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Study on the Relationship Between Hong Kong's Cultural & Creative

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Study on the Relationship Between Hong Kong's Cultural & Creative Consultative Report commissioned by the Central Policy Unit, HKSAR Government Study on the Relationship between Hong Kong’s Cultural & Creative Industries and the Pearl River Delta Final Report (Part II) Centre for Cultural Policy Research, The University of Hong Kong March 2006 Table of Contents Part I Chapter 1: The overall positioning and the trend of integrated development of the Pearl River Delta (PRD) 1. Origin of the PRD Economic Zone and its characteristics 2. The evolution of integrated development between Hong Kong and the PRD 3. Cultural cooperation between Hong Kong and the PRD Chapter 2: Overview of the development of cultural & creative industries (CCIs) in the PRD 1. Definition of CCIs in the PRD 2. The present state of CCIs in the PRD 3. Characteristics of CCIs in the PRD 4. Spatial distribution of CCIs in the PRD Chapter 3: Outstanding enterprises, organizations and representative outcomes of CCIs in the PRD 1. Representative enterprises of CCIs in the PRD 2. National model bases of cultural industries 3. Large-scale cultural festivals and conventions 4. Cultural & creative industries parks 5. NGOs and NPOs of CCIs Chapter 4: Managing institutions, laws and policies relevant to CCIs in the PRD 1. Overall framework of management in the CCIs of the PRD 2. Development strategies, laws and regulations relevant to CCIs 3. Innovations in the government management mechanism Chapter 5: Hong Kong and foreign investments in the CCIs of the PRD 1. The main areas and proportion of HK and foreign investments 2. Representative enterprises and important outcomes of HK and foreign investments Chapter 6: Challenges and opportunities of CCIs in the PRD 1. Innovations and vitality of industries 2. Organization and structure of integrated development 3. Technological contents of industries 4. Scale of foreign trade 5. Conventions and branding of international festivals 1 Part II Chapter 7: Sectoral Analyses of the relationship between HK’s CCIs and the PRD 1. Advertising 2. Architecture 3. Art, Antiques & Crafts 4. Design 5. Digital Entertainment 6. Film & Video 7. Music 8. Performing Arts 9. Publishing 10. Software & Computing 11. Television & Radio Chapter 8: Possibility and strategies of integrated development between HK’s CCIs and the PRD 1. Favorable conditions for HK to take part in the integrated development of CCIs with the PRD 2. Emphases of integrated development between HK’s CCIs and the PRD 3. Incision point of integrated development between HK’s CCIs and the PRD 4. Recommendations of overall development for HK’s CCIs 5. Conclusions Appendices 1. Major development planning, regulations and policies related to CCIs recently implemented in the PRD 2. Comparison between the “Cultural and related industries classification＂ and the industry classification in the Baseline Study on HK’s Creative Industries 3. Existing practices to promote CCIs by the HK Government and NGOs 4. Bibliography 5. Acknowledgements 2 Part II, Chapter 7, 1 Advertising Chapter 7: Sectoral Analyses of the relationship between HK’s CCIs and the PRD 1 Advertising Status of the Industry in Hong Kong 1.1 Because of its advanced economic development in the region, Hong Kong was the advertising centre of Asia in the 80’s. However, with adjustment and competition brought forward by the huge market in Mainland China, its leading position is gradually diminishing. The Financial Crisis of 1998 and the SARS epidemic of 2003 dragged the industry to its lowest ebb since the handover.1 Fortunately, the economic recovery in 2004 stimulated the local advertising industry. Hong Kong is within the region with the second highest per capita advertising expenditure (hereinafter referred to as adspend) in the world. The first half of 2004 recorded 24.38% increase in total local adspend compared to the same period in 2003. 2 The local adspend in November 2004 alone recorded HK$3.66 billion, a 14% increase compared to 2003. Compared to the same period last year, the adspend during the first quarter of 2005 also recorded an increase, where cosmetics and skin care, beauty/slimming and fitness and travel & tourism service were highest (refer to Table 1 and 2). This indicates that Hong Kong’s advertising industry is gradually climbing up from its lowest point in the 90s and from the blow in 2003 with overall contraction of expenditure in society. 1.2 As early as the beginning of the 90’s, advertising companies in Hong Kong followed their long-term partners of multi-national companies to move north, and developed the market in eastern and northern China. Although the local sector viewed Guangdong and Hong Kong as one single market, the agencies were paying more attention to the Hong Kong market, because firstly, the industry relies more on interactive communication with local culture; secondly, advertising in the PRD region was mostly project-based instead of long-term collaboration; and thirdly, the economic environment in Hong Kong was quite good at that time. Hence the industry was not growing in the Guangdong region. This relatively under-developed market will become a new platform of development for Hong Kong. Right now, industry structure in the PRD is multi-dimensional, with a large population base, a middle to high income level 1 The 2003 SARS epidemic directly caused shrinkage to Hong Kong’s advertising expenses. According to A C Nelson’s Survey on adspend, a drastic decrease of advertising income in several media was recorded in March that year, where adspend in cinema recorded a 90% decrease; 25% decrease for MTR advertisement; and 19% decrease for ATV. Since the figures were calculated in market value, the real decrease should be bigger. Source: 〈沙士衝擊媒體廣告收益劇降〉，Shingpao, 6 May 2003. 2《Hong Kong Economic Handbook 2004》，p.271. 3 Part II, Chapter 7, 1 Advertising compare with other cities within the Mainland, strong consumption power, large market development potential, which are all positive signs towards the development of the advertising industry. Table 1: Hong Kong Adspend in the last Quarter of 2005 - top 10 subcategories (HK$ million, as of 6/1/06) (Source: admanGo) 4 Part II, Chapter 7, 1 Advertising Table 2: Hong Kong Adspend – Monthly trend 2004 to 2005 as of 6/1/06 (Source: admanGo) 5,000.00 4,000.00 3,000.00 2,000.00 2004 1,000.00 2005 0.00 July June May April March August January October February December November September Hong Kong Adspend Monthly trend 2004–2005 (million HK$) as of 6/1/06 Year/ Month January February March April May June July August September October NovemberDecember Total 2004 3,226.83 2,750.11 3,508.35 3,399.20 3,551.82 3,546.40 3,695.56 3,647.75 3,807.25 3,799.95 3,853.02 4,231.67 43,017.91 2005 3,785.46 3,142.84 3,744.39 3,871.03 4,027.47 3,879.92 4,130.53 4,057.57 4,116.71 4,261.36 4,228.77 4,586.97 47,833.02 Status of the Industry in the PRD and Mainland 1.3 According to the Census Centre of the National Bureau of Statistics of China, advertising industry is defined as the industry that produces promotional activities on the media like newspapers, periodicals, outdoor bulletin structure, billboard, window display, Internet, communication devices and broadcast, movie and television etc., including advertising campaign, public relation, marketing survey, advertisement design and production, publicity, promotion, exhibition, advertising agency, mobile vehicle advertisement and the distribution of promotional materials. Media practitioners in the Mainland pointed out that, from 1999–2003, average growth of Mainland’s advertising industry was 14.8%, 8.3% higher than the national GDP. 3 Despite a persistent growth in the Mainland economy and the 2008 Beijing Olympic factor, aspend in the Mainland is only 0.5% of the GDP, which is way below the average of 0.6-2.2% of developed countries. Thus it is forecast that the growth potential of advertising is strong4 and should reach at least 20% in Beijing, Shanghai and Guangzhou in 2005 by practitioners in the local sector. 3 Mingpao Daily, 12 Dec 2004. 4 Apple Daily, 15 Dec 2004. 5 Part II, Chapter 7, 1 Advertising 1.4 Guangdong is an important region, after Beijing and Shanghai, with advanced advertising development in Mainland China. The total sales of the three regions occupied more than 50% of that of the nation. According to the China Advertising Yearbook, Guangdong ranked third in the country in terms of total sales in 2002, with RMB14.318 billion; and the growth of advertising sales recorded 26.6%, which is the largest in the country.5 Based on the data supplied by the Business Administration of Guangdong, the advertising industry in Guangdong was well developed, with an increasing number of advertising companies. Towards the end of 2003, there were 10,800 advertising companies in the province, 92,900 people employed in the sector, and RMB16.589 billion advertising sales.6 By the end of 2004, there were 13,202 advertising companies in the province, a growth of 21% compared to 2003; 85,575 employees in the sector, a 9% decrease compared to previous year; and advertising sales of RMB21.16 billion, with RMB4.57 billion or 27.5% increase compared to 2003.7 1.5 In 2003, the top 5 products and services invested in advertising in the province were accordingly Real Estate and Property, Medicine, Home Appliances, Food and Vehicles, which occupied 18.38%, 9.32%, 8.93%, 7.60% and 6.83% respectively.8 But this ranking is changing in recent years. For example, Guangzhou, as a representative city within Guangdong and the PRD, the top 5 products and services which invested in advertising in October 2004 were accordingly Cosmetics/bathroom products, Real Estate and Property, Food, Medicine and Retail and Service Industries, which occupied 33.91%, 8.34%, 7.45%, 7.27% and 6.99% respectively.
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