Hong Kong advertisers fear loss of competition with demise of ATV
Advertising industry veterans in Hong Kong are urging the government to decide as soon as possible on the reallocation of the free-to-air spectrum to ensure fair and open competition in the television market.
They say that with ATV out of the picture and its analogue spectrum to be taken over by public broadcaster RTHK - which does not take advertising - TVB will be the only option for high-penetration television ads.
They estimated that more advertising money will go to digital online platforms - which have already increased 50 per cent, from HK$1.7 billion in the first quarter of 2014 to HK$2.7 billion, in the first quarter of this year.
Estimates of industry advertising spending obtained by the South China Morning Post - based on the pre-discount price tag listed on rate cards - show that TVB's Chinese Jade channel, available via analogue spectrum, is the dominant player among all television stations.
However, estimated advertising spending on TVB Jade in the first quarter this year dropped by nearly 4 per cent from the first quarter of last year.
ATV, which had been urging advertisers to place ads with the beleaguered station to pay staff, saw a nearly 79 per cent jump in the estimated ad spend in the first quarter of 2015 to HK$350.86 million - from HK$196.32 million in the first quarter of 2014.
But the increase is still small compared with TVB Jade's HK$3.98 billion.
Melanie Lo Ka-wai, chairwoman of the media committee of the Association of Accredited Advertising Agencies of Hong Kong, said TVB's dominance had been a long-time issue, but she expected it would be worse in the future, after ATV's licence expired in November.
"If RTHK is going to take over ATV's analogue spectrum, advertisers are left with no option, because RTHK doesn't take ads. It is confusing," Lo said.
She added that despite the government awarding a 12-year free-TV licence to PCCW's Hong Kong Television Entertainment Company, it would have limited access because it would be transmitted via a fixed network covering 65 per cent of the households in its first year. Analogue, however, can reach 99 per cent of the city's population. Some 480,000 households can receive analogue signals only.
Ray Wong, CEO of media agency PHD, said advertisers would soon have to come up with their media buying plan for 2016.
He said the government must introduce a player that could be an effective competitor to TVB as soon as possible. "If there is no competition [in the TV industry], there is no talking point to draw the audience back to watching television," Wong said.
"If RTHK has no resources and keeps repeating its programmes from decades ago, it will be no different from ATV.
"The significant increase in internet advertising shows that the traditional terrestrial TV market is shrinking," Wong said.