The South African Broadcasting Corporation (SABC) – the country’s free-to-air public broadcaster – is lobbying ICASA (the industry regulator) to limit the amount and scope of revenues that Pay-TV and subscription OTT providers can earn from advertising, infomercials and program sponsorships.
During a hearing on the regulatory regime for broadcasting revenue from advertising and other similar funding sources, the public service broadcaster made this proposal to the regulator.
ICASA released a discussion paper in March requesting a revision of the 1999 laws on advertising, infomercials, and sponsorships. All broadcast licensees must adhere to the authority’s code of conduct, governed by advertising regulations.
Luthando Mkumatela, chair of the authority’s advertising and sponsorship committee, said at the start of the hearing that with the advent of the Internet and digital streaming services like Netflix, it was clear that advertising revenue regulations needed to be updated.
Philly Moilwa, the SABC’s head of policy and regulatory affairs, said the public service broadcaster had even thinner pickings in a market where DStv and e.tv already had a more significant part of the advertising pie. “Advertisers are shifting their attention to online advertising rather than traditional television due to the rapid rise of the Internet. Advertising and sponsorships account for up to 77 per cent of the SABC’s revenue; according to Moilwa, he states that the regulator should weigh the impact of adjustment in the laws against the effects of government funds, which account for only 3 per cent of the SABC’s budget.
He suggested that subscription players need to be subjected to an advertising cap or a restriction on advertising minutes, as well as other restrictions. To ensure the survival of free-to-air channels and providers, he said the SABC needs a “watertight” advertising revenue cap for subscription services.
Advertising and sponsorships have become critical to the long-term viability of free-to-air broadcasters, according to SABC COO Ian Plaatjes, and any changes to the legislation should not be detrimental to broadcasters.
According to the regulator, the deadline for broadcasters and sponsors to submit proposals was Monday, 26 July. Hearings are expected to be completed by March 2022.