Broadcasters fight tough ad regs

ATV, TVB urging Broadcasting Authority to loosen laws

Strict advertising regulations are causing problems for broadcasters in Hong Kong and mainland China.

Hong Kong’s terrestrials Asia Television (ATV) and Television Broadcasts (TVB) are urging the Broadcasting Authority to loosen regs that dictate what can be advertised and to relax program sponsorship and product placement in shows.

“The regulations do not reflect how the market operates,” says Stephen Chan, TVB’s external affairs controller. “This is less about the advertising slowdown in the economy than it is about principle.”

Commercials for firearms, fortune-tellers, undertakers, betting, nightclubs, massage parlors and escort services are banned, while alcohol, tobacco and medical ads tightly controlled.

Changes might boost TVB revs, after a decline in advertising coin last year contributed to a 23% profit slump.

TVB’s popular Chinese-lingo channel, which has a primetime ratings share of more than 70%, accounts for 67% of local television advertising, according to ACNielsen Media Intl. ATV’s Chinese-lingo channel accounts for 23%. The rest of television advertising is divided between the two stations’ English channels and pay TV operator I-Cable Communications.

ATV and TVB’s licenses expire next year, and both have submitted proposals for renewal.

Meanwhile, Shanghai has slapped a three-month ban on all medical ads after the Shanghai Bureau of Industry and Commerce received unprecedented numbers of complaints about “unfounded or misleading claims about medical products and services.”

And despite last year’s dramatic 17% rise in ad revenues for China’s burgeoning TV industry, the tough new measures that restrict medical ads are kicking in hard.

The bureau’s stance marks a change in policy. In March, Variety reported that the State Drug Administration would ban many medical and health product ads at the end of this year. Bringing the ban forward will hit the ad industry harder, given that eight of the top 10 advertisers are pharmaceutical companies.

Concerns about bogus medical claims surfaced last year, when the State Administration for Industry and Commerce announced that during a one-day survey of TV advertising across more than 50 of China’s TV channels, over a sixth were “illegal.”