TV industry figures call for more relaxed rules on advertising


As television faces tough competition from the internet and other new media, industry figures are seeking a fairer slice of the advertising pie

Television industry figures have called for more relaxed advertising regulations to allow the medium to compete with a growing range of new media.

They say rules governing advertising time, product placement, political advertising – as well as services such as pregnancy testing and funerals – should be eased to give TV a fairer piece of the income pie.

With television now pitched against the internet and other platforms, industry insiders say new income avenues are badly needed, particularly if Hong Kong is to have at least two more free-to-air TV stations.

Chung Yat-ming, an industry veteran and vice-president of the Hong Kong Televisioners Association, said the media ecology in the 1980s was simple as television operators mainly competed with print media for ads.

But now they face the challenge of internet platforms, mobile TV on buses, bus station panels, the MTR and outdoor billboards, Chung said.

In reality, however, television’s share of the advertising pie did not show a significant increase over the past decade.

Figures obtained by the Post show that local advertising revenue for TVB went from about HK$2 billion in 1996 to HK$3.3 billion in 2013 – 65 per cent growth over 17 years.

But the total ad revenue for free television – combining both ATV and TVB – was flat, from HK$2.93 billion in 1996 to HK$2.94 billion in 2011.

Chung, a former ATV executive, said TVB earned more advertising dollars because ATV was too weak to compete with the dominating player. “Advertisers are only reallocating their spending from ATV to TVB, but they are not spending more,” Chung said.

The future doesn’t look any brighter. A Nielsen survey commissioned by the Hong Kong Advertisers Association showed that the advertising budget will continue to shift from traditional media to digital media.

The survey, based on interviews with around 100 advertisers, reported that although 70 per cent of the ad spend will still be allocated for offline advertising, with television as the leading medium, the remaining 30 per cent will go to digital media.

Fifty-two per cent of advertisers said they would reallocate ad spend from television to digital media.

An expert report conducted by Spectrum Value Partners from April 2010 to February 2012, reviewing the Hong Kong market prior to granting new free-TV licences in 2013, concluded that five free-TV stations would be unsustainable in the current market.

Although i-Cable’s Fantastic TV and PCCW’s Hong Kong Television Entertainment were granted free-TV licences in principle, the two players have yet to confirm when they can launch free-TV services.

HKTV, which lost its bid for free TV in 2013, switched to online and still managed to attract advertisers. “It is necessary to explore new models for TV advertising, but the current regulations are too tight,” said Chung.

The Communications Authority media watchdog imposes a TV advertising code of practice on all free and pay-TV operators.

Ad categories such as political and religious advertising, fortune-telling services and funeral services are banned in Hong Kong. Pregnancy test services are also prohibited. TV stations can only show 10 minutes or less of ads per hour from 5pm to 11pm, and 18 per cent of the programme during other times.

Product placement also faces strict regulations. In 2013, the authority imposed a HK$100,000 penalty on TVB for breaching advertising codes after the watchdog received nine complaints about excessive product placement of a vitamin water drink brand in the popular drama Triumph In the Skies II.

“Other places are more relaxed,” said Desmond Chan Shu-hung, assistant general manager of TVB.

Product placement seems to be more relaxed on the mainland and in South Korea. For example, communications app Line and electronics brand Samsung were prominent in the Korean drama My Love From the Star.

Chan said TVB had lobbied the government on the issue for many years, without success, in the hope the advertising regulations would be relaxed so that its share of revenue would go up.

Clement Chung Kwok-tak, general manager of advertising agency PHD, said that while there was room to relax advertising regulations, such as product categories, appropriate restrictions were still needed.

“It is done with good intentions – to protect young audiences,” Chung said.


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