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SCMP Reporter

Television Broadcasts (TVB) has been hit by a high single-digit decline in advertising revenue for last month as a slump in the sector continues to bite.

The dominant free-to-air broadcaster, which holds the lion's share of TV advertising in Hong Kong, had confirmed the year-on-year drop, Merrill Lynch said in a report.

The United States brokerage expected TVB to narrow the decrease to 5 per cent for the first two months of the year, helped by extra income from Lunar New Year packages this month. However, it projected advertising income to shrink 7 per cent for the full year.

Leung Kin-wah, controller of marketing and sales, said there were more commercials last month and this month but some of them were bonus spots awarded to advertisers.

He said the broadcaster had sold fewer than 300 Lunar New Year greeting packages at between HK$25,000 and HK$60,000.

TVB said its largest advertisers, who paid about HK$70 million to HK$80 million for annual packages last year, had finalised their budgets for this year. However, there was concern over their actual commitments, as they were now allowed to spend 15 per cent less but enjoy the same discount.

'There are several of these kind of big clients, including Jardine Matheson Holdings, McDonald's, Procter & Gamble, and Swire,' Mr Leung said.

TVB assistant general manager Cheong Shin-keong previously had said advertising sales would decline at a single-digit rate this year, following a double-digit contraction last year. But he said advertising revenues for the media sector would fall 20 per cent in the first two months.

Steven Chang, vice-president of media specialist firm Zenith Media China, projected that the Hong Kong advertising market had plunged more than 20 per cent in the first two months, as ACNielsen figures, calculated on published tariffs without taking discounts into account, had already shown a high double-digit decline.

Separately, Merrill Lynch estimated that TVB managing director Louis Page, who sold 638,000 shares in the company last week, cashed in about HK$24 million. The brokerage said his disposal might hurt market sentiment in the near term.

Graphic: tv28gbz



Downturn takes toll on TVB