Image source: Photo provided by the interviewee Author | Wen Shijun Editor | Wang Weikai Produced | Prism·Tencent Xiaoman Studio TVB is an indispensable cultural symbol in the Chinese-speaking world. Its dramas, variety shows, music...

tvb is an indispensable cultural symbol in the Chinese-speaking world. Many of its dramas, variety shows, and music have become classics, and it has continued to participate in building the cultural memory and identity of Chinese people around the world for decades.

Chow Yun-fat, Zhao Yazhi, Andy Lau, Maggie Cheung, Stephen Chow, Tony Leung, Charmaine Sheh... From the artist training class to Miss Hong Kong, many of the stars cultivated and discovered by TVB are still the mainstay of the Chinese entertainment industry.

tvb (Television Broadcasting Co., Ltd.) is a company with a history of 57 years. One of its founders, Run Run Shaw, served as the executive chairman of tvb for 30 years until he resigned in 2010 at the age of 102.

However, with the rise of new media platforms, changes in mass entertainment consumption, and the arrival of the short video era, TVB, the "big ship", has many rapids ahead. Recently, TVB Executive Chairman Xu Tao had an exclusive conversation with the author of "Prism" in Shanghai, talking about TVB in the process of change.

Xu Tao comes from a financial background. He was once an investment banker and later became deeply involved in the media and Internet industries. On April 29, 2020, Xu Tao became the chairman of the board of directors of TVB. On March 10, 2023, Xu Tao officially became the executive chairman of TVB.

"I have often talked about the youth of TVB recently. How to be young? One of them is the mentality of having the courage to try. Behind innovation is not to be afraid of losing, but to have a heart of trial and error." Xu Tao said.

In this conversation, Xu Tao talked about many topics such as the strategy behind TVB’s profit turnaround, embracing new media technologies, business ideas for high-quality IP and advertising, and integrating Hong Kong with the mainland. He said that "taking advantage of Hong Kong's unique geographical location and creating differentiated integration" is TVB's core strategy.

At present, TVB's internal reform has entered its fourth year. The reform "is the most difficult at the beginning, but once it starts, there will be more opportunities to complete the follow-up, but it will still require a lot of effort in the future."

Eric Tsang in 50% of the management team is new, and reform is more difficult than imagined.

"Prism": How have you personally and your thoughts changed in the past few years when you have been in charge of TVB?

Xu Tao: My years at TVB have actually been divided into two stages. From 2015 to 2020, at this stage, I was mainly involved in TVB’s work at the board of directors level, more in terms of strategies and some major internal strategies. For example, I helped promote some cooperation with mainland China, but I did not get more involved in the operation level.

Although we have seen some areas where TVB needs to be reformed before, this "ship" is still very big and still has inertia. Although there is not a lot of "firewood" to burn, it will not stop and can still make money. Around 2020, a series of unpredictable social events greatly impacted TVB, and we decided to make relatively large reforms. In 2020, I became the chairman of the board of directors of TVB. I spent seven or eight months thinking about the next business direction strategy and personnel structure.

From 2020 to now, TVB work has taken up most of my time. At the beginning of 2021, TVB really began to reform. In the past three years, we have changed more than 50% of our management, that is, more than 50% of the management are new, including Eric Tsang (General Manager of TVB Program Content Operations and a well-known artist), Xiao Shihe (General Manager of TVB Business Operations) , original reporter), Zhong Shujia (president, producer, director of TVB's 77 Studio), etc. In March 2023, I started to serve as the executive chairman of tvb.

My feeling is that on the issue of TVB reform, it is not difficult to see the problems, and it is not that big of a challenge to set the direction, but it can really promote implementation, especially in the direction of some reforms, or to promote some new ones. The attempt required greater perseverance and greater investment than I imagined.

Now, I feel that we have changed the inertia of the ship and moved in the right direction, but we are not yet there completely.This is the most difficult thing at the beginning, but once you start taking action, you will have a better chance of completing the follow-up, but it will still require a lot of effort in the future.

On February 18, 2024, at Sha Tin Racecourse, TVB Executive Chairman Xu Tao, two general managers Eric Tsang and Xiao Shihe, and more than 30 artists and Miss Hong Kong appeared at the TVB Horse Racing Day Charity Match. Image source: Visual China

"Prism": If we talk more systematically, what major surgery did TVB perform? What problems are these surgeries or reforms trying to solve?

Xu Tao: First of all, from the aspect of content production, TVB is not only a radio and television organization, but also a content creation organization. More than 90% of our content is self-produced and self-broadcast, so our structure back then was a very efficient production model that resembled an assembly supply chain. Once the "central kitchen" of this supply chain is built, a lot of content can be produced very efficiently, with dedicated departments responsible for creation, production, post-production, publicity, etc. The advantage of the

supply chain is that it is very efficient and can produce large quantities, but it is also easy to homogenize. In the current Internet era, the production of content has been greatly enriched, and audiences have many choices. In this environment, is it important to produce a lot of content efficiently? Important, but not enough.

Therefore, in our reform, we need to achieve a balance in content production. We must not only ensure the output efficiency of our production model, but also focus on creating some popular items that can be disseminated and influential. In this process, some functional things in the "central kitchen" need to be reorganized appropriately. The second aspect of

is about input-output. TVB was very successful in the past. Its market share in Hong Kong has always been high, and its advertising revenue was enough to cover all content production costs. However, the relationship between input and output was not so deeply connected. How does

TV ratings translate into economic benefits? How to convert it into advertising revenue? How to convert it into social influence? In the era of the impact of the Internet, TVB did not really realize that this was a problem for a while, which also led to the inability to have a 100% good evaluation mechanism in the direction of production. So this is also a relatively important direction of reform. We hope to use a more scientific way to look at the input and output of each program, including economic benefits, social impact and other aspects.

In the third aspect, TVB has never relied only on the Hong Kong market, but also on the vast market outside Hong Kong. TVB has not fully embraced the opportunities brought by the mainland's reform and opening up in the past ten or twenty years. Therefore, when we set the direction of reform in 2020 and 2021, we want TVB to embrace the mainland more deeply.

The first of these is to work harder to embrace the Greater Bay Area market. In the Greater Bay Area, TVB’s brand, content and artists have a very strong influence. Cantonese is a more important factor. When "Continuous Sound: Hong Kong Philharmonic Season" is broadcast in 2022, mainland satellite TV will broadcast the Mandarin version, and we (Jade Channel) will broadcast the Cantonese version. In the Greater Bay Area, the ratings of the Cantonese version greatly exceeded the ratings of the Mandarin version of mainland satellite TV. The second thing for

is to face the national market and reach out to users across the country through more partners. Now we are already promoting cooperation with many institutions. When promoting these collaborations, two things must be done.

First of all, TVB should be more open in content production and when looking for partners. In many of our dramas in the past few years, some have invited actors who have left TVB to come back to star in them, and some have invited external teams to help us create or film them. These practices were rarely used in TVB before.

The second is to integrate with the mainland in terms of creative ideas. In the past, the content produced by TVB was all about Hong Kong themes and Hong Kong thinking, but it is different now. We must understand the situation in the mainland better. We need to be able to speak Mandarin, and we need to understand the national conditions, so that we can create content that can be disseminated. Whether it is big data, metaverse, AI, Douyin, Kuaishou, or Xiaohongshu, we all need to understand that this is also a challenge and a reform that needs to be carried out.

"Prism": We saw that TVB issued an announcement that it is expected to achieve positive profits in the second half of 2024. How is this achieved?

Xu Tao: Specifically, achieving positive profits relies on cost reduction and efficiency improvement.

first talks about cost reduction. In April, we announced the news of turning losses into profits. In 2023, our costs will be reduced by more than HK$500 million. This is a very big move. It is both a reduction and a reallocation. When we implemented the input-output evaluation mechanism, we found that some content and even channels could not be verified, so we reallocated resources. For content with a very good input-output ratio, we will continue to increase investment. After taking these actions, we will save more than 500 million (Hong Kong dollars) in 2023, and we will continue to save in 2024.

Starting from April 22, 2024, our new TV channel "tvb plus" will be launched, merging the original "j2" (high-definition digital channel) and "Financial Sports Information Channel". TVB Plus is a new attempt, hoping to bring our free TV viewers into our digital (media) matrix, including our apps, websites, etc., through new channels as traffic portals. In terms of revenue generation of

, 2024 will be an explosive period. Our cooperation with major mainland Internet platforms will bear fruit this year. This is also sustainable. Many cooperations are not with a single department or at the same time, but with multiple departments for many years. It’s not just a matter of purchasing dramas, it’s also a matter of purchasing and cooperating with some stock dramas. Cooperation with some major video platforms is still two-way. We will also consider bringing some content from our video platform partners to Hong Kong audiences. These are all sustainable, not stand-alone or a la carte. Therefore, this mainland business will also see relatively large revenue growth.

In addition, in terms of revenue growth, we also need to look at our main source of revenue-advertising. Whether it is advertising in the Hong Kong market or in the mainland, especially the Greater Bay Area market, there will be good growth this year. Although the entire advertising industry in Hong Kong, especially TV advertising, has encountered relatively big challenges this year, even against this background, our advertising will still have a double-digit percentage growth in the first half of 2024.

What is the reason? One is that we have opened up the market in the Greater Bay Area. TVB’s Jade Channel has always been in the Greater Bay Area, but the previous advertising rights were not in our hands. Starting from January 1, 2024, we will begin to take back the advertising rights. Many Hong Kong companies are very interested in advertising in the Greater Bay Area.

The same is true in reverse. Now because many Hong Kong people go to Shenzhen for consumption every weekend, many Shenzhen companies want to advertise on TVB. This is also a two-way opportunity.

We have also established a wholly-owned subsidiary in Macau. Because Macau issued a new gaming license two years ago, the six licensees are required to invest more than 10 billion in non-gaming entertainment activities in the next ten years. As a brand that is familiar to the top executives of the six major licensees, TVB also has absolute viewership share and influence in Macau, and will have more cooperation with them in the future.

tvb has three evening parties, including the Thousand Stars Awards Ceremony, Taiwan Celebration, and Miss Hong Kong Pageant, which are very influential across the country. In early January 2024, we will hold one of the evening parties, "Thousands of Stars Awards Ceremony", at the Grand Lisboa Resort in Macau. This attempt was very successful and we will do it again next year.

These are our strategies for the Greater Bay Area. By embracing these opportunities, we can achieve double-digit growth in advertising revenue.

Competing for user time, the short video era is not just about transplanting TV content.

"Prism": Can you talk about TVB's strategic views on new media and the Internet? Recently, there has been much talk about the impact of AI (artificial intelligence) and AIGC (artificial intelligence generated content) on the film and television industry. What do you think of this?

Xu Tao: First of all, you must have an open and trial-and-error mentality to try in all aspects.We cannot adopt a closed and resistant mentality, because these new things have a huge impact on our industry.

For example, in new media, we also have our own streaming platform mytv super in Hong Kong, which is the largest in Hong Kong and has more users than Netflix and Disney+. We have done well on the large screen side, but there is still some room for mobile phones. If TVB wants to maintain the greatest media influence in Hong Kong, the influence and user volume of mobile terminals and mobile terminals must be enhanced.

Judging from the data, in Hong Kong, the consumption habits of professional long videos are still dominated by large screens. But we must increase our penetration rate and user volume on the mobile Internet side. To achieve this, we need to make some adjustments to the tonality or form of our content, products, and we cannot just rely on transplanting the content on TV today.

What are our advantages? We have huge traffic and a huge market share on the big screen and free TV side. We have 20 spots every night during prime time, which means a ratings of more than 20%. Judging from the population of Hong Kong, 1 point of viewing is 64,000 people, and 20 points is 1.3 or 4.0 million people. With such a large market share, how can we combine it and create some new gameplay modes so that audiences can use our mobile apps in addition to watching TV? We are doing some experiments with the Internet and new media.

Regarding AI, I think AI is a revolutionary change for professional content production organizations like us, which produce long videos. I dare not say that AI is like this for all industries, but I see that it is indeed like this for our industry. So we must try harder. Because it can at least subvert the production process, which is obvious.

goes further, it can help us do creative work. Of course, whether AI can help with creativity and enhance the audience’s experience remains to be verified. We have also made many such attempts ourselves and are using them.

plus TVB have a relatively large type of assets that have not yet been developed, which is our IP and film library. Over the past 56 years, the drama IPs and film libraries we have made are now simply placed on video websites. But with the blessing of AI, whether it is secondary creation, cutting, or adaptation, these IPs are highly scalable, which is also a very important issue.

"Prism": Just now you mentioned the issue of user media time allocation and competition, so I want to ask a question. Do you think TVB is afraid of short videos?

Xu Tao: We need to embrace change with a willingness to try and make mistakes.

From the perspective of consumers’ time, it can be said that short videos and long videos compete with each other, but from the logic of content production or the sustainability of IP, the two are complementary. For example, can we extend the life of the long videos we produce through short videos, or enhance the user experience?

The term "short video" is also very new. There are many patterns in it. Are there any short video patterns that can help long videos? This is worth thinking about.

More importantly, short and long are always relative. Many previous dramas had 40 episodes, or even 60, 70, or 80 episodes. Now it’s not even about “episodes”, (originally) 43 minutes, 45 minutes (one episode), or even (turned into) one minute, two minutes (one episode), and 40 episodes. In fact, it is more of a change in form, with adjustments to the story structure and production. But this change must also be embraced, and we must do this. We all have to try, and the most important thing is to be able to adjust quickly.

"Prism": In the field of TV series and variety shows, in your opinion, what is TVB's core strategy? If you could answer it in one sentence.

Xu Tao: I think we should take advantage of Hong Kong’s unique geographical location and have differentiated integration, especially for the mainland market.

"Prism": Do you still believe in the saying "content is king"? I just mentioned TVB’s classic IPs. What do you think these IPs mean to today’s TVB?

Xu Tao: I believe in .

only provides a connection platform. Its growth is very unique. If it can grow into WeChat or other tool platforms, it will be great. But most of them only provide simple connection platforms without production capabilities or unique content. I think there is no way to survive.

We communicate with video platforms. Everyone says that if you have a good drama, users will come. If you don’t have a hit next month or have particularly good content, users will leave.

Let’s talk about the IP issue again. We once missed the mainland market and the era of economic takeoff of reform and opening up, but these classic IPs are a key for us to reopen this market. These IPs are one of the reasons why everyone is still interested in continuing to follow TVB.

But in the end we can't just rely on these IPs, we still have to create new IPs, similar to "News Queen". We still need to be more innovative and use Hong Kong's geographical location to innovate. This is why I just said that TVB should use this special location to create a differentiated integration.

People who have feelings for TVB now may be in their 30s, 40s, or 50s, and have relatively strong spending power. We must grasp it. But another important issue is to cultivate the next generation of audiences. I am very happy to see the release of "News Queen". This release will not only bring higher viewing volume and better economic benefits, but more importantly, the growth of the number of "post-00s" users, which is very important to TVB. It is of very great significance. These IPs of

are still a treasure for us, and there is still a lot of room for development. But for this type of IP, unless we really encounter a good story or a good idea, we still cherish it.

"Prism": What is your overall strategic judgment on the development trend of the advertising business in the next few years, and what kind of preparations and layouts has TVB made?

Xu Tao: Our advertising innovation will definitely be a very important thing in the next two or three years. Whether it is the advertising form of traditional free TV or the form of OTT streaming on the Internet, we are now focusing on the development of advertising products. Keep investing.

Before, TVB did not invest enough in advertising products, and it was relatively simple, mainly based on 15-second and 30-second advertising bidding models. Because the market share was so large at that time, TVB's advertising time was a scarce resource. All advertisers had to pay a relatively high price to compete for your advertising time. At that time, this model was very efficient and very profitable. High.

But now due to various objective reasons, this model can no longer be fully supported. So we are now developing some advertising products that link free TV with apps or other new media platforms. There are also new advertising products linked to Hong Kong and the Greater Bay Area, which should take advantage of our technology and geographical location.

Because in a period of time, although payment will increase and the mainland market will increase, Hong Kong advertising will still be an important income for TVB, which cannot be ignored. To do this, we have a lot to do to make breakthroughs in advertising products.

We are also seeking further opening up, connecting with the entire advertising industry, and reshaping the image of TVB. Therefore, reshaping the relationship with the advertising industry and developing content advertising products are definitely our focus.