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Growth in ad revenue raises questions on reason for denying HKTV licence

Advertising industry executive says market growth could absorb third free TV licence

PUBLISHED : Monday, 18 November, 2013, 6:36am
UPDATED : Monday, 18 November, 2013, 12:41pm
 

Spending on advertising has risen by more than 60 per cent in Hong Kong since 2008, calling into question the government's claim it granted new television licences to only two applicants because there was not enough ad revenue to support three.

Advertising industry insiders say the pie would get bigger still if the government relaxed regulations, such as rigid rules on total advertising time per hour of broadcasting.

Last month the Executive Council rejected a licence application by Ricky Wong Wai-kay's Hong Kong Television Network, saying the market could not sustain so many players. But Melanie Lo Ka-wai, chairwoman of the Association of Accredited Advertising Agencies media committee, said: "Had HKTV been given a licence, the market could've picked it up quickly because the market had great expectations about its programmes."

Advertising spending data obtained by the South China Morning Post shows that Jade, the Chinese-language channel of the city's biggest television station, TVB, suffered the largest drop in advertising market share, while ATV's share of ad spending hit a new low of less than 1 per cent.

According to the data, compiled by media monitoring firm admanGO and supplied to media agency PHD, total advertising spending across all media increased 65 per cent from HK$60.2 billion in 2008 to HK$99 billion last year. The figures are based on published rate cards and do not take into account discounts.

Media planners said despite TVB's drop, the two new free-TV licensees would pose no threat to TVB. "For TV ads, there is no choice" but to pay costly rates to advertise on TVB, said Ray Wong, CEO of PHD.

Jade, which had a 94 per cent audience share last year, saw ad revenue increase from HK$12.3 billion in 2008 to HK$14.6 billion last year. However, its share of total advertising spending dropped more than that for any other media outlet, from 20 per cent in 2008 to 15 per cent last year. In August, TVB reported a 9 per cent drop in net profit to HK$770 million in the period from January to June.

TVB opposed moves to issue licences to the three applicants.

More money was spent on new platforms that serve more targeted consumer groups, including TVB's digital channels J2 and HD Jade, pay-TV channels, internet and mobile apps, and the MTR. TVB's new digital channels increased their share of the advertising market 10-fold from 0.4 per cent in 2010 to 4 per cent this year. Interactive digital platforms had 7 per cent of the market - 10 times that of ATV's Chinese-language terrestrial channel Home.

In 2008, Home was estimated to have earned HK$3 billion in ad revenue, for a 5 per cent market share. But after mainland tycoon Wong Ching became a major investor in 2010, revenue dropped to HK$654.4 million, or 0.7 per cent of total ad spending this year. Last year 10 ATV Home programmes recorded zero rating points, CSM Research said.

Cable TV's share of ad spending rose from 5 per cent in 2008 to almost 9 per cent this year. Over the same period, Now TV's share rose from 1 per cent to almost 3per cent.

Video: HKTV supporters' second round of protest at government HQ

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This article is now closed to comments

John Adams
If it looks like a duck, sounds like a duck and walks like a duck.....
Giwaffe
Coupled with Lee Wai-ling's recent shuffle over at Commercial Radio from her spot as host of On A Clear Day, I'd say this is all part of openly secretive censorship.
John Adams
If it looks like a duck and sounds like a duck and walks like a duck.....
 
 
 
 
 

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