“As the SABC was extremely optimistic a year ago, we decided to set our revenue budgets based on our compounded annual growth rate. On the back of this revenue number, we planned to invest in an aggressive content-acquisition strategy and incur substantial IT and infrastructure costs for the digital migration, planned for rolling out during 2008,” said Mampone.
The SABC statement also pointed out the following:
Due to macro-economic factors and advertising industry challenges that the broadcaster faced towards the latter part of 2008, the SABC was unable to realise revenue numbers, and therefore projected a R784-million budget shortfall. This is not a loss, but a budget shortfall, and is mainly relevant to costs incurred during the current fiscal, which will benefit the SABC in the long run.
The SABC is in the process of revising its sales and sponsorship policies, which will be tested against prominent methodologies in the marketplace. However, changes will be communicated to the advertising industry in due course.
The SABC board of directors has adopted a convergence sales strategy. A decision has been taken to focus on back-office convergence, while all sales staff undergo training to upgrade skills and service levels.
Budget restrictions forced channels to review the efficiency of content investments. This, in turn, led to changes affecting schedules, rates and contracts. Budgets for the new fiscal have since been signed off by the SABC board, allowing channels to finalise schedules. The broadcaster is in the process of finalising service level- and programme performance agreements with all its platforms, allowing for enhanced AR projections, improved pricing and stable schedules.
SABC3 has since revised its programming and scheduling, to counteract declining audience share. A benchmarked CPP indexed-based pricing model has been implemented, which allows for more accurate rate prediction.
In terms of rate cards, the SABC will be reverting to monthly rate cards, released three months in advance. Printed rate card rates will be honoured. SABC TV Channels have also undertaken that at least 95% of their prime-time programmes (excluding special events) will not be compromised.
The SABC is committed to the industry and pledges their full support, in order to realise a strengthened partnership with the advertising industry.
