Losses at Hong Kong’s TVB widen to HK$406.7 million in first half of the year, as revenue from e-commerce drops amid post-pandemic slowdown

First-half losses at TVB increase by 81 per cent compared with same period in 2022
Company has posted losses for five consecutive years, hitting record deficit of HK$807 million in 2022

Hong Kong economy

Cannix Yau

Published: 7:45pm, 23 Aug 2023

Why you can trust SCMP

Losses at Hong Kong’s biggest free-to-air broadcaster widened to HK$406.7 million (US$51.89 million) in the first half of the year, as revenue from its e-commerce business plummeted amid a post-pandemic slowdown.

TVB announced the half-year deficit on Wednesday, which was an 81 per cent increase compared with the same period in 2022.

The company has posted losses for five consecutive years, hitting a record deficit of HK$807 million in 2022, following HK$647 million in 2021 and HK$281 million in 2020.

Hong Kong’s TVB to cut 5 per cent of staff, shave costs to save HK$260 million

E-commerce revenue dropped by 41 per cent to HK$271 million in the first half of the year, the broadcaster said, citing reduced demand for pandemic-related goods.

Despite broadcasting revenue growing by 5 per cent to HK$628 million, cash from mainland China operations declined 22 per cent to HK$313 million because of rescheduling of co-productions and certain dramas towards the second half of 2023.

But TVB said it expected a strong recovery in mainland operations in the second half of the year as many co-productions and dramas were set to be produced or aired across the border under a deal signed with Youku and Tencent Video.

The broadcaster said it had cut 6.5 per cent of its headcount since March, or 255 employees, which left it with 3,599 full-time staff. Costs will continue to be slashed to reduce operating expenses, according to the company.

Cable TV ending Hong Kong pay-TV service casts shadow over sector future: analysts

TVB recently raised HK$856 million in funding through a HK$700 million loan arrangement with CMC Inc and Young Lion Holdings, its major shareholder.

A HK$156 million convertible bond agreement with company Cardy Oval, a company controlled by property investor Goodwin Gaw, injected further cash. The bond can be converted to a predetermined number of shares in TVB.

Both deals provided substantial additional resources and liquidity for future operations and growth, the company said.

Hong Kong’s biggest free-to-air broadcaster TVB posts record HK$807 million loss

TVB has struggled with plummeting viewers and advertising revenues, with the pandemic adding to problems caused by the 2019 anti-government protests, when some internet users called for a boycott over what they called a pro-Beijing bias in its news coverage.

The latest losses added to recent bad news in the sector. Last week, Chinese-language newspaper Sky Post said it would stop its print edition next month after 12 years of operation. U Magazine, a publication under the same parent company, said its print edition would cease on August 31.

Grace Leung Lai-kuen, former lecturer at Chinese University’s school of journalism and communication, said TVB would continue to struggle as it was failing to retain local viewers while also having difficulties wooing mainland audiences.

“TVB wants to cater to both mainland and Hong Kong markets but in the end it has failed to please either of them as one side’s values and requirements conflict with the other’s,” she said.

Leung explained TVB’s continued losses, coupled with Sky Post and U Magazine becoming online-only publications, indicated a worsening trend in the survival of media organisations in the city.

“The outlook is very bleak for the city’s media organisations amid the economic slowdown. People’s habits have changed,” she said. “They have a lot of online options to get access to news and TV programmes. Local media will find it hard to retain viewers and readers.”