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Agencies: decision on HKTV bad for marketers

Hong Kong media agencies have labelled a decision to deny HKTV one of the new free to air TV licences “disappointing” and a missed opportunity to give marketers more choice and bargaining power in negotiations.

Two free television licences were  issued to i-Cable’s Fantastic TV and PCCW’s HK Television Entertainment Company yesterday, but  HKTV’s application was rejected without any detailed explanation.

It became clear overnight the people of Hong Kong were highly critical of the decision, as was evident on facebook (an HKTV support page had received 340,000 likes by press time) and other social platforms, the advertising and media industry seems to share the view.

Wilson Wong, group head of PHD Hong Kong, described the result as “disappointing”.

“As media planners, we aim to help clients make good use of their above-the-line budget to achieve clients’ campaign objectives efficiently and effectively. We believe HKTV could uplift the competition and quality in TV market,” he said.

From the viewpoint of media buying, he said increasing competition empowers both advertisers and agencies with higher bargaining power, as TVB has been dominating the TV penetration. From the viewpoint of media planning, he suggested media agencies develop more creative partnerships with the new free stations and with HKTV when it’s fate becomes more clear.

Wong’s view was shared by most of the agencies Marketing spoke with today, including Paul Gibbins, managing director of Mindshare Hong Kong.

More choice for consumers, allows more flexibility for advertisers.

“As we enter the period for TV commitment clients with incremental spends or new money may find that they have slightly more negotiation leverage than in the past,” he said.

“While Now TV and Cable TV have the required content in the form of news, entertainment, sports and movies, to compete to win they will need local dramas. For any station to be successful primetime, drama is critical.”

Gibbins also pointed out that HKTV possesses a lot of content without any way to distribute.

“They need a distribution partner or partners, with digital being an obvious option,” he suggested.

Ray Wong, CEO of PHD Hong Kong said the exclusion of HKTV on the free-TV licence allocation this week means advertisers choices have been limited as HKTV is the one contender which put the heaviest focus on drama production among its rivals.

Asked if there is any particular reason for the failure, Wong suggested HKTV chairman and founder Ricky Wong (pictured) might have been a bit too “high-profile”.

“Individualism of a TV broadcasting company head shouldn’t outshine the company’s philosophy. I think a broadcast company should put audience’s interest as first priority and their objectives should be providing as much choice as possible for audience so as to fight against monopolisation of TV industry in Hong Kong.”

The government  has stressed in local media that the decision on the licences were based purely on merit.

The two media veterans from PHD Hong Kong advised HKTV to form strategic partnerships with Now TV and Cable TV to have its programmes broadcasted on both networks in order to achieve a win-win partnership.

Caroline Chan, managing director of Maxus agrees: “HKTV can consider program distribution by working with any existing platforms or open their own digital platforms, which would be welcomed by audiences and marketers as well, since viewing behaviour of programs has been changing.”

She went on to say audiences care more about quality of content than the platform.

“Of course, the earlier the better for HKTV to disclose their plan as this is the critical time for advertisers and agencies to plan their TV budget for the coming year.”

HKTV, said it had already invested over HK$300 million in the industry, laid off about 320 people with immediate effect right after the announcement. Its stock also plunged by 36%.

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