Early indications point to China’s national broadcaster CCTV starting the year with a stronger hold on ratings relative to 2011, in contrast to some leading provincial satellite rivals who have suffered year-on-year declines.

The emerging picture, based on January ratings, comes in the midst of a series of tighter government controls on TV content and advertising, impacting in particular drama and entertainment shows that shore up audience appeal for many satellite channels.

CCTV, which relies less heavily on these genres, has seen its January audience share rise about 10%. Many provincial satellite operators have seen their hold on ratings weaken, with double-digit year-on-year drops for popular channels such as Anhui and Jiangsu.

Hunan TV, the most popular provincial satellite channel, experienced a smaller fall of about 4% in primetime.

The ratings volatility, which makes full-year projections more difficult, is in part due to broadcasters trying out new and in some ways experimental primetime schedules in the wake of the new regulations, and early losses may be regained as channels work out new formulas for success.

“News and drama formats will become more mainstream for some broadcasters, and they’ll begin to develop more economic, culture, youth education-focused programs," suggests Bertilla Teo, CEO of Greater China for media agency network Starcom MediaVest Group.

"New primetimes will start to emerge as drama and variety programs need to find other dayparts, such as weekends and lunch hours.”

Brands keep spending

Advertiser demand for satellite channels remains high however, driving up inflation for prime ad positions around remaining drama and entertainment content.

Inflation rates for provincial satellite channels were running at around 40% at the beginning of the year, Teo adds, compared with 20% for CCTV and 25% for local stations.

Provincial satellite stations with a near-national reach tend to attract a younger female viewing base, popular with many FMCG brands, unlike CCTV which tends to skew towards an older male audience.

“A high-rating program will still keep people in the commercial pod much better than a low-rated program will,” notes Seth Grossman, managing director of media agency Carat China.

“In that respect it doesn’t change anything. What it does change is that demand for prime position, especially first and last position, becomes even more intense.”

Audiences on the move

Some provincial channels experiencing the biggest ratings declines were those especially reliant on drama in primetime, the target of recent edicts from broadcast regulator Sarft, limiting ad breaks within episodes and applying strict quotas to imported series.

Sometimes ratings have risen elsewhere in the day, with some popular programs moved out of primetime to comply with the new rules. Evening slots are still in demand however, as they are seen to provide additional prestige as well as mass reach.

Some other channels also improved their year-on-year ratings performance, including Shanghai Media Group’s satellite channel Dragon TV on the back of China’s Got Talent, a popular show that seems to exemplify the kind of positivity in entertainment China's government is keen to encourage.

Viewers have also welcomed the ban on commercial ad breaks within dramas, and local channels in some larger cities have also started the year well with high-rating locally made productions.

Last-minute changes

Advertisers reacted to the changes, which were announced after many multinationals had approved annual media budgets, in a variety of ways. Some were able to secure additional funds though others trimmed back expansion plans.

Escalating regulation on TV, mirroring the start of a new five-year planning cycle, has also encouraged brands to diversify media plans into alternative options such as online video, where leading sites are ramping up content spend to bolster viewer numbers.

Such investments however, coupled with high demand, mean ad buys on online video are also becoming increasingly expensive.

“The biggest danger is that they’re raising their prices,” Grossman notes. “They shouldn’t be so complacent to believe that they’ve already got a cost advantage – they really don’t.

“Advertisers are not rejecting the TV environment. If the cost of online video doesn’t make sense, you’re just going to go back to TV.”