TV ad rates to surge in China

31 October 2011

BEIJING: Television advertising rates may rise rapidly in China, as the country's authorities order a reduction in the number of shows on satellite stations providing "excessive entertainment".

Under new rules issued by the State Administration of Radio, Film, and Television, the government regulator, limits will now be placed on shows that are "low taste" or deliver "excessive entertainment".

These include reality series and talent contests, game shows, talk shows, and content covering dating or marital problems, as featured on any of the 34 satellite channels currently operating.

From early 2012, only nine such offerings can be aired daily between 7:30pm and 10pm, versus an average of 17 at present, with individual stations restricted to two related broadcasts per night, lasting no more than 90 minutes in total.

Additionally, just ten talent contests can run a year, with each one representing a different skill. Moreover, audience surveys and ratings must not be the main reason to commission a particular programme.

"Satellite channels are mainly for the broadcast of news propaganda and should expand the proportion of news, economic, cultural, science and education, children's, and documentary programming," SARFT said.

Given the existing widespread duplication, such as that between Super Girl from Hunan Satellite TV and Super Idol on Changchun TV, big schedule changes are likely, with some media owners seeing ad sales decline while competition heats up in popular shows.

"The administrative action might intervene in the industry, leading to economic effects," said Yu Guoming, a communications professor at Renmin University.

GroupM, the media arm of WPP Group, believes the rivalry for spots in remaining entertainment-led series, like Day Day Up and If You Are the One, has the potential to push rates up substantially. Inflation of 15% was already expected for 2011.

"We're predicting inflation anyway, but the regulations may spark more of a bidding war," Andrew Carter, GroupM's president of investment management, told the Wall Street Journal. "For every one hit show, there are a dozen copies, and this will certainly cut them out."

Jeremy Goldkorn, founder of Danwei, suggested the core motive might be to enhance the position of China Central Television, the government's main outlet, which could also see its rates increase.

"When they clamp down on the provincial stations, that always helps preserve CCTV's viewership," he said.

Data sourced from Wall Street Journal, China Daily, the Guardian; additional content by Warc staff