TVB has to bite the bul­let to make a turn­around

China Daily (Hong Kong) - - BUSINESS HK - PETER LIANG

Dwin­dling ad­ver­tis­ing rev­enue and the grow­ing pop­u­lar­ity of set-top box has put Tele­vi­sion Broad­casts Ltd (TVB), which has a vir­tual mo­nop­oly in free-to-air ter­res­trial TV broad­cast­ing, in a dilemma.

Ear­lier this week, TVB is­sued a profit warn­ing, say­ing it ex­pects profit at­trib­ut­able to share­hold­ers for 2016 to fall be­tween 55 and 65 per­cent from that of the pre­vi­ous year. The com­pany’s profit for 2015 slipped 6 per­cent to HK$1.33 bil­lion.

In a state­ment, TVB blamed de­clin­ing ad­ver­tis­ing spend­ing for the loss of rev­enue. This is hardly sur­pris­ing. The shift of a larger share of shrunken ad­ver­tis­ing spend­ing to the in­ter­net is widely ac­knowl­edged. But, the mag­ni­tude of the im­pact on TVB’s re­sults, based on the com­pany’s lat­est per­for­mance, has caught many stock an­a­lysts off guard.

With its last ma­jor com­peti­tor gone, TVB will have to look at it­self to iden­tify the root cause of the prob­lem, which may lie in its per­ceived in­abil­ity to pro­duce pro­grams to draw younger view­ers. The re­ported fall in the rat­ings of its var­i­ous TV drama se­ries shown dur­ing prime time view­ing in­di­cates that TVB is fall­ing be­hind the times.

Buy­ing pro­grams from South Korea or the Chi­nese main­land won’t be of much help be­cause they ap­peal only to a small seg­ment of the lo­cal au­di­ence. The old story lines and tire­some for­mats of the many T VB pro­grams that had won a huge fol­low­ing of fans in the past have lost their magic.

In du s t r y in s i d e r s h av e re­peat­edly pointed out that TVB must make a clean break from its es­tab­lished cor­po­rate cul­ture to stay rel­e­vant to the new en­ter­tain­ment world. But, mak­ing changes is a tough call for a com­pany that has as il­lus­tri­ous a past as TVB.

If it aban­dons the old suc­cess for­mula, the TV sta­tion risks alien­at­ing its still size­able, al­beit ag­ing, core au­di­ence with­out any guar­an­tee of win­ning over new fol­low­ers. For that rea­son, the com­pany man­age­ment’s re­luc­tance to make dras­tic changes in pro­gram pro­duc­tion is un­der­stand­able.

TV B ’s co r p o r a t e pe r f o r - mance in re­cent years has shown that mak­ing in­cre­men­tal changes is not go­ing to be of much help. Not many younger view­ers are im­pressed by the fa­mil­iar faces and cus­tom­ary an­tics of the many ag­ing en­ter­tain­ers

With­out a clean break from the past, no mat­ter how il­lus­tri­ous it had been, TVB may not have a bright fu­ture.”

who ap­pear fre­quently on the sta­tion’s va­ri­ety shows.

With­out a clean break from the past, no mat­ter how il­lus­tri­ous it had been, TVB may not have a bright fu­ture.

BILLY H.C. KWOK / BLOOMBERG

An ever com­mon sight at pub­lic trans­port fa­cil­i­ties in Hong Kong, with the tech-crazy crowd to­tally obliv­i­ous to what’s go­ing on around them. The rise of mo­bile me­dia plat­forms is seen to have se­ri­ously eroded the cof­fers of Tele­vi­sion Broad­casts Ltd, which is­sued a profit warn­ing ear­lier this week.

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