China tightens its IPTV foothold
03 April 2012
With consumer income and retail sales booming, multichannel TV adspend is reaching new highs. But its advancement is not without its pitfalls, says Simon Twiston Davies
There are more than 420 million non-terrestrial television connections in Asia-Pacific with 203 million of them in China alone – almost 50% of the total.
Half of all Chinese homes receive multichannel TV; CSM Media Research data from 153 of the country’s cities shows that 72.3% of all viewing is to multichannel TV. With rising consumer income and soaring retail sales and economic growth, total advertising in China hit $46.5bn in 2010 with TV adspend reaching $27.4bn, according to data from GroupM. Its forecast figures for 2011 predicted total advertising to grow to $52.7bn, with TV adspend accounting for $30.2bn of that figure, surpassing Japan as the largest market in Asia-Pacific.
In line with the robust conditions, bids for the latest annual TV ad auction from China Central Television (CCTV) have hit a high – it received bids from 245 firms totalling CNY14.3bn ($2.2bn) for the 2011 sale, 12.5% higher than 2010.
Even with impressive domestic numbers, major players are looking beyond the borders. Reuters has recently announced a new deal with CCTV to distribute the station’s content to more than 700 broadcasters across the US, Europe, Asia and Africa. The network is also planning to open studios in Washington and Nairobi.
But not all platforms are meeting with success. IPTV reached 50 million nationwide subs at the end of 2010 with advertising revenues increasing 11.1% from $3.6m in 2009 to $7.8m in 2010. However, the market still faces issues such as policy constraints, undeveloped business models, bandwidth issues and lack of content. There also needs to be a resolution to the ongoing standoff between broadcast regulator SARFT and telecoms regulator MIIT over control of the converged network.
Traditional television still reigns supreme, but with 300 million Chinese viewers watching video online at the end of 2011 and ongoing advancements in technology, online video is likely to progress beyond the linear broadcasting model. And Chinese online video sites are becoming increasingly sophisticated in how they acquire both international and domestic licensed programmes and commission relevant content.
Simon Twiston Davies is chief executive of CASBAA