The Hong Kong Broadcasting Scene - 5 Broadcasting Revenues

picture 5.1 Advertising Revenue 5.2 Subscription Revenue picture
14 Hong Kong as a Stepping Stone into the Mainland Market13 Other Licensable Television Programme Services12 Hong Kong as a Regional Broadcasting Hub11 Compliance with Regulatory Requirements10 Advertising Modes9 Programmes for Minority Ethnic Groups in Hong Kong8 Programme Genres7 Programme Sources6 Investment in TV Industry5 Broadcasting revenues4 Penetration of Different Broadcasting Services3 Transmission Modes2 The Broadcasting Landscape1 History

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 come from sales of advertising spots within programme breaks. The domestic pay television programme service licensees, on the other hand, derive their incomes mainly from subscription fees while sales of advertising spots are secondary incomes.

5.1 Advertising Revenue

According to the estimate of Nielsen Media Research, the advertising expenditures15 on television and radio accounted for 41% (HK$16.7 billion) and 2.6% (HK$1.05 billion) respectively of the estimated total HK$40.7 billion advertising expenditure on the media in 2004. The domestic free television programme services accounted for 34.4% (HK$14.0 billion) of the estimated total media advertising expenditure and pay television, 6.6% (HK$2.7 billion).

In 2004, the actual advertising revenue earned by TVB was around HK$2 billion16. The actual advertising revenues for the other licensees are not publicly available.

The changes in estimated advertising expenditure from 2000 to 2004 on television and radio are shown in Figures 13 and 14 respectively.

Figure 13 : Estimated Advertising Expenditure on Television

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Figure 14 : Estimated Advertising Expenditure on Radio

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15   The advertising expenditure was measured based on published rate cards. Actual expenditure might differ because the discounted rates were not taken into account.
     
16   According to the TVB's annual report 2004, the turnover from the terrestrial television broadcasting business segment was HK$2,007 million, which comprised predominantly local advertising revenue.

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