Scrap listeners’ licences, audit tells ZBC

via Scrap listeners’ licences, audit tells ZBC | The Herald May 20, 2015

The Zimbabwe Broadcasting Corporation must scrap listeners’ licences which rake in $5,7 million per year and replace them with subscription fees that can generate up to $15 million annually, a forensic audit carried out on the firm has recommended.

The audit was done by KPMG Chartered Accountants to establish what transpired and what could be done to improve ZBC’s operations following corruption allegations against its board and top management.

The report indicated that top management prejudiced the corporation of nearly $25 million through salaries and inflated allowances.

The ZBC board, led by Dr Cuthbert Dube, has since been replaced, while top managers have been suspended, with some officials in court over mismanagement of the public broadcaster.

The KPMG forensic audit report was presented to Parliament by Information, Media and Broadcasting Services Minister Professor Jonathan Moyo on Monday.

The report said as part of restructuring, the ZBC licensing department should be abolished.

It said a technical operator, preferably Transmedia, should take over management of the spectrum on behalf of the Government while broadcasters compete on content.

KPMG said ZBC revenues were likely to increase significantly with the scrapping of licences.

“Licence fees, currently amounting to $5 710 428 as per 31 December 2013 financial report, will be removed and replaced by subscription fees currently estimated at $15 million for year one,” reads the report.

The TV licence for the two ZBC channels is $30 per year and KPMG said the ongoing digitisation should result in better quality of content at the same price or less.

“Also, the lowest rate charged by Multi-choice is $10 for 27 channels and ZBC will need to have a fee that is significantly lower so as to attract subscribers,” the report reads.

KPGM said abolishing licence fees and replacing them with subscription fees was part of measures to improve revenue streams.

“The technical operator should have the responsibility of managing the multiplexers and signal distribution,” reads the report.

“The technical operator will be precluded from any form of broadcasting services.

“This creates an environment where the ‘head end” is managed by the signal distributor and allows competition among broadcasters on content. This is also frees up resources and time to broadcasters to concentrate on broadcasting and content production,” it said.

“Preclusion from broadcasting activities will ensure independence and objectivity by the technical operator. Having the technical operator managing the head end will enable subscribers to use one Set Top Box to access the different broadcasters’ programmes.”

KPMG also recommended that Transmedia be responsible for inserting conditional access to all broadcast signals so that customers only access signals they have paid for.

“The technical operator inserts conditional access into all broadcast signals and will allow customers access to channels they have paid for. Conditional access will only allow pay TV for both ZBC and private broadcasters and the spectrum manager will collect subscriptions and remit them to the various broadcasters at the pre-agreed rates,” the reports reads.

KPMG said $3 per month be levied on all viewers. This should cover two ZBC channels with the amount being shared by the broadcaster and the technical partner at rates to be determined.

“Recommended viewers’ fees should be $3 per month and this will cover ZBC’s two channels, one full spectrum channel and another one,” the report read. “This amount will be split between the technical operator and ZBC at rates to be determined. This recommendation will be an alternative to the current licence fees,” it said.

“All viewers should be required to pay the basic $3 per month before they can pay for other channels either from ZBC or from private players.

“Three dollars is a basic viewers’ fee for all viewers and entitles them to watch the two basic ZBC channels.”

The country is going through a digitisation process, with Government committed to beat the June 17 International Telecommunications Union deadline to switch from analogue to digital broadcasting.

This will result in the availability of more broadcasting frequencies and the likely entrance of more private players in the sector.

The payment of ZBC licences is already a contentious issue, with Harare West legislator Jessie Majome recently taking the public broadcaster to court over the matter.

Apart from abolishing the licensing system, KPMG recommended that ZBC cut its staff of nearly 1 000 by 40 percent.

As at February 2014, ZBC had 962 employees.