CCTV's famous annual national bidding came to a close, and it is
clear that China's once all-powerful national television channel is
faced with a stark reality - the need to change rapidly and become more
market-driven, or risk a diminishing audience share and revenue stream
from advertisers
Two insights can be drawn from the recent bidding process. First, CCTV
is changing the way it 'auctions' its airtime. It no longer requires
advertisers to bid for a full year period - rather, they have moved to
bidding for spots on a two-month basis.
Historically, advertisers often bid astronomical sums to secure annual
positions in CCTV's highest-rated time slots. However, many of those
successful bidders failed to follow through on their commitments - in
some cases because they went out of business.
Clearly, CCTV is hoping that increased flexibility in the bidding
process will attract advertisers who, in the past, were unable to make
the full-year budget commitments required to secure top time slots.
Second, demand has slowed, at least in the first quarter. In previous
years, CCTV would have already sold most, if not all, of its top prime
time slots at this point. But this year, there is still a significant
number of slots available.
This is a direct result of advertisers looking to alternative media
solutions and that CCTV may no longer be seen as the only national
advertising vehicle.
Provincial TV owners, who once meekly followed the lead of CCTV, are
starting to act more aggressively and commercially driven. This was made
obvious by recent improvements in programming quality.
Provincial TV operators have historically broadcast a large portion of
CCTV programmes. But increasingly, they are acquiring more appealing
programmes from independent producers, as well as investing in unique
original productions.
Improved programming leads to improved ratings, and advertising budgets
will follow - often at CCTV's expense.
China's entry into the WTO is expected to open the entertainment and
programming market, and hence, competition.
Further increasing the pressure, strong overseas Chinese channels will
continue to fight for share in the China market. Although the door is
not yet fully open for channels like Phoenix TV, Sun TV and Macau TV,
they will nevertheless continue to make inroads.
But the news is not all bad for CCTV. It is still the overwhelming
leading national station in China. It has a strong reputation with TV
viewers throughout the country, and it has strong financial resources.
But it must reposition its brand and better leverage its strengths to
succeed in the changing media environment. Some examples:
- News reporting - CCTV arguably has the best team of reporters across
China. The country still tunes in to CCTV nightly for the latest news.
This is a core strength, but should be marketed better and perhaps
extended more aggressively into other programme formats, such as
reality-based drama productions.
- Business programming - CCTV's business and economics channel has
developed well in 2000 and it has quickly become a recognised authority
on business news. Further development of this channel will be key to
future growth, especially as China's increased integration into the
world economy will be of keen interest in the years to come.
- Sports programming - CCTV's scale and financial resources enable it to
purchase or produce sports programming, including the Olympics, the
European Cup and NBA live broadcasts.
- Public service - although this type of programming is not necessarily
revenue-generating, CCTV can use public service programmes to build
viewer loyalty.
Enlisting advertiser support for the development of public service
programming is one way to capture the resources required to improve
production quality.
The winds have changed direction for CCTV in China. The question is
whether the station will move with or against these forces. Some
developments will be positive for CCTV; others will no doubt be
negative.
CCTV can have a strong future, but it will require new thinking and new
approaches that better reflect the needs of both audiences and
advertisers in China. That would be in everyone's interest.
