China's move to merge the sales department of city television
stations next month is a clear indication that all is not well in the
business.
Anecdotal evidence suggests that television spend is hardly as robust as
ACNielsen's adex figuresof 22 per cent for the first four months of the
year would suggest. The general prognosis is that multinationals are
spending far less this year. Regional economic uncertainties and the
almost rabid level of competition from local players in the mainland
have resulted in a general tightening of purse strings.
Which may explain the surprise move to restructure sales departments of
city television stations midway through the year. For too long, the
official attitude towards its television business has been to treat it
as a cash cow. Which it was for years, when China Central Television's
(CCTV) annual auction of its prime-time slots, down to five-second ones,
would generate astronomical sums for government coffers. The sums paid
provided a barometer of the industry's health.
But frantic bidding battles are more history than reality these
days.
The stark reality for CCTV is that it is in danger of seeing its
audience share and revenue streams diminish as satellite and cable
operators increase penetration levels.
The centralisation directive will naturally bring economic efficiencies
for the Government. It will also reduce competition, but possibly only
in the short-term, and again this will depend on how well the directive
is implemented nationwide.
But it doesn't address the more crucial issue facing CCTV - that of
building up audience and revenue streams - through quality programming.
As it stands, provincial operators are showing less inclination to
acquire CCTV programmes these days. The setting up of MindWorks, with
its brief to develop high quality programming for China, is a clear
reflection of the sizeable market gap which the national broadcaster has
yet to fill. For CCTV, the future is clear - change or lose out.
