"News Queen" is out of the circle, but TVB is still in the cold winter: it has lost money for five consecutive years and announced layoffs of more than 300 people
Recently, Hong Kong Television Broadcasts Co., Ltd. (TVB)'s new drama "News Queen" has successfully come out of the circle, with a Douban score of 8.2 points, and related topics have also been on Weibo hot searches many times.
Just when netizens lamented that the 56-year-old TVB "treasure knife is not old", the news of TVB's layoffs soon came.
Red Star Capital Bureau noted that on the evening of November 27, TVB announced on the Hong Kong Stock Exchange that the board of directors announced the restructuring of the TV broadcasting and e-commerce business, with a total reduction of more than 300 people, equivalent to 8% of the total number of 3,599 employees at the end of June;
All kinds of signs show that TVB, which was once brilliant, is now facing difficulties at the business level, and what is the reason behind this?
(a)
Performance continued to decline
TVB, the full name of Hong Kong Television Broadcasts Limited, is Hong Kong's first commercial TVB, founded in 1967 and listed on the Hong Kong Stock Exchange in 1988, the stock abbreviation Television Broadcasts (00511.HK).
From the perspective of revenue structure, TVB mainly has five businesses: TV broadcasting, OTT streaming, e-commerce, Chinese mainland business and international business; in terms of revenue in 2022, the above businesses contribute 36%, 10%, 24%, 19% and 11% to revenue respectively; it can be seen that TV broadcasting, e-commerce and Chinese mainland business contribute more to revenue.
Specifically, TV broadcasting refers to TVB's services provided by five free-to-air TV channels in Hong Kong to earn advertising revenue, as well as artist management services and music entertainment and publishing.
OTT streaming business refers to the provision of advertising and membership subscription services within the Hong Kong OTT App myTV SUPER.
The e-commerce business refers to the sale of home and lifestyle department stores in Hong Kong through Ztore and Neighborhood Residences, while the latter sells community group purchases, while in the Mainland, it sells goods through Douyin and Taobao Live.
Chinese mainland business refers to co-producing and licensing the distribution of film and television and variety show content with mainland streaming media companies, distributing content in the mainland through the Pile of Apps, earning membership subscription income, and operating accounts on multiple social media platforms in the mainland to provide MCN services.
International business refers to the distribution of TV broadcasting, video and new media content overseas, and the provision of membership subscriptions and advertising services within the overseas App TVB Anywhere.
According to the financial report, in the first half of this year, TVB achieved revenue of HK $1.56 billion, a year-on-year decrease of 14.28%, and many businesses declined compared with the same period last year.
Among them, the revenue of Chinese mainland business in the first half of this year was HK$313 million, down 22% year-on-year. The financial report explained that it was due to the fact that most of the schedules for co-produced dramas and synchronous dramas in 2023 will be concentrated in the second half of the year.
In the first half of the year, the revenue of the e-commerce business decreased to HK$271 million from HK$461 million in the same period last year, a year-on-year decrease of 41%. The financial report explained that it was mainly due to the return of Hong Kong consumers to their pre-epidemic shopping habits, coupled with the corresponding decline in demand for epidemic-related goods.
In terms of net profit, in the first half of this year, TVB lost HK $407 million, down 81.34% year-on-year. In addition, TVB has been mired in losses in recent years, and from 2018 to 2022, TVB's net profit attributable to the parent company has been negative for five consecutive years, with a cumulative loss of more than HK $2.2 billion.
In order to reduce expenses, TVB has closely carried out layoffs since the beginning of this year.
According to the semi-annual report, TVB reduced its staff by 255 (equivalent to 6.6%) in the first half of the year, and its general and administrative expenses also declined. In November this year, TVB announced that it would restructure its TV broadcasting and e-commerce businesses, cutting more than 300 employees in total, equivalent to 8% of the total number of employees of 3,599 at the end of June.
In the secondary market, as of November 30, the closing price of TV broadcasting was HK$3.31 per share, with a total market value of HK$1.451 billion, which has shrunk by more than 90% compared with its peak.
(b)
Where does the "disease" begin?
As a TV media, its business model mainly revolves around content production and traffic monetization.
In terms of revenue, if the timeline is extended, during the period from 2002 to 2013, TVB entered a period of rapid development, with revenue increasing from HK $3.162 billion to HK $5.686 billion, and since then, revenue has begun to decline, with total revenue coming to 2.724 billion yuan in 2020, and revenue has been cut in half.
The essence behind this is that TVB, as an old TV media, has significantly reduced the influence of content production in recent years, so the revenue obtained through traffic has also begun to plummet.
Taking TVB's advertising revenue as an example, it peaked at HK$3.998 billion in 2014 and then continued to decline, reaching HK$2.149 billion in 2019 and further dropping to HK$1.076 billion in 2020.
There are many reasons for the decline in the influence of TVB content.
On the one hand, in recent years, the Internet has ushered in rapid development, and consumers' viewing habits have also undergone profound changes.
Nowadays, users are becoming accustomed to obtaining entertainment and information through new media channels such as computers and streaming media platforms, which has led to a decline in TVB's ratings in the traditional TV sector and a decrease in advertising revenue.
On the other hand, TVB's competitive environment is also very fierce.
In recent years, the film and television industry in the mainland has ushered in rapid development, with a large number of new media companies and film and television production companies pouring into the market, bringing a variety of film and television content.
In addition, from its own point of view, TVB also has various problems such as old-fashioned internal management and the loss of high-quality talents.
In general, the superposition of multiple factors has led to the decline of TVB's revenue, and the decline in revenue has directly affected the cost control of enterprises, especially the cost control of content.
Excessive cost control will affect the quality of content production and affect later revenue, thus making TVB fall into a "dead loop" of revenue and investment.
As early as April 2021, Li Ruigang, then a non-executive director of the board of directors of Hong Kong TVB, also said in an interview with the media: "For so many years, TVB has been a point of view, only knowing how to save money, only talking about cost control, not thinking about strategy, no development vision, inertia all the way, and not laying out future growth momentum." ”
(c)
Can live streaming open up a new market for TVB?
In the face of declining influence, TVB is also constantly seeking innovation in its business model. For example, in recent years, live streaming has risen, and TVB has also actively entered the track to get a piece of the pie.
In April 2022, TVB began to operate the TVB Zhihu (Hong Kong-style selection) account on Douyin, and in May of that year, it opened two accounts, TVB Zhihu (Hong Kong-style strict selection) and TVB Zhihu (delicious selection).
Source: Douyin
In March this year, TVB announced its entry into Taobao Live, and in the mode of cooperation with the official account (TVB Zhixiang), many of its artists took turns to enter the official account live broadcast. Taobao provides product support and traffic introduction, and TVB's artists link the platform to cooperate with off-site publicity and drainage.
The first two broadcasts, TVB first-line stars (Chen Hao, Ma Guoming, Chen Minzhi, etc.) as anchors, and the popular film and television IPs "Rushing to the Clouds" and "Heart Storm" were held on March 7 and March 30 respectively, bringing consumers a wave of "memory killing". According to the data, the first live broadcast was watched by 4.85 million people, with a GMV (gross merchandise value) of 23.5 million yuan, and the second live broadcast was watched by 6.9 million people with a GMV of 73.2 million yuan.
However, there is also a view in the market that consumers can pay for feelings for a while, but it is difficult for TVB to attract consumers' long-term attention through feelings brands.
In the final analysis, live streaming tests the personal charm of the anchor, the selection of products in the live broadcast room, product prices, after-sales service and other aspects, and it is difficult to build the long-term competitiveness of TVB live streaming with simple feelings.
Judging from the financial report in the first half of this year, the revenue of the company's e-commerce business has declined sharply, which also shows that live streaming may also be a "difficult" bone for TVB.
brief summary
Obviously, for TVB, filming a good TV series is still the top priority at present, and only by rebuilding its own industry influence can it achieve more stable and long-term development.
The recent "News Queen" is a good start, and TVB still needs to prove itself with more high-quality works in the later stage.
Red Star News reporter Liu Mi
Edited by Yu Dongmei