OPINION | For streaming levy to work, it should benefit all parties

The TV licence system is on life support. Less than 20% of South Africans with a licence pay and the costs of chasing payments often outweigh the revenue collected. People don’t see the value in funding a public broadcaster when they have an endless stream of content available elsewhere.

That said, the SABC still matters. It provides news, educational programming and entertainment for millions who can’t afford premium services. It ensures that vital information reaches all South Africans, promotes local storytelling and supports cultural preservation. A strong, independent public broadcaster is essential for media diversity and democracy, making its sustainability a national priority.

Minister of communications and digital technologies, Solly Malatsi, recently announced he was considering the possible introduction of a levy on streaming services as a funding option for the SABC, saying the TV licence model was inadequate due to “low compliance, high collection costs and the eroding effects of inflation”.

Yet, forcing streaming platforms to foot the bill isn’t as simple as it sounds.

In some countries, streaming services absorb levies as part of their operating costs, but that’s unlikely here. We’ve already seen Netflix, Amazon and Disney+ increase their prices multiple times in the past few years.

If this levy goes ahead, chances are South Africans will be the ones covering the cost through higher subscription fees. And with the economy under pressure, many South Africans are already cutting back on entertainment spending. If prices rise again, more people might turn to illegal streaming, free ad-supported content or even ditch paid services altogether.

Beyond funding the SABC, there’s a bigger conversation to be had about how global platforms support local content. Over the years, Netflix, Amazon and Showmax have invested heavily in local productions, giving our stories a global audience. But that is starting to slow down.

Some platforms are becoming more selective with local content and Amazon has already reduced its spend in Africa. Moreover, as streamers shift focus from subscriber growth to profitability, content churn is set to accelerate.

Viewers, constantly switching platforms for fresh entertainment, are pushing them to deliver more at a faster pace. This leads to reduced budgets and a drop in content quality.

If the government forces streaming platforms to pay a levy, it’s a real possibility they will cut back on local investments even further. On the other hand, if the levy is structured properly, it could be channelled back into funding local productions, creating jobs and supporting the industry.

But that’s the key – it needs to be done right. If there’s no transparency in how these funds are used, we could end up with another tax that disappears into the system without benefiting SA creatives and content producers.

SA is still a valuable market for streaming services and global platforms have dealt with tougher regulations elsewhere. But they could scale back their operations, reduce local content investments or bundle the costs in a way that makes streaming less affordable for South Africans. Streaming services already face high costs here.

For this levy to work, it must support both the public broadcaster and the local content industry – without making streaming unaffordable. Funds should be reinvested in local films and TV shows, not absorbed into government budgets. The levy must also be reasonable. If it’s too high, streaming platforms will pass the cost on to consumers or cut local investments, hurting viewers and the industry.

Different streaming models must also be considered – a flat tax won’t work for platforms that operate differently. Additionally, private broadcasters like MultiChoice and eMedia could also contribute: a local content levy would ensure that funding responsibility is shared, rather than placing the entire burden on global streaming platforms.

Finally, the SABC must prove it can manage funds responsibly. Before imposing a new tax, the government needs to fix inefficiencies and ensure transparency, so this revenue benefits SA content producers.

• Adams is a sales director at Reach Africa