Not so happy campers

Big ad revenue losses for Hunan Satellite TV as its shows flop with viewers

Not so happy campers

Liu Shishi

In 1997, when Chinese provincial stations were dominated by monotonous, politically-correct programmes, Hunan Satellite Television launched Happy Camp, a weekly variety show featuring celebrity guests. It shot up the ratings, becoming so popular that it remains in production now.

Since then Hunan Satellite TV has produced many more prime-time hits like Happy Girl, a talent show in which viewers voted for the best female singer (in the closest thing China has had to a nationwide election). The network became the country’s second-largest behind CCTV, the national broadcaster. It was also the most profitable, thanks to its popularity among young viewers (a demographic preferred by advertisers).

We’ve written before about Hunan TV’s successful formula (see WiC38), which has been unabashedly populist in its content rather than aspiring to the highbrow.

But after years of winning the ratings war against competitors, Hunan Satellite TV seems to be struggling. For the first time in more than 10 years, the ratings leader has lost its winning streak.

“Everyone in the industry agrees that we are facing one of the biggest challenges in 10 years,” says a senior producer at the network. “The sense of crisis is back, which was unthinkable just six months ago.”

So what happened? Even though Happy Camp is still drawing big audiences, the network’s other leading slots have been losing ground to rivals. Its prime-time line-up in the first half was a disaster. The hugely anticipated drama Secret History of Princess Taiping, an historical epic about Zhou Dynasty Empress Wu Zetian, ended up being one of the lowest rated shows during the peak viewing hours of 7.30pm to 10pm.

It was replaced by a Korean soap opera Queen of Reversals. But it wasn’t able to live up to its name and reverse Hunan TV’s fortunes, says the Xinmin Evening News.

In fact, in the first half of this year, ratings for Hunan Satellite TV’s prime-time programming reached their lowest levels for the past decade. Not only did the network lose its pole position to Jiangsu Satellite TV, another regional satellite broadcaster, it sank to 18th place in the national rankings.

Analysts say while many networks have had slip-ups in the past Hunan Satellite TV got it badly wrong this year. Why? Industry observers say the Changsha-based company’s business model is to blame.

Unlike its competitors, the channel produces almost all of the shows it broadcasts, rather than license them from other studios.

That strategy means that it can profit both from advertising revenue as well as fees from syndicating the shows to other channels. It also generates revenues from internet streaming its own programming.

When Hunan Satellite TV was producing many of the country’s most popular TV shows, the business model worked to its advantage. But this year, when it has consistently missed the mark, the strategy looks more vulnerable.

Another factor in the channel’s fall down the viewing ratings is the growing popularity of online video. According to research cited by 21CN Business Herald, after a show is made available for streaming on sites like Youku, almost two- thirds of viewers prefer to watch it online rather than on television.

That has hit Hunan Satellite TV harder than most because the bulk of its viewers tend to be younger and more internet-savvy.

The slip in ratings is now jeopardising the network’s sales of ad slots. “As the leader of the pack, Hunan Satellite TV has enjoyed a huge edge in sales because advertisers paid a premium to get their commercials into the programmes. It wouldn’t be surprising that they made Rmb5 billion ($783 million) per year in advertising,” an advertising sales executive for the channel told Southern Metropolis Weekly. “But if it keeps losing viewers, that premium will go away. And we’re not talking about losing Rmb100 million, we’re talking about Rmb1 billion.”

The response is to revamp the schedule, moving forward the release of kung-fu epic Xuanyuan Sword. The new series, which features starlet Liu Shishi (see photo), has been doing well in the ratings since early this month. Another series Qin Chi, has also garnered favourable reviews. Improved numbers for the second half of the year could yet restore the advertisers’ faith in Hunan Satellite TV.

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