20 February 2019
In 2013, TVB posted a 4 percent increase in revenue but its net profit was up just 0.3 percent. Photo: HKEJ
In 2013, TVB posted a 4 percent increase in revenue but its net profit was up just 0.3 percent. Photo: HKEJ

TVB revenue woes: Advertising pie still shrinking

How much does a Hong Kong television artiste make?

The question emerged — and promptly became a hot talking point — after an entertainment magazine published the story of a former beauty pageant winner who had worked 18 years at Television Broadcasts Ltd. (TVB) (00511.HK).

It turns out that by the time she left the broadcaster, she had a basic salary of HK$18,000 (US$2,322) a month after a HK$300 pay rise.

The Hong Kong Economic Journal’s EJ Tactics column examines what the story tells us about the free-to-air TV industry.

TVB saw its revenue rise 4 percent to HK$5.68 billion in 2013 from a year earlier, but its net profit went up just 0.3 percent to HK$1.74 billion.

Gross profit rose 1 percent compared with a 5 percent increase in general and administrative expenses as staff costs in Hong Kong and Taiwan climbed, according to the company’s financial report.

Hong Kong Television Network Ltd. (01137.HK, HKTN) may have helped swell TVB’s staff costs when it aggressively targeted its talent pool last year ahead of an unsuccessful attempt to win a free-to-air license. That may have forced TVB to offer incentives to keep its top artistes. 

The bulk of TVB’s income came from commercial advertisements but revenue growth from its top advertisers — skincare products — slowed to 3.6 percent.

Other revenue drivers included baby formula, mobile phones and electronic gadgets, private loans and insurance, as well as dental and healthcare products.

Advertising income from lenders slumped 10 percent while that from property developers plunged 27 percent amid fewer new projects thanks to a series of housing curbs. The number of such advertisements tumbled 35 percent.

Advertising revenue from lenders and property developers is still shrinking, so any new addition to the free TV market will only make matters worse.

That’s something TVB can do without.

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Freelance journalist

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