There are two main sources of revenues for the broadcasting industry, viz. advertising and subscription. The income of domestic free television programme service licensees and sound broadcasting licensees mainly came from sale of advertising spots within programme breaks. The domestic pay television programme service licensees, on the other hand, derived their income mainly from subscription fees while sales of advertising spots were secondary incomes.

5.1 Advertising Revenue

According to the estimate of Nielsen Media Research, the advertising expenditures on television and radio represented 42.8% (HK$15.3 billion) and 2.7% (HK$985 million) respectively of the total HK$35.9 billion advertising expenditure on the media in 2003. The domestic free television programme services accounted for 38.2% of the advertising expenditure (HK$13.7 billion) and pay television accounted for 4.6% (HK$1.65 billion).

With the proliferation of broadcasting services, the advertising expenditure on the television market experienced a steady growth in the past years.

Figure 12 : Advertising Expenditure on Television

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In 2003, the actual advertising revenue earned by TVB was HK$1.7 billion⁹. The actual advertising revenues for the other licensees are not publicly available.

The advertising expenditure on the sound broadcasting market, on the other hand, show some fluctuations from 2000 to 2003.

Figure 13 : Advertising Expenditure on Radio

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⁹Source : TVB Annual Report 2003 – turnover for the business segment of terrestrial television broadcasting.