South African public broadcaster SABC, which relies on advertising for 80% of its revenue, is revising its sales and sponsorship policies, which will be tested against prominent methodologies in the market place. 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, whilst all sales staff will 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. SABC 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 the scheduling thereof, to counteract declining audience share. A benchmarked CPP indexed based pricing model has been implemented, that 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 and 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.
Says acting GCEO Gab Mampone: ‘As the SABC was extremely optimistic a year ago, we decided to set our revenue budgets based on our compounded annual growth rate (CAGR). 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.”
Due to macro economic factors and advertising industry challenges towards the latter part of 2008, the SABC was unable to realise revenue numbers and thus projected a R784 million budget shortfall. According to Mampone, 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.
