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
Figure 14 : Estimated Advertising Expenditure on Radio
||The advertising expenditure was measured based on published rate cards. Actual expenditure might differ because the discounted rates were not taken into account.
||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.