Still reeling from the global recession, ad spend for 2009 dipped earlier in the year, rising in the second half as the property market started to recover, leading to doubledigit growth in the last quarter.

While data from admanGo shows overall ad spend rose by 5.86 percent to HK$26.11 billion on year, actual spend was lower than the previous year as marketers are buying more for less. The Association of Accredited Advertising Agencies (HK4As) said recently although ad spend has increased, the industry saw heavy discounts of up to 15 percent on media rates.

According to admanGo, the bulk of advertising dollars spent last year still went to TV, with 35.43 percent or HK$9.25 billion of total ad spend going into the medium, an increase of 7.03 percent from 2008. Ad expenditure increased across media outlets with the exception of print media. Digital went up 7.03 percent, benefiting from budget cuts and an ongoing trend among marketers to shift focus to targeted online advertising.

“Last year was a slow year. A lot of brands suspended their branding campaigns to focus more on promotion,” said Melanie Lo, managing director of Mindshare. She expects branding campaigns to make a strong comeback as the economy continues to shake off the effects of the financial turmoil. “The property market and finance sector are expected to be more active, so there will be growth in TV and newspaper,” Lo adds. “Digital media can expect over 20 percent growth this year, as more and more brands use this medium to build relationships and interact with their target consumers,” Lo said. “We expect around 32 percent to 35 percent of the ad budget will be allocated to TV in 2010.”

Data from CSM Media Research showed primetime TV viewing maintained levels seen in previous two years, with terrestrial TV capturing 80 percent of 2.28 million households.

Free-to-air
TVB continued to maintain a majority audience share in the terrestrial TV market and remained top-of-mind among media buyers for its high penetration rate. “TVB-Jade still enjoys a large viewership, consisting mostly of mature audiences, so it’s a ‘can’t miss’ for clients who want to launch a TVC,” said Lo, adding that the network is “enjoying a great advantage in launching any new programs as it has almost all the popular TV celebrities.”

Indeed, TVB-produced shows continued to monopolize CSM Media Research’s Top 10 rated TV programs. Topping the list is the network’s costume drama Beyond The Realm of Conscience (宮心計) , which peaked at 50 points (TVR) with 3.18 million viewers during its final episode. The Realm of Conscience, loosely based on the highly successful Korean drama Jewel In The Palace (which aired on TVB in 2005), became the network’s highest-rated series in years, leaving last year’s chart-topper Moonlight Resonance in the dust. Seven other TVB dramas made the Top 10, including the well-received period drama Rosy Business (巾幗梟雄). TVB anniversary shows round up the Top 10 list.

In June, TVB launched what it claims to be the first TV food programme with interactive functions in Hong Kong. Bundle packages including product placement sponsorship, TVCs and expandable banner ads on TV screen. Those watching the new infotainment program, Eating Right, can use their remote controls on TVB set-top boxes or iDTV that carry TVB interactive logo to retrieve information such as episode synopses, restaurant descriptions, recipes and health tips on-screen. The network planned to make new advertising spaces available on the screen, allowing product placement sponsors to present extra in-depth information to TV audiences.

TVB had hoped its launch free-toair 24-hour news channel iNews would provide a new stimulus for digital terrestrial television (DTT) adoption, but without a muchneeded boost from a major event such as the Beijing Olympics in 2008, penetration of DTT grew at a slower pace in the first half of 2009. DTT household penetration (including PC-based receivers) grew marginally from 32.3 percent in December 2008 to 33.6 percent in March 2009. However, penetration has since increased to 40.2 percent in June 2009.

TVB currently operates seven free-to-air (FTA) channels: two analogue channels — Jade and Pearl, and five digital channels – digital simulcast channels of Jade and Pearl, with the same programming schedule as their analogue counterparts, and HD Jade, J2 and iNews.

Responding to the growing demand for media convergence during a sales presentation to advertisers and media agencies in November, Stephen Chan, general manager of TVB said, “2010 will be a promising year for advertisers. It will be a year where TVB will cross media platforms, extending our TV programs into films, mobile, online and magazines with shows such as My Name is Bond on J2 Channel.”

He added, “Our TV program production will also be crossregional, with new productions with partners in Taiwan, Malaysia and Singapore. It will be a year for cross-generation with the launch of a new 13-week young talent challenge show Sweet 16.” TVB continues to beef up its online portal, offering “top-up TV” capabilities and live feed of its news programs. Earlier this year TVB.com rolled out a mobile application in partnership with Nokia to stream exclusive content such as program synopsis, outtakes, still shots and an instant electronic programming guide.

However, the network remains optimistic about TV ad expenditure. ST Tso, deputy controller at TVB’s marketing and sales division, said at the same presentation that the ad market appeared to be picking up after a lackluster year. “Everyone is confident that [2010] will be [a] better year. With more resources adding to our drama and nondrama programmes, we are hoping advertisers will have more confidence in advertising commitments with TVB in 2010.”

Over at ATV, senior staff movement continues to plague the network. Management shakeup continued in 2009 as newly appointed CEO Ricky Wong resigned just after 12 days on the job, citing personality clashes with Linus Cheung, who had also just recently joined ATV as chairman and director. When the network appointed Taiwanese Nancy Hu as CEO in March, it seemed the long-running management saga was coming to an end, until ATV closed a turbulent year by announcing in December it had accepted Cheung’s resignation.

ATV’s flagging fortunes remain little changed despite the US$129 million worth of convertible bonds invested by Taiwanese billionaire Tsai Engmeng into Alnery, which holds a 47.58 percent stake in ATV. In May ATV called off it’s 14-yearold annual advertising awards for the first time, citing a lack of interest from advertisers.

Retrenchments continued as the axe fell on with another 36 staff in May, most of them from the newsroom, after ATV reduced its channels from eight to five. “Without the 24-hour news channel, some newsroom staff became redundant,” senior vice president for corporate development and external affairs Kwong Hoi-ying said. The move brings its total headcount down by over 20 percent in less than a year following what was supposed to be a one-off downsizing arrangement in early 2009 that saw 207 jobs cut. Kwong said the job losses were not a result of downsizing, but a strategic move to focus more of ATV’s resources on strengthening its Home channel.

The Six O’Clock News, Delicious Canton (廣飲廣食) and Taiwan Delicacies (台灣好味道), its most popular programs in 2009, lagged far behind TVB’s top ten in terms of viewership. “ATV has been quite lost in direction with the frequent changes in senior management,” said Mindshare’s Lo. “Its focusing on imported drama series during prime time; its ratings are not as stable [as TVB’s],” she added.

With Hu now firmly on board, ATV will have to get its house in order as recent applications for free-to-air (FTA) broadcasting licenses by subscription TV operators indicate Hong Kong’s FTA duopoly may soon come to an end. Recent moves by PCCW, i-Cable Communications and City Telecom could spell trouble for cash-strapped ATV, which heavily relies on imported programming. Each of the new players have invested heavily in building their own news, entertainment, business and current affairs programming.

In a statement earlier this year, City Telecom said, “We believe the current duopoly free TV limits innovation, and Hong Kong is falling behind other more liberalized markets around the world.”

PCCW is the owner of the nowTV pay-TV platform in Hong Kong. i-Cable Communications operates cable, broadband and fixed telephone services, while City Telecom is a telco which currently provides IPTV services under its Hong Kong Broadband subsidiary.

Pay TV
PCCW’s nowTV and i-Cable remain major players in the subscription TV arena, reaching over 70 percent of the pay TV market. Share of viewing by subscription channels grew 38 percent in the first half of 2009 in 1.64 million homes.

“The share of viewing by subscription TV channels, and the potential reach of the medium versus traditional media options, are growing at an even faster rate than household penetration. This audience for subscription TV is more affluent, more receptive and more likely to respond to advertising messages. The more sophisticated the audience becomes, the more sophistication they expect,” according to a report by the Cable & Satellite Broadcasting Association of Asia (CASBAA).

Subscription TV operators continue the push for more ad revenues. The CASBAA-led Asia TV Advertising Coalition (ATAC) launched a marketing campaign to persuade advertisers to spend more of their advertising dollars on Asian pay-TV channels. ATAC was launched in July last year, dedicated to generating new advertising revenue streams for subscription TV across 15 Asian markets.

According to Synovate’s PAX survey, which covers 10 million affluent Asians, regional TV has the ability to reach 5.9 million more high-value individuals than regional print.

It has been a good year for i- Cable Communications. Despite revenue losses in the first half of 2009, iCable’s subscribers totalled 947,000 in June, up 3.27 percent on year. Viewership surpassed TVB-Jade by one percentage point at 43 percent. i-Cable beat incumbent Now TV (owned by PCCW) to the Premier League rights for the next three seasons. The cable TV operator is also offering exclusive coverage of the Vancouver the Vancouver 2010 Olympic Winter Games on TV and internet platforms. Other channels launched include Guizhou TV, Hunan World TV and All Sport Network (ASN).

nowTV continued to expand its offerings, which included a partnership with Tiger Gate Entertainment to roll out the latter’s Kix and Thrill channels, which feature action and thriller content respectively. The pay TV operator also unveiled its first portable home media device, dubbed eye2, which integrates phone, TV and interactive services. Eye2 gives viewers can access more than a 170 channels on-demand, including programs from now TV, Moov as well as video calling. Other launches include Rainbow Media’s female focused channel WE Tv. nowTV’s subscriber base increased by seven percent on year to 992,000 at the end of June 2009.

As technology, viewer demand for more choice increase, so does the ongoing demand for subscription and multi-platform TV solutions. Subscription TV is evolving into a world of advanced interactive services and applications. The increasing prominence of digital provides new revenue opportunities for TV advertising – interactive, video-on-demand. And while ROI remains top-of-mind among media buyers, the TVC still reigns supreme among brands looking for that extra visibility and emotional punch. “Entry cost for TV is still high compared to other media; you have production cost and airtime cost,” said Mindshare’s Lo. “However, given its high penetration, the CPM (cost per thousand) is still cost efficient.”