Jenny Chan 陳詠欣
Nov 24, 2014

HKTV's online TV alternative starts strong, but will it last?

HONG KONG - Following the formal launch of the embattled Hong Kong Television Network (HKTV) on 19 November, more than 30 advertisers have confirmed bookings on the platform so far.

An OOH ad promoting the HKTV launch
An OOH ad promoting the HKTV launch

They include McDonald's, Sony, Canon, KFC, Hong Kong Broadband Network and Mentholatum. For a new platform without a track record, HKTV is of the view that the current ad booking status is "satisfactory", according to Jessie Cheng, associate director of corporate communications at HKTV.

The online station is selling a 15-second spot at HK$30,000 per episode.

Some of these advertisers are buying ads "as a show of support", commented Margaret Ho, deputy general manager at Starcom MediaVest Group Hong Kong, considering how hard a battle HKTV chief Ricky Wong had to fight for a free-to-air TV license that was subsequently and surprisingly rejected.

It may be heartwarming that some advertisers are making ad-placement decisions based on an emotional desire to show support rather than purely commercial factors. However, industry observers warn that emotions can only last for so long, and that HKTV still has to work hard for its programming to be attractive to brands, and for its business model to be sustainable.

There's little doubt local viewers crave more choice. They have often complained that local drama plots are "predictable and boring" and that local news coverage contains hints of pro-Beijing self-censorship. This has led to people nicknaming TVB 'CCTVB'. Hong Kongers definitely want alternatives, and so do the brands and advertisers.
 
In future, HKTV will have three key income streams after its 19 Nov launch: advertising, online shopping and overseas distribution rights. HKTV has already completed transactions with broadcasters in Malaysia, Singapore, Australia, New Zealand and China. 

As for HKTV's online shopping, this phase will commence one to two months from now featuring 333 brands from Hong Kong, Japan and Korea. It is a "clever way for people to 'stay on screen' since Hong Kongers are notorious for multitasking and being fickle with their online activities", said Ho. "Three-minute enthusiasm" is how locals term it.

Combining online broadcasting and online shopping will give people not just content, but "reasons to buy". This is the first time that such a business model has appeared in Hong Kong, and will arouse the interest of consumers, said Ho, even if Wong himself admitted it was an act of desperation "to earn money to pay the bills".

Wong has boasted in local media that because HKTV viewers are required to register with their email address, age and income, the company can provide advertisers with direct evidence of the effectiveness of their advertising.

"This is a good alternative to optimise media investment," said Ho. "HKTV's advantage is its flexibility as its team spirit for the platform to survive is especially strong, mirroring Wong's refusal-to-lose determination."

For media agencies as they negotiate placements (not just ad placements but even product placements) on behalf of clients in the future, the implication is that they also have to up their game in terms of measurement now that online shopping data will add further complexity.

"I think HKTV's future revenue relies more on online shopping than advertising," KK Tsang, founder of The Bees Group, told Campaign Asia-Pacific. The potential of ad revenue on internet TV is much lower than free TV, as online audiences are less tolerant of long commercial breaks, so HKTV cannot demand high prices for airtime on the internet, he explained.

 

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