Limits placed on commercials during peak hours are expected to hurt revenues The majority of mainland broadcasters violate a new rule which limits the amount of television commercials that can be broadcast during prime-time viewing hours. According to a study by state-backed media research firm CVSC-TNS Research, about 80 per cent of 558 TV channels on the mainland broke the rule, which limits commercials to no more than 15 per cent of airtime during prime-time hours, defined as 7pm to 9pm. The stations on average devoted 17.95 per cent of airtime to commercials during the peak viewing hours. The new rules, set by the State Administration of Radio, Film and Television (Sarft) last month, come into effect on January 1. Any violators could have their broadcast licence revoked. The new regulations also limit commercials to just 20 per cent of an entire day's broadcast. Industry watchers said the new rules were just the first step in government efforts to regulate the scattered but highly lucrative TV advertising market in China. 'It is a good thing that the advertising market is getting more regulated,' Media Partners Asia executive director Vivek Couto said. 'The media [in China] is getting more regulated, it is happening. The industry is better off run more transparently.' Mr Couto said that after the new regulations came into effect, mainland broadcasters would still be able to air more commercials per hour compared with their counterparts in Hong Kong, Japan, Korea and Malaysia. Mainland broadcasters can in effect air up to 12 minutes of commercials per hour, compared with six to 11 minutes elsewhere in Asia. 'The situation in China isn't too bad,' he said. 'It protects the advertising industry and content providers.' The regulations are expected to hurt mainland TV operators, who collect little revenue from subscriptions and depend largely on advertising. For some broadcasters, commercials sold during prime-time hours account for 80 per cent of their revenue. Shaanxi TV said the new rules would 'definitely affect its profits' while Beijing TV said it was considering raising its fees for advertising during prime time. Last year, TV advertising sales in China reached 25.29 billion yuan (HK$23.7 billion), representing 28 per cent of total advertising revenue. Government officials said the tougher regulations were not aimed at cutting advertising revenue but cleaning up the industry, which had been the target of complaints by viewers who said there were too many commercials. They also said less commercials would increase viewership and work to broadcasters' economic benefit in the long run. 'The new regulations will hurt their earnings at the very beginning and it will take them some time to recover from the change,' said Ren Qian, director of Sarft's society management department. 'We will collect ideas from stations across the country on how to offset the loss caused by the new regulation. If the ideas are reasonable, we will promote them nationwide.'