.70% 1%

Profitability (EVA/ROI) 1%

Total 17%

Performance Criteria Measure Target Weight

1 2 3 4 5 N/A

TV Transmitters 2 Million 2%

Simulcasting % 3%

Radio AL C/Affairs 1%

TV AL C/Affairs 1%

ICASA 1%

Radio AL C/Affairs 2%

TV AL C/Affairs 3%

Corporatisation SABC, CKI, BOP completed 2%

TV 1%

Production/Commissioning 1%

Radio 2%

Production/Commissioning 1%

Total 20%

Achievement

Affordable Universal Access

Increased local content

Increased language coverage

BEE & SME development

Achievement

Increased market share (TV & radio) in SA

Increased & new revenue streams

Increased market share in Africa

Print

Progress Against Commitments (1 of 2)Significant progress has been made against objectives presented in October.

• SABC– All internally driven

processes completed– Issues on draft Bill being

addressed• BOP/Channel Africa

– Interim management team to be put in place

– Options awaiting input and approval from Minister

• CKI– Feasibility study report

completed – Way forward decision to

be taken by DoC

Corporatisation Realignment of Structure

• Appointment of leadership team & other key appointments made in line with this new structure

• Only one senior appointment outstanding

Develop 3 Year Strategy

• 3- year strategies have been developed for all business units and for the corporation

• Significant organisational learning took place


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Progress Against Commitments (2 of 2)

• All business units have begun implementing strategies

• Quarterly monitoring process initiated to monitor progress against strategy implementation

• New Performance Management system to reward delivery in development

Implementation of Strategy Policy Review

• Separate unit created to deal with policy review and development

• Sixteen policy areas have been identified to be reviewed and developed

Investigate Technology Options

• A third party has been appointed to assist the Technology division with the development of a technology plan


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Selected Key Highlights (1 of 3)

• Budgeted targets achieved• Financial realignment

process well underway with the development of a strategic financial model, funding model and a transfer pricing model to be completed within next three months

Governance/Financial Education

• School TV provided sustainable and affordable curriculum-based multimedia learning resources in 7 languages

• Yizo Yizo 2: 80% of viewers surveyed said series made it easier for parents to discuss difficult issues with their children

• Takalani Sesame extended learning opportunities to pre-schoolers

• SABC Education won numerous prestigious international and local awards

In addition, significant progress has been made in other areas.

• Number of South Africans without access cut significantly

• PBS radio stations were brought to nearly 2 million additional South Africans

• Application lodged with ICASA to bring SABC 1 & SABC 2 to additional 2 million South Africans

Universal Access


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Selected Key Highlights (2 of 3)

African Renaissance & Community Development

• Appointed as Host Broadcaster for World Summit on Sustainable Development

• Supported NEPAD via event sponsorship and news coverage

• Partnered Sowetan and Old Mutual in annual Community Builder of the Year

• Promoted wider social and community projects through Public Service Announcements using approximately R20 million of airtime

• The SABC continued to use its radio and TV stations to inform and educate the South African public on issues of health, particularly as these relate to HIV/AIDS and STDS

• Love Life partnership ongoing

• Internal prevalence survey launched

• Public Service Announcements focused on TB

Health

• Skills Development

– 2,000 staff have gone through training.

– Relationships forged with community-based organisations (e.g. Westbury Community Center)

• Employment Equity

– Black staff increased to 58% from 56%

– women comprise 40% of total staff (up from 37%)

– increased employment with people with disabilities

Skills Development and Employment Equity


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Programming: TV Overview• Scheduling and process

• Benefits of changes in schedule will take place over a year’s time

• programming Highlights (cut down)– Education

• School TV, Yizo Yizo II– Sport

• Commonwealth Games, ICC World Cup– Drama

• Generations– Investigative

• Special Assignment– Other

• AU Summit , SABC Africa launched on SABC 2, Youth Debate with President


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TV Content: Key Objectives

• Comply with Charter in the Broadcasting Act

• Comply with Local Content Regulations

• Increase delivery in key public service areas

• Contribute to Nation Building

• Be responsive to the needs of the public

• Align budgets to strategy

• Improve cost management efficiency

• Grow advertising revenue

• Close gap between audiences and ad

revenue

• Increase non-commercial funding

Mandate

Costs & Revenues

• Maintain leadership

• Grow audience share in different day-parts

• Cultivate new audiences

• Retain audiences within the SABC channels

• Offer audiences choice and variety

Audiences

• Creating opportunities• Empowerment• Skills development

• Sound business practice in commissioning• International partnerships and profile

Industry Development


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TV Content: Approach to Public Service Delivery

• In tune with SABC corporate goals• Market driven approach

• Support societal institutions• Support national campaigns, events and

days…

Address National Priorities

• South African with a global view• In tune with SABC corporate goals

• Reflect & address diversity across programming

• Develop shared national consciousness • Address diverse audiences/needs

Diversity & Nation-building

• Comply with quotas• Contribute to industry development

and empowerment

• Comply with quotas• Contribute to industry development and

empowerment

Local Content

• As prescribed by license and/or based on commercial objectives

• Range of genre & public service areas• On basis of comprehension & audience

availability• Promote inclusion and cross-over

Language

• Driven by audience needs and interests / image requirements and license requirements

• Ensure diverse mix in line with public broadcasting charter and ICASA regulations

programming mix

PCBS ApproachPBS ApproachMandate Area


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PBS Channels - SABC 1 Highlights• The channel will increase the use of African languages

• in dramas• current affairss programmes and short news bulletins in Swati & Ndebele in October

2002• childrens ’ programming

• Increase the social content of dramas this will include the increas of use of educational drama. In addition, Generations will deal with at least four issues of national importance per annum

• Increasing social reality programming including new local documentary strands commenced in April 2002

• Subtitling-dramas in African languages will be subtitled into English

• Multi-faith programming providing a platform for dialogue about ethics, morals and values which will start in April 2003

• Increasing educational offering to support youth development


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PBS Channels - SABC 2 Highlights

• Clear and distinct editorial line– Family values as the common denominator of all programmes,– Strengthening social ties beyond cultural and social divides: unity

while acknowledging and reflecting diversity, nation building – Proudly South African,– Responsible, trustworthy, safe and stable

• Increase in output spread and representation in Sotho, Venda & Tsonga languages

– percentage of Sotho and Venda up 4% in current fiscal

• Maintain and strengthen the channel offering in education, childrens ’, religion and coverage of Parliament


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PCBS Channel - SABC 3 Highlights

• Clear and distinct editorial line (i.e. Current, new informative, insightful, eventful and trendy)

• Broadcast of high profile local and international events

• Building on the channel ’s strengths in Comedy and Reality programming

• Maintain channel ’s excellence in documentary and current affairs

• Strengthen the channel’s offering of business programming

• Maintain substantial contribution to formal education

• Increase quality of local content, entrenching the South African idenitity of the channel


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Programming Policy & Procedures

• Ensure full compliance with mandate and local content quotas

• Implement strategies to enhance quality, public service delivery and competitiveness across programming

• Develop complementary scheduling strategies to enhance competitiveness and public service

• Improve and enhance internal business processes and human capacity to manage programming and scheduling

• Contribute to economic development, skills development and equity in the local production industry


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Summary of Trading Conditions

• Advertising Market Conditions– Local and international advertising market remains in a slump and negative growth expected in the

coming year.– Declining revenue market share in 2001 for SABC Television (3.4%) and Radio (4.5%)*– New competitors continue to erode audience share in TV and radio

• Economic Conditions– Economic conditions are currently depressed– Although rand in recovery phase currently, it is unlikely to reach early 2001 levels (R7.83 = 1 US Dollar**)– Interest rate increases impact on disposable income of consumers

• Regulatory Conditions– Market could become more competitive as ICASA reviews secondary market radio licences

* May 00/April 01 to May 01/April 02

**1 January 2000

Trading conditions continue to be tough.


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Documents

Presentation to Parliamentary Portfolio Committee on Communications 13 August 2002