Beijing drama as adverts banned during TV films

Written by The Financial Times | Updated: Nov 30 2011, 06:00am hrs
By Kathrin Hille in Beijing

China has banned advertisements during dramas and films on television in the Communist partys latest move to assert control over the countrys increasingly commercial media industry.

The rules, which come into effect in January, ban TV stations from running ads during films and drama episodes that run for 45 minutes or more.

Analysts said they could slow the worlds fastest-growing big advertising market next year, as the partys media campaign starts to have a commercial impact, or divert TV ad budgets to other media.

The State Administration of Radio, Film and Television, an arm of the propaganda department, has over the past two years increased its regulation of TV networks operations.

Last year it cut the amount of ads that stations could broadcast during prime time by a quarter.

This year it pushed networks to cut entertainment programming in favour of morally edifying shows. In one example, the regulator forced Hunan TV, Chinas most commercially successful provincial broadcaster, to take Supergirl, the nations first and most successful talent show, off air. Officials told the broadcaster that entertainment should take a back seat to values, responsibility and quality.

The regulator said that it wanted to fully utilise the TV networks to build a public cultural service system, raise the quality of public cultural services and guarantee the peoples basic cultural rights.

Analysts said the new rules could throw the industry into disarray. Zhao Yihe, head of research at Charm Communications, one of Chinas leading advertising agencies, said they were not going to be a lethal blow to TV stations, but that they would hurt their ability to make money. I expect this to shave 1 or 2 percentage points off the growth rate of TV advertising next year, which we originally forecast to be about 15 per cent, said Mr Zhao.

GroupM, the worlds largest media investment management group, predicted that Chinas television ad spending would hit Rmb201bn ($31.4bn) this year, up 13 per cent from last year.

Seth Grossman, managing director of Carat China, said the Aegis-owned media agency had not changed its 11.8 per cent growth forecast for the whole Chinese ad market in 2012 because advertisers were likely to move money to other Chinese media. The first impact will be on [TV ad] pricing. China is still a very high demand environment and thats a classic inflationary pressure. This doesnt take money out of the Chinese advertising market.

It will go elsewhere, he said, predicting benefits for local TV channels, online video outlets and outdoor advertising companies.

Mr Zhao said the new regulations would create short-term chaos as TV networks renegotiated advertising slots sold even this month.

Additional reporting by Andrew Edgecliffe-Johnson in New York

The Financial Times Limited 2011