How SABC blew R300m

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The new advertising management system introduced at SABC radio last year has bled the broadcaster of about R300m to date, making it one of the biggest contributors to its current financial crisis.

“Ads going into limbo, ads being lost in transmission, ads cutting, ads being cancelled, ads that are flighted without being billed and ads with incorrect languages on stations,” were just some of the litany of problems that account executives at the SABC described in a report about the flawed system.

Several internal documents obtained by City Press – a report from advertising account executives, a radio sales working committee report and a report on a mass grievance hearing brought by 41 advertising sales staff – indicate that the new system, called Landmark, had been operating successfully for years on SABC TV and was used by a long list of leading international TV operations. But is has proven not at all suited to tracking radio adverts. Especially in 11 African languages across 18 radio stations.

Six independent and impeccably placed sources close to SABC commercial enterprises – who do not wish to be named for fear of victimisation – confirmed that, on average, the SABC is having to issue credit notes to advertising agencies and clients for botched advert flightings valued at about R15m a month.

That totals about R200m to date. In addition, the documents say each of the SABC’s stations pays R300 000 a month to use Landmark – R70m since it was first implemented in April 2016.

They claim that millions more are being lost because the SABC has had to remove advert placements between midnight and 05:00 because the system cannot track them during these hours.

The system, say staff, cannot handle live radio advertising reads, especially in African languages, or on-location broadcasts and the many different forms of sponsorship and advertising attached to them. As a result “clients are receiving free airtime without being billed for [it]” according to staff.

“That’s the tip of the iceberg,” said a well-placed insider. “There are many instances of the system saying ads weren’t flighted and so a client isn’t billed. But when we check later we see it was flighted.”

“Our reputation is in tatters"

SABC spokesperson Kaizer Kganyago has vehemently denied these sums.

“Many of the revenue figures and allegations provided to City Press are grossly exaggerated and misleading. The SABC acknowledged at the time that the expansion of its existing sales bookings system to include radio sales from 1 April 2016 had been particularly difficult, in spite of comprehensive training and systems testing beforehand.”

“The biggest challenges were system interfaces with legacy radio play-out systems and flawed historical operational practices. An audit of the expansion project was commissioned and most (if not all) of the recommendations have been implemented,” he said.

The Landmark system was put in place under suspended SABC boss Hlaudi Motsoeneng and signed by his head of TV Nomsa Philiso.

Radio sales staff said the new system did not allow them to report back effectively to clients and this made them look unprofessional.

“Our reputation is in tatters,” said one of the sources City Press spoke to this week. Another said: “I have never seen morale this low. This year is even worse than last year. We get very basic salaries and the rest is commission – if we meet target. But we cannot meet target with Landmark.

“We could do so on the old [Traffic Information Message] system, but not this one. People are tired, they want to go on strike.

Their accounts were confirmed by Hannes du Buisson of the Broadcasting, Electronic, Media and Allied Workers’ Union and Tuwani Gumani of the Media Workers’ Association of SA.

Kganyago responded, saying: “The SABC understands that change and migration to a new system were difficult for some of the staff concerned. The SABC is satisfied that tighter operational controls and closing historical revenue reporting loopholes have resulted in more accurate revenue reporting that can better withstand audit scrutiny.

“In the interests of the sales staff concerned, the SABC recently provided additional specialist training for all system users and will continue to address valid complaints and process deficiencies that may be raised,” he added.

"Gross incompetence"

But staff state in the reports that radio sales decisions are being made by SABC operations staff with experience only in TV and that sufficient training and consultation with all parties that need to use the system did not happen.

“To this day there are many who cannot access or use the system. They are lying if they say we are trained,” said a sales source.

Over and above the R300m in lost revenue, the SABC interim board’s Mathatha Tsedu recently told Parliament that Motsoeneng’s 90% local content policy on radio has cost the SABC a further R30m in lost revenue.

This is believed to be mostly from disaffected advertisers who wanted their brands associated with global trends and music.

Sources this week said that the interim board was only now becoming aware of how damaging the radio system really is.

“It’s gross incompetence,” said a senior source in SABC commercial enterprises.

“We had years of warning that we’d have to replace the system, but it was done at the last minute without a parallel system to fall back on. Basically, we slept on it and now we’re paying.”

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