Annual Report Presentation 2005/6

1

• Annual Report Presentation 2005/6
• Parliament Committee on Communications
• 24 October 2006

2
The MDDA Team

• Kanyi Mkonza (Chairperson)
• Mazibuko Jara (Board Member)
• Chris Moerdyk (Board Member)
• Lumko Mtimde (CEO)
• Jayshree Pather (Projects Director)
• Harry Letsebe (Program Manager)
• Annand Chaytoo (former CFO)
• Mbuyiseni Jafta (new CFO)

3
Vision

• Each and every South African citizen should have
  access to a choice of a diverse range of media

4
Mission

• The MDDA is a development agency that will
  assist in building an environment where a
  diverse, vibrant and creative media flourishes
  and reflects the needs of all South Africans

5
Background, Context and Legislative basis

• Section 16 and 32 of the Constitution Act No. 108
  of 1996 provides for the freedom of expression
  and access to information.
• MDDA Act No. 14 of 2002 establishes a statutory
  body called the MDDA.

6
Background, Context and Legislative basis

• The MDDA is entrusted with the responsibility of
  promoting media development and diversity in S.A.
  by providing financial and other support to
  community (non-profit) and small commercial media
  projects.

7
Background, Context and Legislative basis

• The MDDA Act defines media as all forms of mass
  communication, including printed publications,
  radio, television and new electronic platforms
  for delivering content.
• It also defines media development as the
  development of the media environment and
  infrastructure, so that historically
  disadvantaged communities and persons have access
  to the media as owners, managers, producers and
  consumers of media.

8
Background, Context and Legislative basis

• Create an enabling environment for media
  development and diversity that is conducive to
  public discourse and which reflects the needs and
  aspirations of all South Africans

9
Background, Context and Legislative basis

• Redress exclusion and marginalisation of
  disadvantaged communities and persons from access
  to the media and the media industry

10
Background, Context and Legislative basis

• Promote media development and diversity by
  providing support primarily to community and
  small commercial media projects.

11
Background, Context and Legislative basis

• ECA provides more opportunities for electronic
  platforms for delivery of content by community
  and small commercial groups.
• More than 82 community radio stations are on air
• ICASA has recently licensed another 13 community
  radio stations in rural and urban development
  areas

12
Background, Context and Legislative basis

• Community TV may be licensed in 2006/7
• Close to 400 grassroots publications across South
  Africa

13
Mandate in the nutshell

• Help create an enabling environment for media
  development and diversity that is conducive to
  public discourse and which reflects the needs and
  aspirations of South Africans.

14
Objects of the MDDA Act Section 3

• Encourage ownership and control of, and access
  to, media by HDC as well as by historically
  diminished indigenous language and cultural
  groups
• Encourage the development of human resources and
  training, and capacity building, within the media
  industry, especially amongst HDGs
• Encourage the channelling of resources to the
  community media and small commercial media sector

15
Objects of the MDDA Act Section 3

• Raise public awareness with regard to media
  development and diversity issues
• Support initiatives which promote literacy and a
  culture of reading
• Encourage research regarding media development
  and diversity and
• Liaise with other statutory bodies such as ICASA
  and USA (now USAASA).

16
Corporate Governance

• The MDDA is governed by a Board of Directors,
  appointed in terms of the MDDA Act. It operates
  as an independent body, expected through the MDDA
  Act to be impartial and to exercise its powers,
  perform its duties without fear, favor or
  prejudice, and without any political or
  commercial interference. (Section 4, MDDA Act).

17
Funding of the Agency

• Money appropriated by Parliament
• Money received in terms of agreements with any
  organization for furtherance of the objectives of
  the MDDA Act
• Domestic and foreign grants
• Interest derived from any of its investments,

18
Funding of the Agency

• Contributions from Broadcasting Service Licensees
  not exceeding 1 of their annual turnover in
  terms of the Electronics Communications Act of
  2005 (Section 89), or (as a new funding stream)
• Money lawfully accruing from any source.

19
Highlights of the past financial year

• The Board, since 2003/4 has approved support,
  amounting approx. R20m, for
• Just under 100 different media projects
• support for the newly licensed community radio
  stations in the nodal areas earmarked

20
Highlights of the past financial year

• Has provided following capacity building support
• Resource mobilisation workshops in all 9
  provinces
• Workshops held together with AMASA/AMF on
  advertising and marketing in 4 provinces)
• Provided 35 different media managers with
  bursaries
• Provided mentoring support for a number of
  projects
• Have enabled the establishment of 38 new projects
  (i.e. did not exist before)

21
Highlights of past year cont

• Have funded the following research projects
• Research into challenges in distribution and high
  printing costs
• Impact of competition on diversity
• Development of a database of grassroots
  publications
• Indigenous language newspapers challenges
• Representation of women, children, people with
  disabilities, the elderly in media
• Representation of gay and lesbian issues in the
  media

22
Analysis of applications 2005/6

• Applicants applied for about R105m in grants
  since Jan 2004
• MDDA income since inception is about R30.6m
• Some refused because not licensed or incomplete
  applications (i.e. no business plan)
• Those without proper business plans are given
  mentoring support to assist them with proper
  planning.
• Those refused are given opportunity to correct
  applications and apply again.

23
Broadening access to information
MDDA
97 projects (National projects located byhead
office)
EC FS GA LI MP NW KZ WC NC
18 6 23 8 8 6 12 9 7
MDDA is working with MPCCs and others in
provinces with least media to identify potential
projects for support
Projects by Category
Print Print Radio and TV Radio and TV
Community Commercial Community Commercial Training Research
24 26 36 - 5 8
24
New projects
25
MDDA operations2005/6

• 9 staff employed
• Process of appointing a new CEO was near
  completion by the end of period under review and
  was completed in this financial year. Mr. Lumko
  Mtimde was appointed in April 2006, commencing
  his employ in July 2006.
• Procedures and systems in place.

26
Organogram 2005/6
27
Finances 2005/6(For financial year 01 April 2005
to 31 March 2006 )

• Income
• Government R 7m
• Print Partners R4.8m
• Broadcast Partners R5.3m
• Foreign Grants R 38,000.00
• VAT refund R 15,000.00
• Interest R1.8m
• Total Income R18,942, 000.00

28
Finances 2005/6(For financial year 01 April 2005
to 31 March 2006 )

• Print Partners
• Independent Newspapers (Pty) Ltd
• Johnnic Publishing Ltd
• Media 24 Ltd
• CTP/CAXTON
• Broadcast PartnersCTP Ltd
• Midi TV Pty Ltd (e-tv)
• Kagiso Broadcasting (Pty) Ltd
• Electronic Media Network Ltd (M-Net)
• Primedia Broadcasting (Pty) Ltd
• South African Broadcasting Corporation Ltd (SABC)

29
Finances 2005/6(For financial year 01 April 2005
to 31 March 2006 )

• Expenditure
• Grant costs R9 591 000
• Personnel R2 538 000
• Administrative R2 053 000
• Depreciation R 222 000
• Total Expenditure R14 404 000

30
Finances 2005/6(For financial year 01 April 2005
to 31 March 2006 )

• Total Administration costs (incl.
  depreciation) R 4,813
• Total Administration costs (excl.
  depreciation) R 4,591
• Personnel Exp R 1,621 (excluding the other
  expenses, in terms of total costs to
  company approach)
• Training Exp R 115
• Administration cost as a of total income (
  includes personnel costs) 24
• Personnel cost as a of total income
  9
• Training cost as a of total income 1

31
Finances 2005/6(For financial year 01 April 2005
to 31 March 2006 )

• Community Print R 3,599,996.00 (38)
• Community Radio R 2,719,724.00 (29)
• Small Commercial R 2,438,506.00 (26)
• Research R 681,000.00 (7)

32
Finances 2005/6(For financial year 01 April 2005
to 31 March 2006 )

• Total Revenue R18. 942m
• Total Expenses R14. 404m
• Surplus for the year R 4. 538m

33
2006 and beyond(a few highlights)

• Analysis of the ECA implications to the Agency
  operations work in this respect is in progress,
• Review of Regulations, Policies, Procedures,
  Systems and process in order to adequately
  respond to the ECA envisaged growth
• Evaluations are planned on range of projects
  previously supported
• Continue conducting research, in particular on
  the historically diminished indigenous languages
  and cultural groups, and challenges thereof
• Develop sustainable solutions, in pursuit of
  media development and diversity.

34
2006 and beyond(a few highlights)

• Continue to providing grants in response to
  applications for media development and diversity
• Develop strategies with sector, to build stronger
  provincial media networks and/or hubs
• Continue to build credibility of grassroots media

35
2006 and beyond(a few highlights)

• Together with the sector, will plan to resolve
  challenges regarding access to advertising
  revenue for community and small commercial media
• Together with the sector, will develop strategies
  to resolve printing and distribution challenges
  facing the community and small commercial print
  media
• Will develop approaches for supporting community
  television.

36
Funding 2006/2007

• Income R21.8m
• R9m Government
• R5.3m Broadcasting partners
• R4.8m Print partners

37
Budget Highlights2006/7

• Government has increased its contribution for
  2006/2007 to the MDDA by R2.2m.
• Predict that will keep to regulatory cap of 25
  on administration in 2006/2007.
• Could exceed this cap in following years, unless
  the contributions increase as envisaged in terms
  of the ECA.

38
Budget Challenges2006/7

• Funding Agreements with print and broadcast
  partners do not include any inflation linked
  increase costs go up but MDDA budget remains
  the same
• Solution Treasury has provided an increase to
  MDDA in recognition of this

39
Budget Challenges 2006/7 (cont)

• MDDA has to meet regulatory and funding
  agreements requirements
• Regulations divide funds between small
  commercial, community and research
• Funding agreements divide between print and
  broadcast
• Funding agreements specify no more than 10 to
  administration and research
• Funding is on different cycles

40
Challenges ahead

• Capacity of sector to absorb funds most
  projects need training initially, then support.
  Hence, our mentorship approach.
• Reaching media neglected communities, in
  particular the rural areas.

41
Challenges ahead for new media

• Further challenges faced by this sector would
  range from (amongst others)
• Projects loosing skills, given the ongoing
  movement of skilled activists of the sector,
• irrelevant programming and
• the lack of sustainability strategies in some
  projects.

42
Challenges ahead for new media

• Accordingly this, therefore requires that
  community media projects
• develop ongoing on-site / station based capacity
  building and training strategies and plans
• encourage and ensure ongoing community
  participation in the projects,
• constantly engage with community organisations
  and follow through community developments, in
  order to remain relevant,
• develop community based sustainable strategies
  and programmes.

43
Challenges ahead for new media

• Community television also faces specific
  challenges, like
• Frequency spectrum scarcity
• Development of a best model of Community TV for
  S.A.
• Sustainability strategies.
• Other challenges for print media, would also
  include
• Advertising and marketing
• Printing resources
• Distribution
• Etc.

44
Our Milestone Achievements

• 5 year partnership agreements reached with
  Broadcast Media and Print Media
• 2006 marked the end of first three-year funding
  cycle
• Three years of clean, unqualified Audited
  Financial Statements

45
Our Milestone Achievements as ofOctober 2006

• 118 projects supported, with over R20 million
  approved for disbursement
• Media projects supported are located in every
  province in S.A.
• Of the supported projects, 38 are new, did not
  exist prior to MDDA intervention
• Community radio listenership has increased
  significantly

46
The Agency going forward

• Continued compliance with relevant legislations,
  regulations and funding agreements
• Further inroads into underserved communities, in
  order to decrease the information gap between
  communities where there is still no access to
  media
• Creation of an environment of language diversity
  and access to different forms of media by all

47
The Agency going forward

• Support for the provincial hubs to support print
  medias challenges regarding distribution and
  printing
• Develop an approach for supporting the to-be
  licensed Community Television services
• Providing more support to community and small
  commercial media projects

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The Agency going forward

• We hope -
• to ensure diversity of media in each and every
  municipal district of our country.
• to ensure increased media in different indigenous
  languages, reflecting unity in diversity,
• to ensure rural communities are empowered, jobs
  are created, poverty is alleviated and we have an
  informed society.

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Conclusion

• Thank you