Media agencies reckon the new directive, to come into effect on January 1 next year, could reduce airtime opportunities for marketers by between 30 and 50 per cent. Taking out this amount of capacity could send prices skyrocketing 60 to 100 per cent. The issue is complicated by China's independent brokers - who number in the thousands, literally - who might swarm into the market en masse to try to buy up as much airtime as possible in the hope of pushing prices even higher. The order does play into brokers' hands of turning around a quick buck with a far from mature marketplace.
National broadcaster China Central Television's auction for 2004 prime spots next month should provide an indication of how events could unfold when the directive is introduced.
What is almost certain is that CCTV and Beijing TV will follow Sarft's directive. The size of their operations and their close proximity to the centre of the country's political power will make it difficult for the pair to ignore Sarft. But don't expect China's far-flung stations and channels, which sacrificed official subsidies to foster an entrepreneurial spirit as China opens up under WTO rules, to toe Sarft's line. That is unless Sarft carries a very big stick indeed.
While chaos is on the cards, the longer-term expectation is that a more mature TV market could also develop in the absence of a viable alternative for mass market campaigns. Print is in high demand despite the lack of audit data and major Chinese internet portals have sold out inventory, judging by the skyrocketing stock of one of the players, Netease.
All this could lead to a maturing of local advertisers' mindsets. Currently enamoured with frequency, the scarcity of TV advertising spots may well bring about an appreciation of ratings points. If so, this augurs well for the multinational media agencies, which have the necessary tools to calculate effectiveness and recommend optimal schedules based on the objectives set out by advertisers. It also means a migration of ads to other dayparts, which will no doubt ease current demand for prime-time only slots. While the improvements are welcomed, it is worrying to see Sarft wading in yet again. Sarft must understand that market forces of supply and demand rather than a heavy-handed directive are more effective in transforming an industry. And the television sector is no different. Seeing that Sarft's previous efforts in reshaping the industry have been far from successful, what guarantee has the regulator that things will be different this time - especially with the added threat of chaos hanging overhead?
