Not enough ad revenue to pay for five free TV stations in Hong Kong
I refer to the report ("Winners and losers as ad spend up 65pc in 5 years", November 18).
Just how did media monitoring firm admanGO come up with the ridiculous figure of HK$99 billion for last year's total ("across all media") Hong Kong advertising spending? It's not possible.
They gave a disclaimer, saying it was based on published rate cards and the figures had not taken into account the discounts given. Why not? Could they not make an educated guess of the discounts?
Surely they should know how big some media discounts are for its advertising space, with "package" discount rates and some barter/free adverts.
With TV ad spending representing an estimated 43 per cent of Hong Kong's total ad spending of HK$99 billion, it means TV share is about HK$43 billion.
If that was true, it would support many more than five TV stations. Sadly this is not the case.
If TVB managed to secure only about HK$3 billion of advertising spending, where did the other HK$40 billion go? Surely not all to ATV, Cable TV and Now TV; between them, they generate no more than HK$800m.
What is needed is a good estimate of the actual annual net TV revenue, instead of the ridiculous published rate cards.
I estimate net annual TV advertising revenue to be HK$4 billion to HK$5 billion, but my peers from local TV stations say it's HK$3.6 billion to HK$3.8 billion at most. This figure supports the government's reason for not granting more TV licences. TVB has taken the major portion of HK$3 billion. Let's be generous and assume there is HK$4 billion to HK$4.5 billion ad spending. Is that enough to support three or four stations?
To ask the government to increase TV advertising airtime would result in more disruption to programmes, with commercial breaks every 10 minute. That would drive more viewers to the internet, where most shows are free of commercials.
I strongly believe Hong Kong cannot support five free-to-air television stations.
What I fear most is that without a decent budget, they will produce degrading and tasteless programmes that will erode our family values and society.
Robert Chua, Mong Kok