Beating its rivals but losing to the times, TVB fades on Hong Kong entertainment stage

The former Hong Kong broadcasting superstar’s business improved slightly in last year’s fourth quarter

Key Takeaways:

• TVB’s advertising revenue rose 10% year-on-year in the fourth quarter of 2024
• Hong Kong’s former leading broadcaster had 1.9 million average monthly active users during the final three months of last year

By Lau Chi Hang

It was once Hong Kong’s undisputed broadcasting goliath, operating a near monopoly in the city’s TV market. But these days, Television Broadcasts Ltd. (0511.HK), or TVB, looks more like a faded version of the many superstars and beauty pageant contestants who have graced its sound stages over the years.

Facing a sixth year of consecutive annual losses, the broadcaster could only brag to investors that it expects to report achieving “significant positive EBITDA” for all 2024 and a positive net profit in the second half of the year, according to a fourth-quarter business update released late last month. 

The updated showed the average rating for TVB’s flagship Jade channel was 17.1 points during the quarter, down 0.1 point year-on-year, while its other channels were down by larger amounts ranging from 1 point to 2.1 points. The 1.9 million average monthly active users for its OTT Streaming business was also down by 100,000 viewers year-on-year.

Despite those declines, a 10% year-on-year rise in quarterly advertising revenue helped TVB to log a slight improvement in its full-year results. However, a closer look shows the positive net profit the company boasted of in the second half of the year excludes extraordinary one-off items.

While TVB may be pleased with its improving performance, investors don’t necessarily appreciate its accomplishments. The company’s stock was unchanged after the data was released on Jan. 23 ahead of the long Lunar New Year holiday. What’s more, the shares have lost a quarter of their value from their peak last year.

Changing times

TVB was founded in Hong Kong in 1967, when Hong Kong consumers still had limited spending power and entertainment was a luxury for many. Capitalizing on its popularity as a traditional free-to-air broadcaster, the company quickly found a place in many people’s living rooms as a primary leisure activity.

Its birth at the right time, combined with its strong sense for what viewers craved, helped TVB to quickly become Hong Kong’s most popular TV station. It went on to ride Hong Kong’s rapid economic rise in the 1980s and 1990s, in lockstep with China’s own expanding economy, to become not only the choice of Hong Kong viewers but also among Mainland Chinese starved for entertaining programs. As that happened, TVB became a cash cow flush with advertising revenue that kept growing every year.

But times have changed as advancing technology provided new options for an increasingly affluent populace that could afford such alternatives. The rise of video games, popularization of computers and smartphones, and the rise of the internet and social media all begat new forms of entertainment to compete with traditional TV. As people flocked to those new choices, TVB, like many of its Western peers, faded from its former glory.

Flash in the pan?

How many people still remember former industry giants like Kodak, Nokia and Ericsson? Only a few such enterprises can stand the test of time, which requires a rare ability to keep up with changing consumer preferences and make constant adjustments. At nearly 60 years old, TVB doesn’t seem destinated to become one of the longer-term survivors.

The company’s biggest strength has been its ability to create popular drama series. It used that skill for years, propping up its ratings with the latest popular shows. But that formula is losing its draw among a younger generation that no longer flocks to such clichéd dramas. At the same time, older audiences that enjoyed such programs are gradually dying out.

One factor that propelled TVB for longer than most similar TV stations was the rise of the adjacent Mainland Chinese broadcasting market. That market was largely filled with low-quality choices in the 1980s, 1990s and early 2000s, including programs packed with ideology and patriotic story lines.

In such a field, TVB emerged as a breath of fresh air for many viewers getting their first taste of Western-style programming. But as Chinese Mainlanders grew increasingly affluent, their tastes and entertainment requirements became increasingly selective. At the same time, certain Mainland TV stations could better understand people’s needs and sensibilities, allowing them to create programs and dramas more suited to local tastes. As that happened, TVB gradually lost its halo in the Mainland market.

At the end of the day, TVB is still a Hong Kong company with a core audience of just 7 million people to fund most of its operations – a tiny speck compared with the more than 1 billion viewers on the Mainland.

Accumulating losses

An unfortunate turn involving several years of losses finally forced TVB to acknowledge it needed to change its act and start reforming. As one of its first new moves, the company began launching online shopping platforms with names like Ztore, Neigbuy and Big Big Shop. But those efforts failed to take much business from its biggest rival, HKTVmall, let alone challenge other online shopping giants across the border on the Chinese Mainland. As a result, TVB ultimately merged Ztore and Neigbuy, laying off 100 staff in the process.

The company also caught on to the potential of livestreaming e-commerce by watching Chinese influencers sell huge volumes of products on internet shopping platforms. Seeking to tap into such riches, TVB joined with e-commerce giant Taobao in 2023 by putting some of its actors and actresses online to peddle goods via livestreaming e-commerce. But such efforts don’t appear to be bearing much fruit, based on the fact that TVB rarely discloses related sales data. After all, TVB celebrities are no longer the superstars they once were for many Mainland Chinese consumers.

TVB also started working with popular video site Youku to produce online dramas. One resulting series, “The Queen of News” launched in 2023, has been a hit, bringing back a bit of TVB’s past glory. But one or two successful drama series hardly guarantees a rosy future. TVB failed to score a similarly popular series in 2024, leading some to guess that “Queen of News” might be little more than a flash in the pan.

When all is said and done, it’s quite fair to say the era of TV, which once propelled TVB to glory, is now in the history books. Thus, even if TVB’s business is showing slight signs of improvement, it’s difficult to see big things ahead for this company. After all, the internet era is all about speed and change – two qualities TVB has been slow to embrace.

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