Legal View

Public outcry over proposed TV licences for Netflix, Showmax

Read time 5min 30sec

A public campaign on government’s draft policy on audio and audio-visual content services, run by advocacy non-profit Dear SA, has attracted nearly 20 000 comments, with the overwhelming majority rejecting the proposed introduction of TV licensing fees for video-on-demand (VOD) services.

Last month, a draft White Paper on audio and visual content services was released by the Department of Communications and Digital Technologies. It paves the way for the SABC to “delegate the collection” of the payment of TV licence fees to other persons, including Netflix, DSTV, Apple TV and other online content services, as per Section 27(7) of the Broadcasting Act.

Deputy communications minister Pinky Kekana presented the case to Parliament's portfolio committee that the standard definition of a TV licence needs to be updated to include other electronic devices, such as laptops, cellphones and tablets, as more South Africans migrate to video-streaming services.

The proposal would essentially expand the current TV licence system to require that VOD services adopt the same approach.

The draft policy seeks to ensure service providers like MultiChoice, Netflix and Apple TV collect TV licences on behalf of the SABC, so that people who don't have television sets but enjoy VOD entertainment services via smart devices also pay TV licences.

The public have been given until 3 December to comment on the White Paper.

Dear SA, which collects and delivers each comment received on its Web site to government, says the draft policy has caused a public outcry, with the majority of South Africans who have commented saying the proposal is an unintelligible attempt to extort public funds to make up for the SABC’s current financial woes.

“This is absolutely preposterous! You cannot charge people for others’ content! This is like me charging you for the work that another contractor did. Ludicrous! All you government institutions − stop trying to rip off the citizens! You are here to provide and serve, not dictate, control and demand!” reads one comment.

Another angry citizen writes: “The SABC must first learn to run a business properly and profitably. Due to their mismanagement, they are trying to find other ways of screwing fellow South Africans out of their already little hard-earned money.”

A Western Cape-based citizen asks: “Why do you need a TV licence if you don't watch anything broadcast by the SABC on your smartphone? It's not as if it has a TV tuner built-in.”

While the draft proposal aims to modernise the broadcasting service to be in line with government’s fourth industrial revolution (4IR) goals, Dear SA founder Rob Hutchinson believes that if adopted, it will have far-reaching implications on all sectors of society.

“As the definition of television is to be broadened, licence fees will be included in mobile contracts, or a TV licence will need to be produced when purchasing a smartphone, tablet, computer or other devices capable of streaming content.

“Furthermore, content on streaming services, including YouTube, will fall under the broadened term of broadcasting service, and subject to licence fees paid by the end-user. On-demand services, viewable on mobile devices, will also be subject to licence fees,” Hutchinson points out.

Dear South Africa says it has identified both good points and troublesome areas in the proposal, mostly concerning the modernisation of broadcasting services alongside government’s lack of understanding of the dynamic digital revolution – the 4IR.

Money-making move

The SABC is in a dire financial situation, mainly due to alleged mismanagement and corruption by its former top executives.

The prolonged financial challenges facing the public broadcaster have led to the SABC announcing it will retrench 400 employees.

The SABC has also been reportedly falling behind in its collection of TV licences from the public, amid the economic challenges faced by local consumers.

Arthur Goldstuck, head of World Wide Worx, believes the licensing move is wrong because the burden of funding a public broadcaster is being added to the consumer's load rather than addressing it from the government side.

“The public broadcaster should be funded from the public fiscus, which is already extracting maximum tax from consumers through both income and spending.

“The SABC and government are doing themselves no favours in garnering public support or sympathy by trying to expand the web of collection rather than looking for a new funding model. When we see the abuses of the SABC over the past decades, the extent to which fiefdoms have been allowed, it is difficult to support further expansion of the SABC's reach into our pockets.”

According to Goldstuck, a fundamental problem with the licence fee request is that it is a relic of the apartheid years, when broadcasting was a central resource of the National Party. As a result, there is tremendous historic resentment of the fee. “Add to that the draconian methods used to enforce collection, and you have one of the great grudge purchases of our society.”

Discussing the feasibility of tracking each device that has subscribed to a VOD subscription service, Goldstuck says while there are numerous methods that can be used to tax the use of devices, “it will take extensive investment in systems to track and maintain licensing across all devices, and a new industry will arise around attempts to evade such taxes. It is a fantastic way to intensify public resentment of government's reach into private lives.”

Nozi Dikgale, independent media analyst, believes the aim is not necessarily to have a negative impact on consumers, but rather to tighten regulations around these online services.

“Once this framework is implemented, those VOD services that are targeting SA citizens will not have a choice but to comply with the set regulations.

“The current economic and social conditions of the country will to a certain extent have an impact on how consumers uptake these services. This will all differ according to different consumer segments.”

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