Pages

Monday, August 27, 2018

MUST READ: TVB CEO Mark Lee details upcoming changes and development plans




Source: Hong Kong Economic Journal

TVB CEO Mark Lee did an interview with the Hong Kong Economic Journal yesterday where he talks about additional changes that will be happening at the station in the coming months.  In the interests of time, I'm not going to translate the entire article (there is a summarized version on HKEJ's website, which I've linked to above), however here are some main points from the article that are important to know.

Before I list out the main points though, need to preface with this -- several months ago, TVB already announced their intention to switch to becoming a multimedia digital platform, as they recognize that the way audiences consume their entertainment nowadays has changed significantly due to all the advancements in technology.  TVB feels that their previous business model is no longer viable in today's world and so they need to adapt to the changing times.  Of course, this is not something that will happen overnight, so TVB has been taking gradual steps over the past year with the goal of transitioning completely in the near future.  To this point, Mark Lee had actually done an interview several months prior where he had hinted at some of their plans, but at that time, he wasn't very specific on what exactly those plans would entail….with this interview, he lays it all out…

-  Currently, TVB is about two-thirds of the way done with their "digital transformation" plan and estimate that they will need another year or so to finish the remaining one-third.  They are estimating that they should be 100% up and running by the year 2020. 

-  In restructuring the company, there are 4 main areas of focus that will drive TVB's new direction:  increase revenue from advertising, control expenses through proper utilization of investments, increase the number of co-productions with other companies, expand Big Big Channel and other internet-related revenue streams (more detail on each of these aspects below).

-  Staffing – by the end of the year, the plan is to reduce 5% of current staff.  

  •   Total staffing right now is 3900 employees, so reducing by 5% means that approximately 200 staff will lose their jobs by the end of the year.
  •  This reduction is in addition to the changes they already made earlier in the year.  Here's how the numbers break down:
    • Looking at TVB's past annual reports, the number of full-time staff they employ is usually around 4000 or so – this includes all contracted staff in HK as well as overseas (meaning outside of HK – basically wherever TVB has a presence).  
    • As of June 2018, total staff count was 4333 – however after closing down the sports/athletic department and laying off staff from the international arm (TVBI) last month, total staff count as of right now is approximately 3900 people.  
    • If we take the reduction in staff that was made previously (reduction from 4333 to 3900), that's approximately 10% reduction in staff (rough estimate about 430 people)….couple that with the 5% reduction (estimate 200 people) by the end of the year, that would mean that this year alone, TVB would've laid off / fired 15% of their staff, which is obviously A LOT!  I hope those 630 people will be able to find work elsewhere!

-  As part of re-evaluating which areas they will be spending their money, it was determined that they are going to invest more resources (financial and otherwise) into their OTT platform, which includes expanding myTV Super and also increasing their footprint in other markets.

  • The money that was previously spent on their "traditional TV channels" (HK free-to-air channels such as Jade, Pearl, etc.) will be significantly reduced.
  • As announced earlier, there will be a gradual increase in co-produced series (Mark Lee didn't specify "who" they would be co-producing with but given TVB's recent direction in shifting to the Mainland market, the assumption is that the co-productions will be with Mainland production companies or streaming platforms).  In 2019, they plan on having 4 co-produced series and in 2020, they will increase that number to 6 series.
  • The co-productions will utilize more on-location filming (meaning outside of HK) as well as real location filming (no longer limited to filming only inside TVB City).
  • Since majority of filming will be done on location, there will be less need for filming inside their massive Tseung Kwan O facility, so they will be shutting down some of the studios within TVB City and in turn, either transferring the staff from those studios to different positions or getting rid of the positions altogether.
  • In terms of myTV Super, they will be switching to an On Demand format.  So instead of what they have now, where programming is arranged to air at a certain time, all channels will be replaced by On Demand service whereby the user can pick and choose what to watch and when to watch it.  This will help them further reduce their expenses by not needing to have their staff arrange programming, decide on scheduling and content, etc.
  • For overseas viewers, current format will be gradually replaced by TVB Anywhere (their OTT service outside of HK), which also means that whatever events were associated with overseas platform will also be reduced.  [It's a bit vague but the "events" they are referring to are things such as award ceremonies – hence their announcement earlier this year that they're cancelling this year's Astro Awards (in Malaysia) and Starhub Awards (in Singapore) – for those who were wondering, it sounds like based on the above, these cancellations will be permanent!].
  • The print edition of TVB Weekly Magazine will be discontinued.  Instead, they will switch to an on-line version, though no guarantees that the content will be the same.  This will help them save on printing and distribution costs.

-  Mark Lee emphasized that TVB is merely "changing with the times" and that these changes aren't being done haphazardly.  He said that their mantra is basically – "reduce where necessary, increase where necessary."  He said that despite the reduction in staff this year, they have actually hired more staff over the past years in areas that count, such as in the scriptwriting department, sales and finance, etc.

-  Increase revenue from ads

  • TVB's main source of revenue is (and always has been) advertising – which currently accounts for approximately 57% of their revenue. 
  • Mark Lee claims that the ad market for the first half of the year was "dismal" as there was only a minor increase of 2% revenue.  He said that many businesses were hesitant to place ads due to the retail market in HK not doing too well (most of their ad revenue the first half of the year came from businesses mostly specializing in beauty products, medicine, health and wellness options, etc.)
  • Mark Lee said that he is confident they will see more of an uptick in advertising in the second half of the year, since that is traditionally the "peak period" for advertisers to get their products out there due to all the holidays and such.  Also, TVB will be increasing the number of anniversary series this year from 2 series to 3 series, which means there will be additional opportunities for businesses to buy advertising during those "prime" timeslots.
  • Many companies are placing more emphasis on "new media" (i.e. web series, online streaming, etc.) nowadays due to the ease of getting content out to a wider audience in a quicker manner, plus there are fewer restrictions than with traditional media.  To this point, Mark Lee said that the advertising ratio of "new media" versus "traditional television" has reached 1:9 for the first time (meaning for every 1 ad placed on their internet platform, they would need 9 ads placed on traditional TV platform in order to make the same amount of money).  To this point, their goal is to increase the number by 2% by 2020. 
  • The first half of the year, advertising on myTV Super increased by a whopping 76%, which allowed them to turn a profit (where they were "in the red" previously), bringing in $85 million additional revenue for them.
  • In terms of OTT format, there is a huge difference between using the app and using set-top boxes to watch their content – the former (the app) is based on how long audiences watch the content for while the latter (set top box) is based on balancing advertising with subscription fees.  Mark Lee cited the following statistics:  starting first week in July, there was an average of 1.26 million audiences streaming their content each week, with each audience member watching on average for 16 hours – if they are able to increase this by 3% each year, those are more than solid numbers to attract advertising.

-   In terms of Big Big Channel, there are plans to expand it beyond a platform where audiences can interact with TVB artists.  Earlier this year, TVB already launched Big Big Shop, which is their e-commerce platform for consumers to buy regular products as well as TVB-related stuff (similar concept to what HKTV did with HKTVmall).  In the near future, they are thinking of expanding to include online games and competitions as well as other "value-added" services.

** Note:  In case you guys are wondering why there are so many "numbers" and "calculations" in this article – well, Mark Lee used to be (and I think still is now) an Accountant – and supposedly a mighty good one at that – so it's no surprise that he's always bringing up numbers and bottom line and revenue, etc.  Based on my personal experience (20+ years working with accountants at the companies I've been a part of), I find most of them are rigid and don't usually consider any circumstances outside of the numbers at hand (they are basically the anti-thesis of customer service).  When customers are late in paying their bills for instance, the accounting people I've worked with our pretty relentless in chasing down the money regardless of the circumstances, even if it means foregoing the relationship with the customer (in other words, they don't care if you offend the customer or if that customer will no longer be a customer because you you're unwilling to work with them or at least give them a little more time to pay or whatnot, they want the money regardless of the outcome).  In that light, not sure if TVB having an Accountant at its helm calling all the shots is a good thing or not….

18 comments:

  1. Skimmed through the article, it doesn’t meantion TVB going into online retail like HKTV Mall? If that’s what your email meant? Honestly this is just another in the coffin and TVB goin full mainland tv station and ATV-like. Lol accountant calling the shots is a recipe for diaster. All the things they’re expanding means nothing. Just means they will have more mainland actors rely more on outside mainland companies. HKers nor mainlanders will watch their shows. Hoe many overseas young generations are left who haven’t switched to Kdrama? Meanwhile my parents are watching old series...The only recent show they are addicted to is ViuTV’s Good Night Show King Maker singing contest! ViuTV has lots of attention and it’s noise has totally covered anything TVB is releasing right now! Only bad thing is that they shot themselves when forced to promote sponsored companies’ artistes by having them as judges (China 3D backlash).

    I wonobe surprised if TVB copies’ Ricky’s original e-commerce and tv station idea; they are low...

    ReplyDelete
    Replies
    1. The piece about the e-commerce thing is in the blurb about Big Big Channel (2nd to last paragraph at the bottom). There wasn’t a huge mention of it in this article, since they had already made the announcement previously. I actually read about it way early before the official announcement had come out and believe me, I was ticked...but luckily, none of the TVB people have even one iota of the business acumen and experience that Ricky Wong has so they most likely they won’t be successful, lol.

      Delete
    2. @sport: I absolutely agree with you! To me, it's ironic that out of all the changes being made, not a single one addresses the 3 core issues that have been plaguing TVB for decades: poor working conditions (which includes TVB treating their artists like crap), long hours with low pay, and poor quality productions. If I were TVB, these 3 issues should be top priority and any upcoming changes should address these issues FIRST AND FOREMOST!

      But of course, this is TVB we're talking about, so they go with the solutions that basically solve nothing (and instead only prove that the person / people calling the shots only care about money). I mean, how does laying off 600+ staff and cutting so-called "frivolous" expenses (things that used to be of benefit to the artists), switching to On Demand service (so they can get rid of the staff who were previously in charge of arranging programming, scheduling, etc.), and reducing / cutting / eliminating "waste" up the gazoo help improve the situation they are currently in?

      Delete
    3. It does nothing but show TVB are in seriously trouble money and management wise! All time Low Ratings between 10-20. Not surprised they canceled the Malaysia and Singapore awards,
      1. They barely have any artistes left,
      2. Malaysia and Singapore having been filming their own tv series with or combined or all HK actors means they are TVB's competitors now.
      3. Budget cut.

      My dad was watching Another Era you just looked like a wannabe version of Trading Floor and wannabe copy of HKTV with poorer color quality and amateur directing! Angles, lighting, and directing were all lacking besides having 4k/better HD quality. Bottomline if TVB doesn't retrain people and send people to US for training, they will never improve even if they have new equipment. All the wannabe HKTV series in TVB are boring with too much talking and zero action.

      He was watching episode 2 and all it had was talking after talking with a small protest scene that is reminiscent of HKTV's series.

      Delete
    4. With all the hype surroudning signing ChauPakHo they sure know how to waste talent away. Two tv series and both of them have him in small supporting roles. Not to mention making 2 posters, 1 with PakHo having a bigger image to mislead people when his role is smaller than even Benjamin Yuen's (no clue why he's a TVB favorite by the way, people like him would've been supporting for life in the past, no charisma what so ever).

      Another Era also have a lot of sitcom and past ATV actors. If I didn't know better I'd think I was watching an ATV series...The acting are all pretty bad and superficial including Roger Kwok. Having the villain be so "apparent" evil in his expression is so 80s and fake! Not to mention the storyline is old with nothing new.

      Delete
    5. @sport: I haven’t watched Another Era yet (not really sure I plan to) but I’m not surprised. One of the things that most of TVB’s series from the last 2 decades have lacked are the aesthetics, which everyone else seems to do better than they do. HKTV focused on realistic setting and it paid off, as most of their series were gorgeous-looking even if plot and character-wise, some were better than others. People say that TVB collaborating with Mainland means that they will finally be able to get the aesthetics right but that is far from the truth. Just look at Deep in the Realm of Conscience – which had terrible aesthetics with too bright colors that created a jarring effect and outlandish costumes as well as scenery that just made it look like someone went overboard with the CGI. Compare that to Mainland series Story of Yanxi Palace, which I actually watched more or less in its entirety (more on this later) and boy, the beautiful aesthetics in that series blows TVB completely out of the water 100% – the muted color scheme, the realistic yet not garish costumes, the gorgeous sets that truly do look like the real Forbidden Palace, etc. Yes, we can say that Yanxi was a multi-million dollar production while Deep was typical el cheapo TVB production and so there is technically no comparison but still, TVB needs to at least make the effort and if they are going to use Mainland money, at least put it to good use!

      Delete
    6. @sport: With Pakho, I’m pretty much indifferent….not a fan of his music and never watched anything he was in so can’t comment on his acting (though did watch the trailers of his series and those few seconds he was on the screen didn’t impress me). I’m honestly not sure why TVB courted Pakho so aggressively (to the point that he actually agreed to sign with their Voice Entertainment label) – maybe they are looking to groom the next generation of singers into actors because most of their talent is gone and the singer/actor route seemed to work well in the past.

      I’m also not surprised that Another Era boasts a lot of familiar faces – that’s TVB’s typical strategy nowadays….put in a lot of familiar faces (especially ones we haven’t seen in awhile), since they are banking on the audiences feeling nostalgic when seeing those faces and therefore pay less attention to the script and acting (and it seems to be working, as most of the “buzz” surrounding the series in the forums is that people are excited to see Linda and Tavia back – even though it’s obvious from the trailer that Linda is playing her typical goody goody role and Tavia’s role doesn’t look too different from her typical roles either, though I guess it’s probably better than watching Nikki Chow, who has always had terrible acting). Don’t get me wrong – there is nothing wrong with putting familiar faces in a series, but the script still has to be up to par…the way TVB does it, they cram the series with familiar faces but then completely neglect the script because they know most HK audiences are nostalgic and take advantage of that, which I find completely offensive….

      Delete
    7. Yup Another Era is sure riding on the nostalgic factor, it's a another wannabe HKTV/Fox series. The topic is a literal copycat of The Trading Floor. Most of the scenes are definitely not filmed in HK but rather in Mainland China. They used more real locations and many grand ones are definitely in China yet they don't "explain" where they're at. The director is also wannabe movie-like except you can tell they are too zoomed in and the angles are completely off. The lighting is still typical TVB so even though they "should" be using better cameras it still can't compare to HKTV or OCTB.

      There are also way too many talking scenes between business men with no "message"/vocal point to the series. It's not just Niki, everyone in the series look like they are just "acting" or reading their lines just feels fake. Also using an obvious Korean name copycat it screaming "this story is fake" every time I hear them say "___ Jit" similar to the main character "Geung Jit" in popular Sci-Fi K drama W: Two Worlds *rolls eyes.

      My dad's watching it and these are the things are notice when passing by. Honestly it's pretty bad yet he seems to be paying attention, go figure. It's something only die hard TVB fans or old age people would watch. :/

      TVB can use the same filming equipment as HKTV but they won't be able to reproduce those quality without sending people to US for 6month training like Ricky Wong did. Nor without revamping and retraining their entire way of writing scripts, lighting, etc.

      When their idea of more real locations is filming China for most grand locations it just makes their TV series even more disconnected from HK society while looking more like mainland series. Mixing Mainland outdoor scenes with a HK based story for architectural setting is plain confusing and that drives me crazy wondering where they are.

      At least with HKTV they tell you where they are through dialogue/conversations.

      Delete
  2. Meanwhile US and K dramas are on the same page talking about science fiction, AI being and looking exactly humans!

    ReplyDelete
    Replies
    1. @sport: Yes, though to be honest, I don’t think TVB will ever get to that point because despite switching more to internet platform now, they are still ultra-conservative and so there are some topics they are still not going to cover, for one, and two, they don’t have the ability to produce really complex series on par with U.S. – the talent both in front of the camera and behind it just isn’t there anymore.

      Delete
    2. Talent wasn't there for K dramas either, the government used 10 years to create the entertainment hug it is today, making funds and grants for productions houses and training actors and singers in US and in the arts since they were teenagers. Ricky Wong also did that with his productions crew sending them off to US just so they can be trained how to use the movie filming equipment.

      ViuTV's recent talent/singing competition GoodNight Show King Makers must've taken a page from Ricky. Top10 contestants will travel to US for training. What ViuTV should do is open acting, singing, and production, classes with the top students being trained professional abroad.

      I find it hilarious how Ricky Wong released a book showing exactly how it's done to make a great tv station yet none of the 2 new tv stations have caught on! I've yet to see any ViuTV tv series on par with HKTV's production in script, cast, and excitement.

      It's exactly why there have been increased locally funded hk movies these past years. Because grand productions are mostly mainland actors or old HK actors. Young and New Hk actors don't get any chances as leads, not to mention the topics are repetitive, copy-cat of US movies with poor CG and tailored towards Mainland audiences.

      Delete
  3. After Trading Floor season 1 ended, I was searching for other stuff to watch and I stumbled upon Flying Tigers and I gotta say, although the production quality is better than your typical run-of-the-mill TVB series, it's still your typical played-out TVB drama. And, what's with people saying it's produced by Shaw Brothers and make it sound it's not TVB? I thought Shaw Brothers owns TVB? I know you've been saying that TVB is heading towards focusing more on the Mainland but to be fair, if TVB can get that big Mainland funding to make HK dramas, I am OK with it....somewhat. As long they still cast HK actor/actresses and have better production quality than your typical TVB drama, it's tolerable (I know I set a low bar for TVB just cuz....it's TVB). However, if they decide to make Mainland style dramas with majority Mainland cast, then to heck with TVB lol.

    ReplyDelete
    Replies
    1. Mainland funded or not, any series geared towards that market will have self censorship because there are many restrictions. TVB will also tailor their topics according to what they "think" Mainland audience wants. That tv station is as good as dead. Look at all the mainland collaborated movies, majority are filled with mainland actors with less and less Hk actors with uncreative topics. Meanwhile it's the fully local HK movies with low budgets that are successful in HK and making the noise in recent years. You also see there are more and more locally based Hk movies that utilizes all HK based topics, actors and film crew. Reason is if HK don't have their "own" movies, in the future all Mainland funded HK movies will no longer needed HK actors and it's already happening!

      Delete
    2. @ch1kusoo: I only caught a few episodes of that Flying Tigers series here and there, but with the little I watched, I could already tell it’s such a joke of a series (which unfortunately was relatively well-received so now they are working on a sequel…go figure!). And yes, it’s the typical run-of-the-mill TVB drama except with slightly better graphics. As for Shaw Brothers and TVB – yes, both are under TVB umbrella (it used to be that Shaw Brothers owned TVB but that was back in the 60s and 70s – ever since they reinstated Shaw Brothers, it’s actually been the other way around in that Shaw Brothers is a subsidiary of TVB rather than the other way around). I think the differentiation is being made because Shaw Brothers traditionally only filmed movies, not TV series – now that they are doing web series too, I think people are being cautious so as not to confuse TVB’s series with Shaw Brother’s series, since they technically ARE different in that the resources and filming techniques aren’t the same. But yes, I agree with you in that at the end of the day, it’s all still under the TVB umbrella….

      Delete
    3. @ch1kusoo (cont): You hit the nail on the head with the Mainland thing! In a sense, it’s not necessarily “wrong” per se for TVB to be going the Mainland direction, but the problem I have is that they aren’t going to manage it properly, which is already painfully obvious in the past year or so that they started going in this direction. Like you said, using Mainland money to make HK series is ok as long as it’s still majority HK flavor – but as we’ve seen with what happened in the HK movie world over the past decade and a half that they’ve been doing the HK-Mainland co-productions, it’s pretty much Mainland taking over and HK losing out (the rules in place for these co-productions pretty much guarantee that HK is going to be on the losing end no matter what). No doubt the same thing is going to happen with TVB…and it’s technically been happening already with the “concessions” that TVB already has to abide by, such as giving Mainland earlier access to the series and allowing them to make more episodes available on their platform – a move that obviously affects their market in HK because HK audiences still have to wait to watch 1 episode per day while Mainland audiences are already 5 to 10 episodes ahead…that’s why the ratings for these series in HK are bad, since most people already watched the Mainland version (can’t say I blame them, as who wants to wait to watch 1 ep a day when you can watch 5 to 10 eps at your own leisure?). And of course, the biggest issue is that TVB basically has to “cater” their series to Mainland audience rather than to HK audience (which means they have to incorporate Mainland actors/actresses and production crew, even if they don’t fit with the series being made), which is really the main problem that most Hong Kongers have with this direction – it’s not like TVB can take the money and use it on the production quality side of things (which is what they technically SHOULD be doing)….pretty much whoever forks out the money has the say. Now of course, I’m not saying all Mainland series are bad – as we’ve seen with series like Story of Yanxi Palace, if you invest in all the right places and really focus on making a quality production all around (meaning script, casting, acting, aesthetics, etc), you can still produce a really good series that is worthy of watching (which is why as much as I hate Yu Zheng, I still watched the Yanxi series because it truly is a good production).

      Basically, with the TVB and Mainland thing, it boils down to this – in the past, HK entertainment industry used to have a uniquely HK flavor, but then HK music and movie industries went the Mainland route and got swallowed up….now the last holdout – the TV industry – is going that direction too, which means that in a couple years’ time, there may be no more HK entertainment industry….THAT’s really the underlying issue with this whole thing that makes die-hard HK entertainment industry fanatics (like me) have such an adversarial reaction to this (despite the fact that we already knew way back when that this would be inevitable).

      Delete
    4. Isn't another reason why many actors are leaving TVB. Why work for bread crumbs when they are just filming mainland series? In that case they might as well take a risk and head up north. Many famous HK actors only stayed with TVB because those series would keep their HK market and audience. Nowadays majority of people don't even watch TVB series. With the increase of web series funded by mainland streaming sites, the need for TVB is even less.

      TVB might think going completely on demand will 'save" them but it will just isolate them more and lose the remaining free to air fans.

      If one needed to watch on-demand there's Netflix, K dramas, anime, US series, etc any one of those would be better than watch TVB or Mainland series. Majority of Mainland series are ancient and repeat of history themes. As modern people how many of those can we really watch? No thanks I like living in the present not be brainwashed by old suppressive stories. Meanwhile modern China series are full copy-cats of K drama from story, setting, to outfits and movements, no thanks!

      Delete
  4. Hey ll, this has nothing to do with your post but have you watched Life on the Line? On the surface, it's another procedural but it's actually a great slice of life series about coping with loss and growing up. Probably one of my favourite series from 2018, Asian or Western.

    ReplyDelete
    Replies
    1. @BQ: Hi! Yes, I’ve actually watched some of Life on the Line, but not the whole thing, as it’s hard for me to sit through an entire TVB series nowadays. From the episodes I’ve seen, I agree it’s a decent series, better than most of the recent ones, but still typical TVB formula — draggy in some parts and a bit too contrived as usual. The good thing that stood out with this series was less focus on romance and more on the actual profession (unlike that Stuntman series where it was essentially a romance rather than about the profession itself).

      Delete