Thursday, October 25, 2012

News Article: Anger at delay in bidding process for new TV licences in Hong Kong

Here’s a pretty good article that I came across today about the whole free TV license thing. What I like about this article is that it not only gives an update on the latest ‘status’ of the licenses (which is pretty much the same as before – the government is still sitting on their butts doing nothing), it also gives some history about the HK television industry in general as well as some background on the other 3 applicants.

All the information it contains pretty much matches the information that I had in previous posts about the issue.

Very informative, well-rounded article!

Anger at delay in bidding process for new TV licences in Hong Kong
Article published October 26th, 2012 (HKT)
Written by Vivienne Chow

If the bidding process for new free-to-air television licences was a long-running drama series, Ricky Wong Wai-kay would have taken over the director's chair and yelled, "Cut".
The chairman of City Telecom, one of three bidders, has blasted the government for leaving bidders waiting more than 1,000 days for a decision, saying it's unreasonable and infuriating.
At stake is a huge expansion in viewer choice. Wong alone wants to offer up to 30 channels within six years, and a massive investment in programming. While most of the shows would be in Cantonese, each of three bidders is prepared to offer an English language channel.

Since the saga began in 2009, the telecoms boss has been restrained, patient and hopeful. But having invested more than HK$300 million, completed production of four drama series, built a new 400,000 sq ft multimedia centre, and even sold his core telecom business, including Hong Kong Broadband Network, being "Mr Nice Guy" no longer works.

"Protracted procrastination is not only an act of irresponsibility but, as some might say, a sin," he said last week.

Wong's frustration is not surprising. The organisation that initially considered the licence applications has even had time to change its name from the Broadcasting Authority to the Communications Authority since giving them the nod. The applications are now with the Executive Council - but why the government's top advisory body continues to delay on the issue is unclear.

For three consecutive days, Wong put the issue of the new licences upfront - speaking out after a Legislative Council meeting and then doing the rounds of morning talk shows on Commercial Radio and RTHK.

"Public opinion could be his last resort, even though playing this card might cause a backlash," said Chinese University political scientist Ivan Choy Chi-keung. "He has been burning cash and making zero revenue. This is critical for him."

Wong is not the only one sweating over a bid. Fellow applicant i-Cable Communications, bidding under the name Fantastic Television, made a scene in May - two months before it was forced to share its coverage of the London Olympics with existing free-to-air broadcasters ATV and TVB. In what was seen as a protest against the endless wait, i-Cable demanded a new consultation to find out whether the public wanted new stations.

While i-Cable's HK$120 million purchase of the Olympic rights - bought in the belief that it would have a free station of its own to show them on - has added to its frustration, Wong's need for a licence is the most urgent.

"They [i-Cable and fellow bidder PCCW] are still running pay-TV channels. But Wong has even sold Hong Kong Broadband Network," said information technology sector lawmaker Charles Mok, who has questioned Secretary for Commerce and Economic Development Greg So Kam-leung about the licences.

It is understood that Exco has not discussed the applications since the new government took office on July 1.

The present and previous administrations were put off by ATV's legal challenge to the licensing process, according to a source familiar with the matter. Although ATV's request for a judicial review was rejected in March, the government is reassessing the licensing procedure, the source said.

Choy believes politics may be the ultimate problem.

"ATV is backed by mainland investment and TVB [Television Broadcasts] is diluting political content. This is the most ideal scenario for the current government," Choy said.

New licences could tilt the balance, especially as i-Cable's Cable TV and PCCW's Now TV are known for their current affairs programmes, he said.

But Wong says drama and variety shows will be the staple diet of his new venture.

Politics aside, three new television stations would be significant for the development of Hong Kong culture as well as the city's creative industries.

Hong Kong's first station was Rediffusion Television - a subscription cable channel established in 1957. A decade later came Hong Kong's first free channel TVB, which launched the hit variety show Enjoy Yourself Tonight.

The golden era came in the 1970s when Rediffusion, the forerunner of ATV, became a free channel in 1973. Two years later Commercial Television was inaugurated, although it only ran for three years. Intense competition led to innovation and the production of some creative shows.

TVB not only showed long series, such as the epic 129-episode Hotel (1976), but it also produced TV films such as Seven Women: Miu Kam-fung (1976), a bold attempt by Patrick Tam Ka-ming who drew inspiration from French New Wave auteur Jean-Luc Godard.

Television became an important cultural export and also drove the growth of Canto-pop in the 1980s, allowing Hong Kong stars to dominate Asia's entertainment scene. However, TVB came to dominate the domestic industry.

Mok says audiences are not happy with TVB's monopoly and question the quality of its productions. ATV has weak finances from prolonged shareholders' disputes, and the station is no longer actively producing programmes, Mok said.

Professor Anthony Fung Ying-him, director of Chinese University's School of Journalism and Communication, said opening up the market would enhance diversity in the city.

"People in any big mainland city have more choice of TV channels than Hong Kong," said Fung. "Dragging out this issue will make Hong Kong look inferior."

Sports, performing arts, culture and publication lawmaker Ma Fung-kwok said more competition locally would help companies compete outside the city.

The two terrestrial broadcasters now operate 11 digital channels. Cable TV, PCCW (Now TV) and TVB Pay Vision are the three licensed pay-TV providers.

"Now, Hong Kong TV productions are of mixed quality and face competition not just from the mainland but also from other places," Ma said. "Despite the new digital channels, there has not been a significant growth in TV [content] production."

Questions remain over whether the market can support more free stations.

While ATV has reportedly suffered financial difficulties, rival TVB has been a big winner.

According to TVB's 2011 annual report, the broadcaster had a 17 per cent increase in profit from HK$1.3 billion to nearly HK$1.56 billion.

Of a total turnover of nearly HK$5.3 billion, TVB generated more than HK$3.4 billion net income from advertising.

While TVB executive director Mark Lee Po-on previously argued that the overall advertising pot had remained flat for 15 years, Wong said a HK$1.56 billion profit would be enough to sustain three more TV stations.

Wong argues that the influence of Hong Kong television has declined so much that it has lost its edge compared to Korean and even Thai dramas in the mainland market.

But TVB's books show significant income from overseas. Profit from programme licensing and distribution grew 12 per cent to HK$598 million last year.

A television industry insider said that because ATV was not producing dramas, TVB had become the only source of drama exports, selling around 400 episodes each year to mainland stations. However, Hong Kong series could not be aired during prime time, which is reserved for mainland productions.

The insider said Korean, Thai and Hong Kong dramas were among the most popular imports. "The number of Thai dramas exceeds that of Hong Kong [on the mainland] only because one station acquired a large amount of Thai shows, but Hong Kong shows are sought after by many stations," said the insider.

Mainland audiences still liked Hong Kong shows because the pace was much faster. "They also like to watch shows depicting the lives of professionals such as lawyers and doctors because it's something that they do not have.

"The mainland production houses steal ideas from Hong Kong dramas and produce their own versions, so that they can be aired during prime time. It allows them to make three times more profit."

Choy said the approval of the new free television licences will be a test of the government's credibility. The government should deal with the applications quickly.

Mok said the government could face legal consequences if it kept dragging its feet, because "this is not meeting a reasonable expectation".

"It is impossible to let it die down, falsely believing that people will forget about this. Applications for free TV licences cannot be a black hole."


A general entertainment channel in Cantonese targeting a mass audience with news, entertainment, children's programmes and films. Some 70 per cent of prime-time programmes to be locally produced. English-language channel focuses on acquired documentaries, lifestyle, news and finance

HK Television Entertainment

A Cantonese channel with news, current affairs, variety shows, sport, music and movies. Lifestyle programmes to be locally produced. Will offer an English-language channel "if required"

City Telecom

(Channels not named)

Some 12 analogue and digital channels at launch, two of which will be self-produced. Plans to produce 260 hours of drama this year and 650 hours next year. It has not indicated which channel will be designated for screening in English

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