Broadcasting Authority Annual Report 2007-2008

5. Broadcasting Revenues and Workforce

5.1 Advertising Revenue

5.2 Subscription Revenue

The licensed broadcasting services contributed an estimated $6.4 billion²¹ to the Hong Kong economy, which represented around 0.4% of gross domestic product ("GDP") in 2007. There are two main sources of revenues for the provision of broadcasting services, viz. advertising and subscription. The incomes of domestic free television programme service licensees and sound broadcasting licensees mainly come from sales of advertising spots within programme breaks. The domestic pay television programme service licensees, on the other hand, derive their incomes mainly from subscription fees while sales of advertising spots remain secondary incomes.

In 2007, the broadcasting services engaged an estimated 8 400²² employed persons, representing about 0.23% of total workforce in Hong Kong.

5.1 Advertising Revenue

According to the estimate of CSM Media Research, the advertising expenditures on television and radio²³ accounted for 34% ($19.6 billion) and 2.9% ($1.7 billion) respectively of the estimated total $57.7 billion advertising expenditure in the media in 2007.

In 2007, the actual advertising revenue of TVB was around $2.4 billion²⁴. The actual advertising revenues for the other licensees were not publicly available.

The share of advertising expenditure in different media in 2006 and 2007 is shown in Figure 14. Changes in the estimated advertising expenditure from 2000 to 2007 on television and radio are shown in Figure 15.

Figure 14:

Estimated Advertising Expenditure in 2006 and 2007

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Figure 15:

Estimated Media Advertising Expenditure from 2000 to 2007

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²¹	Source : Company reports of major broadcasting licensees.
²²	Sources : Broadcasting licensees.
²³	The advertising expenditure was measured based on published rate cards. Actual expenditure might differ because the discounted rates were not taken into account. Advertising expenditure on television includes the advertising expenditure on domestic free television programme services and the domestic pay television programme service provided by HKCTV. Advertising expenditure on radio included the advertising expenditure on the sound broadcasting services provided by CRHK and Metro.
²⁴	According to the TVB's annual report 2007, the turnover from the terrestrial television broadcasting business segment was $2,373 million, which comprised predominantly local advertising revenue.