China's Inevitable Inflation
Advertisers and media buyers are bracing themselves for some steep rises in the price of TV airtime next year, particularly around shows geared towards younger audiences, in the wake of a series of regulations targeting drama and entertainment programming.
Recently announced restrictions on ad breaks during dramas and movies, due to come into force in January, will further fuel already soaring airtime inflation around highly sought-after shows and audiences.
Despite existing regulations limiting the length of commercial breaks in primetime, TV was still the only traditional media able to gain share of gross ad spend over the first three quarters of the year, according to media monitor CTR.
While most of the latest rules apply across the industry, the provincial satellite TV (PSTV) sector will be hit hardest, as entertainment shows form a core pillar of primetime schedules for leading channels.
These are popular with a younger, more female-oriented audience, a demographic prized by advertisers who are now waiting to see what changes channel owners will make to retain this distinctive viewer profile.
“There will be some money driven up to CCTV, and money driven down to local TV, as well as online video and outdoor LCD screens,” says SiewPing Lim, CEO of media agency OMD China.
“However, provincial satellite broadcasters are very resourceful. They can still maneuver their programming to minimize the impact of these rulings.”
Multiple content controls
Signs that Sarft, China’s broadcast regulator, was paying closer attention to TV content became apparent just before the 90th anniversary of the ruling Communist party in June, with an edict calling for more dramas dealing with historical themes to re-emphasize national values, so-called red dramas, which appeal more to men.
This was followed in October by restrictions on reality and variety shows, genres that have drawn fire for being negative and materialistic, while becoming a regular part of primetime lineups at the same time.
The success of Jiangsu PSTV’s ratings hit Fei Cheng Wu Rao (known in English as If You Are The One), a dating show where prospective male suitors are judged and rated by a panel of women, has triggered numerous copycats hoping to capitalize on its success.
Cutting down on ad breaks, especially in cluttered primetime environments, could bring more viewers back to TV, heightening the attractiveness of the medium to advertisers.
However, broadcasters will also likely experiment with shorter running times, as at present the ban only applies to dramas that are more than 45 minutes long.
Toning down controversial elements in entertainment shows while adding more factual and news content in evening time slots, as stipulated by Sarft, could also deter key demos.
Few places to go
Dramas are a mainstay for most mainstream channels in China, and the inflation created by restricting inventory will divert some money to other screens, both online and out-of-home.
This is unlikely to be a panacea however, as demand is increasing for these media as well, with more brands entering the market and emerging categories in particular driving up spend.
Popular online video sites for instance are also experiencing acute inflation caused by inventory shortages for key audiences, particularly in top-tier cities where online video consumption is highest.
“There may be more policies coming in, but we still see the overall ad market as very robust indeed,” notes Andrew Carter, president of investment management for major media buyer GroupM Trading China.
“The growth is there. The issue is will the inventory match that growth?”
This is an edited extract from content published in the Q4 2011 edition of The Asia Media Journal. The latest issue of The Asia Media Journal is available in full here.