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The South African Broadcasting Corporation (SABC) plan to ask Netflix and MultiChoice to charge TV license fees it has been dismissed by experts as unrealistic.
Deputy Communications Minister Pinky Kekana has recently said that the expanded definition of a television license is outdated and must be adjusted to current realities.
The SABC said a regulation is needed that would require service providers like MultiChoice (DStv) and Netflix to collect television licenses on behalf of the SABC.
Kekana said the government’s proposal to help SABC improve its financial position would include allowing the public broadcaster to charge license fees from non-TV users.
He added that TV license fees should not be limited to televisions, but should also include devices such as laptops and smartphones that are used to consume content.
This idea has been programmed by technology experts, it is unrealistic and difficult to apply.
Rain’s founder and venture capitalist Michael Jordaan said all companies would love to be paid by their competitors, but that’s not how competition works.
“You have to constantly improve to stay relevant,” Jordaan said of SABC’s funding challenges.
Stuff Magazine editor Toby Shapshak said it is a “crazy suggestion” to expect Netflix or Amazon Prime to charge television license fees.
He stressed that there are many problems with the proposal, such as who is going to charge the TV license fee.
“I subscribe to Netflix, DStv, Showmax and Amazon Prime. Which of these four companies will charge the television license fee? ” I ask.
“How are they going to cooperate with each other and what if everyone charges me the fee?”
TV license model fails
The chief executive of the organization undoing the tax abuse (Outa), Wayne Duvenage, said the television licensing model is failing.
“Any tax or levy that fails to meet the required compliance due to mismanagement and is not enforceable should be terminated,” he said.
Duvenage said television licenses have become an irrational tax and compliance has declined over the past decade.
“Ultimately, this means that the state broadcaster’s revenue model needs to be reviewed, as well as its business model and cost structures,” he said.
“We understand the need for a public issuer and that part of its funding must be obtained through taxes or general tax allocations. The question is how much, why and where is the supervision of this. “
He said the best outcome would be for SABC to become financially viable as a broadcaster of choice and not out of necessity.
The idea of changing the failed TV License revenue mechanism to other commercial broadcasters or live streaming entities, or adding a tax on the sale of electronic devices such as laptops, phones and laptops, is also not a solution in opinion of Outa.
“This has other unintended consequences and interferes with the sensitive pricing models of these entities,” he said.
“Additionally, these items are already taxed through trade taxes, VAT and import duties, so adding a tax to these electronic items to pay for the public broadcaster would essentially be double taxation.”
No comments from Netflix and MultiChoice
MyBroadband asked Netflix and MultiChoice for comment, but the companies did not provide comment.
MultiChoice said it has taken note of the reports in the media and will respond in due course.
“We currently have no comment on this story,” Netflix said.
Toby Shapshak interview
Michael Jordaan’s Twitter comment
All companies would love to be paid by their competitors. But that is not how the competition works. You have to constantly improve to stay relevant. https://t.co/MvRWuuyV2N
– Michael Jordaan (@MichaelJordaan) October 20, 2020
Now Read: South African Netflix Viewers Must Pay TV License Fees – SABC
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