9 Nov 2009 11:30

Satellite TV stations to hike prime-time ad rates in 2010

Shanghai. November 9. INTERFAX-CHINA - Chinese satellite TV channels will raise advertising rates during peak hours starting in 2010, domestic media reported on Nov. 9.

Chinese satellite TV stations will increase advertising advertising rates between the hours of 7:30 and 11:00 p.m. daily by 20 to 30 percent on average in 2010, according to a China Business News report.

An employee with Hunan TV, a leading satellite TV broadcaster, confirmed to Interfax on Nov. 9 that Hunan TV's prime-time advertising fees will increase by 37 percent in 2010.

According to industry insiders, such rate increases are a result of recent satellite TV advertising regulations announced by the State Administration of Radio, Film and Television (SARFT) on Sept. 10 to take effect as of January 1, 2010.

Under the new regulation, commercial advertising is limited to a maximum of 12 minutes per program during peak hours, while the total duration of plug-in advertisements are not to exceed one and a half minutes. Satellite TV stations are also banned from airing TV shopping programs between 6:00 and 12:00 p.m.

James Hu, CEO of New York Stock Exchange-listed television shopping channel, Acorn International Inc., told Interfax previously that the new policy will decrease total advertising times, effectively increasing rates especially during prime-time.

According to Huang Shengmin, a professor with the Communication University of China, in the context of unstable economic conditions, advertisers are still cutting costs. Subsequently, rate increases will force some advertisers to cut spending on TV advertising altogether and turn to other channels, such as print media and new media.

Some experts are worried that the new SARFT regulations may cause an industry chain reaction.

Yuan Fang, a media expert with CSM Media Research, told Chinese media that the new SARFT mandate will disrupt existing 2010 advertising schedules, effectively resulting in approximately RMB 10 billion ($1.46 billion) in losses of advertising revenue in 2010.

At present, China's largest TV station, CCTV, has yet to announce its 2010 advertising rates for 2010.

CCTV will launch a tender on Nov. 18 during which advertisers will bid for prime-time advertising space.