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Hunan TV Profits from Programming Responsive to the Financial Crisis
THE global financial crisis has swept most industries in China since the end of 2008; of course we assume the media business couldn’t escape this nightmare. It has certainly been a blow to many media outlets in China that survive mainly or partly by relying on advertising income. According to CTR Market Research, advertising spending in China edged up only two percent year-on-year in the first quarter of 2009, the smallest increase in ten years. But there’s a glaring exception: the case of Golden Eagle Broadcasting System (GBS), a media conglomerate that owns Hunan TV. Sheng Boji, its deputy editor-in-chief, says the company’s advertising earnings reached RMB 1.266 billion in the first half of 2009, up 20.7 percent over the same period of last year, and the advertising revenue from its hottest program “2009 Happy Girls Contest,” a kind of local American Idol, has set a record of over RMB 100 million. We can’t help but wonder, how can the media in less-developed Hunan Province make it under what everyone else acknowledges are harsh conditions?
Sheng was at the time making an appearance at the 2009 Asian Media Forum in Changchun, capital city of northeastern China’s Jilin Province. The annual event was launched in 2003 by the Asia Media Research Center, an academic research organization jointly founded by the Communication University of China and the Korea Foundation for Advanced Studies. This year it spotlighted problems and opportunities left for the media in the wake of the financial crisis. Tens of high-ranking government officials, media experts and experienced staff from big-name domestic and foreign communications giants presented at the conference, exchanging their ideas and contributing practical solutions for navigating the economic storm.
The Lipstick Effect
Social wisdom and collective experience suggest that people seek cheaper means of entertainment, like watching TV or movies, browsing websites or reading magazines, to alleviate the pressures of daily life in these troubled times. Called the “lipstick effect” by experts in social research, it is also confirmed by statistics. In the first half of 2009, book sales in the domestic market increased by 20 percent, and the box office in China’s big and medium-sized cities totaled RMB 2.3 billion, representing a 35.29 percent increase in movie-going over the same period in the previous year.
However, seeing an opportunity is one thing, while taking it is another. How does the media produce “lipsticks” in the shades preferred by consumers?
“First and foremost, we never stop investigating what they want to watch. For example, currently many people are grappling with unprecedented financial pressures, so we intentionally set about making some programs which not only pleasantly distract and entertain people, but also comfort, encourage and support them in overcoming temporary difficulties,” says Sheng. “We did a lot of market research. The crisis has left more adults at home, either out of work or taking unpaid leave. Our producers were quick to purchase the broadcasting rights to Korean soap operas that are popular with this group of viewers. In addition, our producers especially created programming that engages viewers by allowing them to participate,” Sheng enthuses. Tracking revealed that in the first half of 2009, Hunan TV’s audience share of 45 to 54 year-olds registered 28 percent higher than the same period last year, moving from the ninth to the sixth highest nationwide, and that of people aged 55 to 64 rose 16 percent.
“To make best-selling ‘lipstick,’ another key strategy for us is that our producers base programming choices on their fit with advertisers as well as audiences,” states Sheng. “After the initial design of a show is done, our staff in the advertising department will consult with the advertisers to discern improvements in line with their opinions,” he elaborates. Using this strategy, more and more of their shows have reached most-watched status, which translates into increased profits. The programming successes have attracted the attention of more advertising decision-makers in businesses, including international giants like Coca-Cola, Pepsi and P&G.
Sub-prime Times and Niches
Besides broadcasting long-running crowd-pleasers like “Citadel of Happiness” in prime time on weekend evenings, Hunan TV never underestimates the potential of less choice time slots, and carefully conceives of programming for them. The efforts have paid off in spades. In the first half of 2009 its afternoon viewership (13:00 to 17:30) and those who tune in by late evening (22:00 to 24:00) accounted for 4.67 percent and 5.37 percent respectively of the national total, both the highest.
Why give up on a good thing? According to Sheng, the GBS has repositioned its subordinate TV stations to meet the demands of different subgroups, making each station professionally attuned to its niche viewers. For example, the TV drama channel focuses on TV series appealing to retired people and men. The cartoon channel provides popular animated series and movies, as well as creative and educational shows, to make it the first choice of most children around the country. In this way, different channels attract people of different ages with different interests, but cover the whole spectrum. And as the staff gains more experience, they build even more detailed and intimate pictures of the niche audiences they court. A virtuous circle of success has formed composed of professional stations fending off the vicious cycles of failure spawned by the international financial crisis.
Of equal importance to increased income is reduced expenditure. “Since the beginning of 2009, we have merged the advertising departments of our affiliated TV channels and other media into one advertising section, gaining us resource efficiency,” and this, notes Sheng, “avoids waste and strengthens communication.”
Again, the decision proved sound. More and more viewers have tuned in, luring more advertisers. Under unfavorable economic conditions, Hunan TV Station keeps producing miracles.
Love for Fun a Perpetual Opportunity
The success of Hunan TV and GBS as a whole may be taken as confirmation of the substantial demand generated by the huge Chinese market. Appetites for recreation and distraction in fact grow, instead of fall, in times of economic turmoil. In the case of China, where the people, 1.3 billion of them, are getting better-off and more sophisticated, mass media remains a gold mine not yetfully explored.
When an increasing number of Chinese look for foreign movies on the Internet, often grappling with poorly translated subtitles, they are sending the message that their need for fun and information is not sated, suggesting vast untapped opportunities for the media industry, in and out of China.
THE global financial crisis has swept most industries in China since the end of 2008; of course we assume the media business couldn’t escape this nightmare. It has certainly been a blow to many media outlets in China that survive mainly or partly by relying on advertising income. According to CTR Market Research, advertising spending in China edged up only two percent year-on-year in the first quarter of 2009, the smallest increase in ten years. But there’s a glaring exception: the case of Golden Eagle Broadcasting System (GBS), a media conglomerate that owns Hunan TV. Sheng Boji, its deputy editor-in-chief, says the company’s advertising earnings reached RMB 1.266 billion in the first half of 2009, up 20.7 percent over the same period of last year, and the advertising revenue from its hottest program “2009 Happy Girls Contest,” a kind of local American Idol, has set a record of over RMB 100 million. We can’t help but wonder, how can the media in less-developed Hunan Province make it under what everyone else acknowledges are harsh conditions?
Sheng was at the time making an appearance at the 2009 Asian Media Forum in Changchun, capital city of northeastern China’s Jilin Province. The annual event was launched in 2003 by the Asia Media Research Center, an academic research organization jointly founded by the Communication University of China and the Korea Foundation for Advanced Studies. This year it spotlighted problems and opportunities left for the media in the wake of the financial crisis. Tens of high-ranking government officials, media experts and experienced staff from big-name domestic and foreign communications giants presented at the conference, exchanging their ideas and contributing practical solutions for navigating the economic storm.
The Lipstick Effect
Social wisdom and collective experience suggest that people seek cheaper means of entertainment, like watching TV or movies, browsing websites or reading magazines, to alleviate the pressures of daily life in these troubled times. Called the “lipstick effect” by experts in social research, it is also confirmed by statistics. In the first half of 2009, book sales in the domestic market increased by 20 percent, and the box office in China’s big and medium-sized cities totaled RMB 2.3 billion, representing a 35.29 percent increase in movie-going over the same period in the previous year.
However, seeing an opportunity is one thing, while taking it is another. How does the media produce “lipsticks” in the shades preferred by consumers?
“First and foremost, we never stop investigating what they want to watch. For example, currently many people are grappling with unprecedented financial pressures, so we intentionally set about making some programs which not only pleasantly distract and entertain people, but also comfort, encourage and support them in overcoming temporary difficulties,” says Sheng. “We did a lot of market research. The crisis has left more adults at home, either out of work or taking unpaid leave. Our producers were quick to purchase the broadcasting rights to Korean soap operas that are popular with this group of viewers. In addition, our producers especially created programming that engages viewers by allowing them to participate,” Sheng enthuses. Tracking revealed that in the first half of 2009, Hunan TV’s audience share of 45 to 54 year-olds registered 28 percent higher than the same period last year, moving from the ninth to the sixth highest nationwide, and that of people aged 55 to 64 rose 16 percent.
“To make best-selling ‘lipstick,’ another key strategy for us is that our producers base programming choices on their fit with advertisers as well as audiences,” states Sheng. “After the initial design of a show is done, our staff in the advertising department will consult with the advertisers to discern improvements in line with their opinions,” he elaborates. Using this strategy, more and more of their shows have reached most-watched status, which translates into increased profits. The programming successes have attracted the attention of more advertising decision-makers in businesses, including international giants like Coca-Cola, Pepsi and P&G.
Sub-prime Times and Niches
Besides broadcasting long-running crowd-pleasers like “Citadel of Happiness” in prime time on weekend evenings, Hunan TV never underestimates the potential of less choice time slots, and carefully conceives of programming for them. The efforts have paid off in spades. In the first half of 2009 its afternoon viewership (13:00 to 17:30) and those who tune in by late evening (22:00 to 24:00) accounted for 4.67 percent and 5.37 percent respectively of the national total, both the highest.
Why give up on a good thing? According to Sheng, the GBS has repositioned its subordinate TV stations to meet the demands of different subgroups, making each station professionally attuned to its niche viewers. For example, the TV drama channel focuses on TV series appealing to retired people and men. The cartoon channel provides popular animated series and movies, as well as creative and educational shows, to make it the first choice of most children around the country. In this way, different channels attract people of different ages with different interests, but cover the whole spectrum. And as the staff gains more experience, they build even more detailed and intimate pictures of the niche audiences they court. A virtuous circle of success has formed composed of professional stations fending off the vicious cycles of failure spawned by the international financial crisis.
Of equal importance to increased income is reduced expenditure. “Since the beginning of 2009, we have merged the advertising departments of our affiliated TV channels and other media into one advertising section, gaining us resource efficiency,” and this, notes Sheng, “avoids waste and strengthens communication.”
Again, the decision proved sound. More and more viewers have tuned in, luring more advertisers. Under unfavorable economic conditions, Hunan TV Station keeps producing miracles.
Love for Fun a Perpetual Opportunity
The success of Hunan TV and GBS as a whole may be taken as confirmation of the substantial demand generated by the huge Chinese market. Appetites for recreation and distraction in fact grow, instead of fall, in times of economic turmoil. In the case of China, where the people, 1.3 billion of them, are getting better-off and more sophisticated, mass media remains a gold mine not yetfully explored.
When an increasing number of Chinese look for foreign movies on the Internet, often grappling with poorly translated subtitles, they are sending the message that their need for fun and information is not sated, suggesting vast untapped opportunities for the media industry, in and out of China.