With a loss of 2.2 billion yuan in five years, "eating the old book" can't save Hong Kong TVB

Recently, TVB's hit drama "News Queen" has become popular.

Many people sigh that the 56-year-old TVB treasure knife is not old!

But the truth is cruel, TVB has lost money for 5 consecutive years.

How can the declining TVB save itself?

TVB, the full name of Hong Kong Television Broadcasts Limited, is the first commercial TVB television station in Hong Kong.

Since its launch on November 19, 1967, TVB has lasted 56 years.

The "News Queen" mentioned at the beginning of this article is one of the four Taiwanese dramas launched by TVB to celebrate its 56th anniversary.

The celebration of Taiwan with a TV series highlights the great significance of TV dramas to TVB.

This is indeed the case.

The high-quality TV series not only sent TVB to the top, but also left a deep impression in the hearts of the audience.

Jin Yong's drama "The Legend of the Condor Heroes" is TVB's most commendable work, and it is also TVB's first TV series to conquer mainland audiences.

In 1985, "The Legend of the Condor Heroes" was introduced to Chinese mainland for broadcast, causing a sensation, affecting the values and mate selection views of two generations in the mainland, and also becoming the collective memory of the post-70s generation in the mainland.

83 edition of "The Legend of the Condor Heroes" poster

Since then, TV series such as "The Legend of Deer and Ding", "The Legend of the Condor Heroes", "Dragon Babu", "Genesis", "The Story of Qin", "The Desire of the Golden Branch", "Rushing to the Clouds" and other TV series are also excellent works and have had a great influence in the mainland.

At its peak, TVB had more than 300 million household subscribers in Asia, Australia, Europe and the Americas, and was the only Chinese-language media in the world that could fully cover the Hong Kong, Macau and mainland markets.

In 2013, TVB's annual revenue was HK$5.686 billion and its profit was HK$1.738 billion.

Fame and fortune are both gained, and the scenery is for a while.

In 2000, 2005 and 2010, TVB made profits of HK$774 million, HK$1.18 billion and HK$1.33 billion respectively.

In 2014, it made a profit of HK$1.41 billion, and in 2015, 2016 and 2017, it made a profit of HK$1.331 billion, HK$500 million and HK$244 million respectively.

TVB's earnings data changed in some years

It was also from 2014 that TVB's profitability gradually declined.

In the past five years, it has lost money year after year.

According to the 2023 half-year financial report, revenue in the first half of this year decreased by 14% year-on-year to HK$1.56 billion, and net loss widened year-on-year to HK$407 million.

Since 2018, 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.

TVB's revenue and profit in the past five years

The capital market is the most sensitive, and the business declines, and the market value naturally shrinks sharply.

TVB market capitalization trend

In 2013, TVB's total market capitalization was HK$25.5 billion.

Ten years have passed, and only HK$1.56 billion remains.

TVB, why is it in decline?

Here, let's first take a look at how TVB flourished.

TVB is thriving, and there are reasons for its own efforts, but it is undeniable that there are also dividends of the times and the industry.

Let's look at the dividends of the times first.

The dividends of the times here refer to the "era gap" between Hong Kong and the mainland.

In 1985, when "The Legend of the Condor Heroes" was introduced to the mainland, at that time, the mainland was in the early stage of reform and opening up, the economy was just starting, and the film and television industry was not developed.

TVB's TV drama production level has long been skilled, and the TV dramas it has launched are extremely "advanced" and highly attractive to mainland audiences.

Judging from the timeline, TVB has successively launched dramas such as martial arts, workplace, business war, crossing, and palace fighting, and the theme is several "positions" ahead of the mainland.

The poster of TVB's time-traveling drama "Xun Qin".

This kind of "era gap" caused by concepts, themes, talents, etc., has made TVB eat all the dividends in the mainland.

However, with the continuous improvement of the level of film and television production in the mainland, the previous "era gap" has gradually smoothed out.

Zeng Zhiwei, who served as the general manager of TVB, said frankly:

15 years ago, he led the team to the mainland to share how to make a show, and now he is learning how to make a show with the mainland.

Here, you might as well compare "The Desire of the Golden Branch" and "The Legend of Zhen Huan".

In 2004, TVB's production of "Golden Branches Desire" landed on Hunan Satellite TV, attracting 200 million people to watch, with an audience rating of 2.82%.

"The Desire of the Golden Branch" created a precedent for palace fighting dramas, and is also regarded as the last peak of TVB dramas.

7 years later, the mainland-produced "The Legend of Zhen Huan" was launched, and the level of plot and service is no worse than "Golden Branches", and its influence far exceeds the latter.

Comparison of the Douban scores of "Golden Branch Desire" and "The Legend of Zhen Huan".

If you don't have an advantage in TV drama production, you will naturally not be able to eat dividends.

Let's look at the dividends of the industry.

TVB flourished in the golden age of television, and it will inevitably decline due to the passing of the golden age of television.

It's an indisputable fact that TV viewers are losing.

Although TVB still maintains a 77% share of the audience in Hong Kong, the ratings are not as good as before.

In 2010, the average ratings of the top ten TVB self-made dramas could reach nearly 30%.

Now, the annual highest ratings of self-made dramas are only more than 20%.

It was also from 2010 that TVB's profit growth began to slow down year by year, and in 2014, there was the first decline in net profit in five years.

This is in line with the trend of TV advertising revenue in Chinese mainland.

TV advertising trends in Chinese mainland Image source: China Industry Information Network

Interestingly, 2014 was the first year that TVB lost money, and it was also the first year that Internet advertising revenue exceeded TV advertising revenue.

This cannot be said to be just a coincidence.

The emergence of Internet platforms and changes in content distribution channels have led to the overall decline of the TV industry.

In Hong Kong, Hong Kong's Viu TV and the United States' Netflix challenge TVB's status.

In terms of content, the introduction of American dramas, Korean dramas, and Japanese dramas has robbed TVB's market share.

In recent years, TVB's revenue structure has changed

In addition, problems such as the shortage of talents and outdated production models have exacerbated TVB's predicament.

Zeng Zhiwei sighed in an interview with the media:

TVB is like the Titanic, it is a big cruise ship, and now everyone likes light things, is this cruise ship still useful?

How should TVB go?

The answer has been revealed, head north.

Going north to nugget the mainland market is the direction of TVB's reform.

First, co-production of film and television dramas.

The recently hit "News Queen" was filmed by TVB in cooperation with Youku and Alibaba.

The poster of "The Queen of News" on the Youku platform

According to previous news, TVB will also cooperate with mainland platforms to shoot four dramas: "Corporate Strongman", "The Cliff of Women and Heroes", "Criminal Investigation 12" and "Anti-Black Hero".

The advantage of co-production is that it can not only obtain generous investment support from the mainland, but also get closer to the mainland market, win a larger audience, and then obtain economic returns.

Second, co-produce variety shows.

As early as 2007, TVB cooperated with Hunan Satellite TV to produce "Dancing Miracle", with a total of 22 TVB artists participating.

Last year, TVB, Zhejiang Satellite TV, and video platforms jointly produced the reality show variety show "Infinite Transcendence Class", which sparked heated discussions and achieved good results.

In addition to earning a share of the co-production of variety shows, TVB can also take the opportunity to let more mainland audiences, especially young audiences, know and understand their own artists, driving TVB to enter the vision of more mainland audiences and expand the mainland market.

Third, the video platform is launched.

Youku, iQiyi, Tencent and other major video platforms have launched TVB zones or Hong Kong drama zones.

Since the premiere of the drama "Dream of Love" in 1967, TVB has produced more than 1,500 TV series.

The huge drama resources can bring a steady stream of income to TVB.

Fourth, live broadcast with goods.

TVB has launched Douyin and Taobao live broadcasts.

In the first half of this year, TVB and Taobao announced their cooperation, and TVB officially called this round of cooperation a major milestone in creating an e-commerce live broadcast, which is expected to bring tens of millions of Hong Kong dollars to the company.

TVB brings goods on the live broadcast platform

Although TVB has also begun to transform to the Internet and launched the online video platform myTV SUPER, the market in Hong Kong is still too small.

In fact, the mainland business has become TVB's largest source of profit, with nearly HK$160 million in 2022, mainly through copyright distribution and co-productions.

If we want to reverse the situation of declining revenue and profit loss, we still have to rely on the huge mainland market.

However, whether it is cooperating in the filming of TV series, variety shows, or live broadcasting, TVB's killer feature is still feelings.

To put it more bluntly, it is to "eat the old book".

However, it should be noted that consumer groups, especially Internet users, are getting younger, and the tastes and aesthetics of mainland audiences are also changing.

When the post-70s and post-80s generations in the mainland grow old, TVB may have no old money to eat.

If you eat your old book, you can't save TVB.