Tuesday, March 14, 2017

HK Television Wars -- more updates

I wanted to do a quick follow up to my post from last month about the state of the HK television industry as of late, as there were some new developments this week that have the potential to change the landscape of the television industry going into the second half of the year.

1)      The fate of i-Cable:  I had mentioned in the previous post about i-Cable giving back their broadcast spectrum to the government and questioned why they would do that if they still plan on operating.  Well, my question has been answered now, as last week, i-Cable's parent company Wharf Holdings announced that they will be backing out from the media business and will no longer be providing funding to i-Cable.  This decision stemmed primarily from the billions of dollars in losses that the pay TV arm of i-Cable racked up, plus the decline in ad revenue, which has made the pay TV market unsustainable (note that TVB also shut down their pay TV division last year and returned their pay license to the government, so obviously there are issues all around on the pay TV front).  The fate of i-Cable is up in the air at the moment, as they are hiring a financial advisor and going through their current cash reserves to see how much money they have right now and whether that is enough to keep the station running.  No one is willing to commit to anything publicly at the moment, but based on all the facts and numbers, the prognosis looks bleak.  Basically, there is a 99.9%  chance that i-Cable is going to give its pay TV license back to the government, but whether the company will have to shut down completely or not remains to be seen.

Of course, I'm sure you've figured out by now that this is going to impact the free-to-air TV license that i-Cable received last year.  Though their free TV arm Fantastic Television is scheduled to launch in May, there is now talk that it might or might not happen anymore.  Based on all the reports that have come out, everything will depend on what happens once the financial advisor goes through numbers and also whether they will be able to find a new financial backer willing to invest in them, as i-Cable needs to figure out whether they will have enough funds to fulfill the terms of the license (which requires them to commit to investing X amount of dollars for X number of years to maintain programming content).  If getting rid of the pay TV arm means that they can take all those funds and throw them into the free TV arm, then they might still be able to keep things going…however it doesn't look likely given that the company is already millions of dollars in the hole due to all the losses.  For me, this statement from i-Cable's chairman and chief executive Stephen Ng (as quoted from this SCMP article) says it all:  "We have three [broadcast] licenses, including the new one to be awarded by the government.  We are now considering whether or not to accept the new license and how to deal with the existing licenses."

2)      Forever Top consortium – coincidentally, David Chiu held a press conference a couple days ago and confirmed that the "restructuring" of their company is complete now so they have reinstated their application for a free-to-air license.  From what I understand based on what was stated in the press con (need to wait for the official reports to come out for actual terminology), the restructuring that took place was basically the consortium replacing their primary investor from a Mainland company to one that is based in Hong Kong.  The reason for this is because of the stipulation in the free TV license rules that foreign investors are not allowed to involve themselves in the day to day operations of the free-to-air TV station in any capacity whatsoever.  Sounds like David Chiu was playing it safe and didn't want this to affect his chances for a license, which in a way, is a smart move given what happened to ATV and what ultimately led that station to shut down after 59 years of existence (I'm sure no one needs to be reminded of the damage that Mainland investor Wong Ching did to ATV).  So basically, Forever Top is back in the game now and has confidently expressed that they are pretty sure about their chances for being granted a free-to-air TV license.  David Chiu also said that he expects the government to make a decision "very soon."  

Hmmm….ok, well, the "mystery" over Forever Top's sudden suspension of their license application has been solved now but I'm honestly not sure whether I should feel good about this or not.  I'm still not convinced that Forever Top will have a positive impact on the HK television market and to me, I don't see a difference between them and all the other media companies that are now trying to infiltrate the Asian entertainment market (more on this later).  I remember David Chiu saying back when he first submitted his application that if the government did not make a decision on the licenses within 6 months (or was it 3 months?  Can't remember the actual timeframe off the top of my head), he would rescind his application, as he does not have time to wait several years and will put his resources elsewhere instead.  This was what, like 3 years ago?  And obviously the government still has not made their decision yet.  So then David Chiu changed his mind and decided he DOES have time to wait after all?  Or was that "threat" his way of trying to strong arm the government into giving him a license?  By now, I'm pretty sure you guys understand why I don't feel good about this company (David Chiu and his consortium) at all.

3)       Last but not least – TVB.  I don't have a whole lot more to add from what I wrote in my previous post other than a "warning" to TVB that they better step up their game – and sooner rather than later.  Here's why:

-          ViuTV announced last week that they will be revamping their business model and have been given the green light (by their top execs) to invest in the production of more TV series.  So instead of focusing on reality-based variety shows (which is what they've been doing this past year since launching in April 2016) and only churning out 1 or 2 original series every couple months,  they will now be producing their own series on a consistent basis and airing them nightly (versus once or twice a week like they did previously).  I personally feel that ViuTV's "Margaret and David" series from last year showed a lot of potential (and this year they are upping the ante by inviting HK movie veterans Anthony Wong and Patricia Ha to film the next installment in the series), so it's still possible for ViuTV to give TVB a run for their money in the TV series department (though it's very obvious that the target audience is different for both stations, as ViuTV is trying to pull in younger generation audiences while TVB is still catering to housewives for the most part).

-          Fox Asia (the international arm of U.S. media giant Fox Network) already announced plans to film their first Cantonese language television drama.  It will be a crime thriller that is based on true life events and will star award-winning HK movie veterans Anthony Wong (man, Anthony sure is busy lately, lol), Kara Hui, Tse Kwan Ho (all 3 are HKFA and/or Golden Horse Best Actor and Actress winners).  Fox will be doing a separate press conference to announce further details but rumor has it that they intend on working primarily with HK movie stars on their drama series so there is a possibility that we may see more HK movie industry A-listers returning to the small screen in the near future.

-          Netflix, which launched in HK last year, has been working on strengthening up its programming as well as its presence in the city.  They haven't made any formal announcements yet but industry insiders predict that they will likely make a move soon.  If Netflix does decide to produce their own original Chinese-language series, no doubt that it will turn up the heat on the competition given their track record of already producing hit TV series in other countries.  Also, they've already bought broadcasting rights to a bunch of popular Korean and Japanese TV series, which they plan on airing on their HK channel.

-          I just read an article this weekend that said HBO is also gearing up to get a piece of the action as well.  I actually didn't know this but turns out that last year, HBO had collaborated with a Chinese production crew (that consisted of a famous Mainland China director and HK stunt choreographer) to film and release 2 Chinese language TV movies.  In addition, they also collaborated with one of Taiwan's top TV stations on a series starring Taiwanese singer-actress Guo Shu Yao.  While it looks like HBO's target isn't necessarily the HK television market (at least not right now), it's pretty obvious that they are trying to establish their footprint in Asia and with HK's history of being one of Asia's premiere entertainment hubs (hey, HK didn't get its nickname "Hollywood of the East" for nothing), the likelihood of that "reach" expanding to HK in the future is pretty huge if you ask me.


  1. 1. Well we all know i-Cable was never really committed into the whole TV license thing anyway from the beginning. They were just forced to because everyone else was applying. i-Cable itself has been losing a lot of money over the past few years so shutting down the business is actually a smart move (unlike ATV). They may use all their staff and studios for their free TV channel and focus on one thing. Although from what I read, it seems more likely than not they will also give up the free TV license.

    2. Even if David Chiu's consortium does get their license, he has already said that the station will focus more on business, news and economics (like CNN). Now, as long as they don't do what ATV did when they went down this route, I do think that it will work. As long as they manage to get good resources going into it and do an English/ Mandarin channel as well for international purposes then it may work. I think what he said 3 years ago was only to try and make the government speed up the application process but given that he has made the effort to find a HK investor, I think he does have the commitment to a TV license. I'll stay neutral on David Chiu for now

    3. Yay for more people entering the market - hopefully it will give a boost to the standard of HK dramas. Fox's approach seems the most prospectful out of the three. I didn't watch Viu TV's drama so can't comment on quality. At least this means that HK dramas can start recapturing the young audiences again (or like basically anyone who is not a housewife).

    4. HKTV - Ricky Wong made a comment last week when i-Cable announced that were pulling out investment, basically re-iterating that he wanted to do TV but couldn't get a license, but the people who did get the license didn't want it. So maybe he is still interested in TV. However, it seems he is converting some of the building at Tseung Kuan O to a warehouse/delivery centre for the HKTV mall. So I think that he may end up pulling out altogether if the government decides again not to give him a license in the near future. HKTV mall is still losing money, but it basically has no competition in the HK market of its kind so the outlook is actually fairly good.

    1. @Phixster:

      1) Yup, definitely obvious – which is why in a way, I can understand why Ricky Wong would be as pissed off as he was when he didn’t get a license but everyone else did. It’s interesting that the 3 license applicants at that time each took different approaches – HKTV went the high profile route with putting out every single detail of their plan out there for everyone to see, i-Cable went the super secretive route and didn’t reveal a single detail, while NowTV took the middle route and only revealed what needed to be known (i.e. amount of investment, number of hours, general type of programming, etc.). Out of the 3, NowTV is the only one that has successfully launched.

      I also think i-Cable will give up their free TV license based on what their execs have stated. One thing I do appreciate about this i-Cable fiasco versus the ATV is that at least the i-Cable execs sound sensible and have been forthcoming so far with their situation -- versus the ATV execs (well, primiarily Nick Ip I guess) who were delusional throughout the entire time ATV was going through all those problems and pretty much pretended that nothing was wrong. Oh and i-Cable so far hasn’t stooped so low as to blatantly try to extract sympathy from Hong Kongers to prevent themselves from closing….that was actually one of the biggest things that annoyed me with the ATV thing (though I think the record for most annoying was when ATV’s chairman Nick Ip tried to get Hong Kongers to crowdfund in order to keep ATV running for as long as possible….not sure if anyone took him up on it but to be honest, whoever fell for that trick is truly stupid!).

      2) I think that David Chiu going this route will be very different from the way ATV did it. Wong Ching was clearly inexperienced and pretty much just wanted to satisfy his ego by showing that he had the power to control Hong Kong’s first and longest running TV station….he didn’t give a crap about the station itself or its people. David Chiu’s consortium does seem to be more serious about it (like you said, the fact that they made the effort to get an HK investor), plus they hired a few industry insiders who are familiar with the HK television market to help them run things (i.e. TVB’s former managing director Ho Ting Kwan). I also still have a strong feeling that Winnie Yu (CRHK’s former chairman and longtime media personality) will be involved in operations somehow given her relationship with Pansy Ho (kind of odd that she would quit CRHK all of a sudden after so many years there and with operations going so well). This actually will be a good thing in my opinion because Winnie is very good at what she does, is well liked, plus she has plenty of experience and connections throughout the entertainment industry.

    2. 3) I agree wholeheartedly! Though I find it ironic that TVB did everything they could to prevent HKTV from joining the game and also saw their chance to strengthen their monopoly with ATV shutting down, but things are actually worse for them now due to other players coming in that TVB has absolutely no control over. That plus the added fact that they are losing people left and right to Mainland China market. In a way, I was being sarcastic when I said that TVB has to step up their game because I know they aren’t going to, no matter what happens – their antiquated policies and processes have been in place for way too long and unfortunately, they don’t know any other way to do it (and don’t want to learn either). TVB’s strategy is going to continue to be the “nostalgia” approach where they try to appeal to HK audiences’ sentimental side by bringing back familiar faces and household names to helm their series, which of course is also the “lazy” way in a sense because this means they don’t have to put much effort into the script or casting or whatnot since most of the housewife audiences will watch based on name recognition alone.

      - Oh, one update I forgot to put for Fox – there is also discussion about Andy Lau producing a series for them titled “Hong Kong Wall Street”. Not sure what stage of discussion they are in with this but undoubtedly everything was put on hold due to Andy’s injury. But the little that has come out so far is that Andy will be producing and starring in the series.
      - I’m also excited for what Fox has to offer, as I also agree that their approach seems the most prospectful so far. It sounds like Fox is going to be the investor and will provide all the resources but will give full creative freedom to the HK production team making the series. So basically getting the best of both worlds – productions on the level of American series in terms of quality but 100% Hong Kong flavor.
      - I watched ViuTV’s series last year and even though the filming wasn’t without issues and controversy (discord between production crew, ViuTV, etc.), I feel they did a good job overall. However like I stated in other forums, their series are pretty much niche market, as there is little plot and gimmick like TVB stuff and more reliant on actual acting, so the mainstream TVB audiences are not going to understand or care for their series…case in point – almost all of the long time TVB series watchers I encountered said that ViuTV’s series was “slow and boring” (though of course, I take that with a grain of salt since there are some die-hard TVB enthusiasts out there who hate all things non-TVB and will bash stuff without watching even a minute of it just to show their loyalty).

      4) Ricky Wong is obviously still bitter about the way the government “played” him with the licensing thing, which in a way, I can’t really say I blame him. He has the right to be angry just like all those people who protested had the right to be angry at the government’s black box operations. I know that Ricky Wong has been pushing really hard for Hong Kongers to support John Tsang for CE, which I’m not surprised at all since he’s always had an amicable relationship with the finance chief (or former finance chief rather)…I’m pretty sure he is confident that he will finally get the license if John Tsang becomes CE. I also feel that Ricky Wong should just concentrate on HKTV Mall and stop wasting his time with trying to get a free-to-air license. Besides, with all the technology, the future is in web/internet series and watching content on the go rather than sitting in front of a TV. If he wants to keep one foot in media, then go the movie and web series route rather than terrestrial TV (plus there’s more creative freedom with that route as well).

    3. It sucks that the fate of HKTV is up in the air still and Ricky is still fighting that steep battle. Now Fox (and possibly Netflix) are entering the HK market with ease it seems! I have nothing against Fox or Netflix but I thought it would be cool if a HK local would start from scratch and succeeding.

    4. @ch1kusoo: Totally agree with you. And the sad part too is that back when HKTV was rejected, there was all this “talk” by the government and industry people about HKTV being “financially unsound” or whatnot and therefore not deserving of a license – yet, look at where we’re at now: ATV shut down due to financial issues, i-Cable will likely shut down as well, and I just read the other day that LeEco (the parent company of LeTV, which also has a stake in the HK television market, though not free-to-air necessarily) is also struggling financially and had to sell off its video streaming business (the LeTV portion of their business). They didn’t even give HKTV a chance to prove themselves and instead opted to open the door for “foreigners” to enter and take a piece of the market, which I find extremely ironic given how China is known for “hating” foreign influence on their culture.

    5. Well to be fair, HKTV wanted to get in the market via the free to air "traditional" TV service which is controlled by the government. Netflix and Fox are both going the internet TV route which the government doesn't control. (Actually I don't know how Fox is going to air at all, do they have like cable Fox or something?)

      HKTV had the internet TV option but didn't utilise it well enough and had a pretty buggy system.

    6. @Phixster: Very true -- HKTV's internet TV platform was hugely buggy. But they did have excellent customer service though, especially when compared to TVB and other media companies (actually most other companies for that matter). I remember each time I would contact HKTV about an issue with their platform or system, they would get back to me right away and also outline exactly what they were doing to try to fix the problem. I guess since I work in the customer service sector myself, I'm very sensitive to customer service quality -- I can tolerate having a buggy system as long as you are doing your best to fix it (or at least giving me the impression that you're doing your best to fix it). The worst is having a buggy / faulty system but then when customers contact the company to report the issue, the company blows us off (either doesn't respond or try to make it sound like it's your issue not theirs). I actually had this happen to me with Mingpao recently and it ticked me off to no end (I almost cancelled my subscription).

      In any case, yea, as we've discussed before, Ricky Wong's insistence on getting a free-to-air TV license at all costs became a dumb move of sorts in the end, especially knowing that it was (and will continue to be) an uphill battle that he will never win. He should've continued on the internet TV path back then, which obviously would've paid off dividends now, especially considering that all the other platforms (including TVB) are now going this route...but of course, his stubbornness is coming back to bite him now.

  2. And fantastic television has announced they will start broadcasting in May. The fate of I cable is still up in the air but my guess is that they will close i cable and just use all their staff and resources for fantastic so it doesn't create competition between the two. A lot of the variety programs they announced are basically I cable programs anyway.

    1. @Phixster: Yup, that sure looks like the direction i-Cable is going now. But there are still 2 months left until 5/14 launch date and anything can happen between now and then so let’s wait and see….

  3. Hello,

    First of all, Thanks for updating the Hong Kong Television Market. It's good there is information in English.

    Second, do you know what's exactly happening with the Pay Channels of TVB. You said they want to stop that, but do you actually know when. And when they stop, are the current channels going to be broadcasted on their internet service MyTV Super?

    1. @Anonymous: You’re welcome! Glad you found the information useful! :-)

      In January of this year, TVB officially closed down the pay TV arm of its operations and returned their pay TV license to the government. According to reports, on the pay TV front, TVB had been operating “in the red” for a number of years and lost more than HK $2.2 billion due to issues that have plagued the HK pay TV market for some time (i.e. declining ad sales, rampant online piracy, etc.). Whatever channels and services were offered on the pay TV side have now been shifted to myTV Super, with its content accessible via set-top service in HK.

      Of course, this is not to be confused with TVB’s free-to-air services (Jade channel, etc.) being affected, since those are 2 different operations under the TVB umbrella. The free-to-air channels will continue to function as they do now, though TVB has and will continue to expand and bolster its myTV Super platform in the coming years.

      Depending on where you live, the shutting down of TVB’s pay TV service may or may not impact. With me for example, I live in the U.S. and all of the content TVB usually airs on their pay channels in HK has always been available to us here as part of our “regular” TVB channels, so this pretty much has zero impact on me. Besides, majority of TVB’s content is available legally now via TVB’s own online (Internet and mobile device) platform (myTV Super in HK and encoreTVB in the U.S.), including much of the content that was on their cable channels, so it does make sense for them to shut down pay TV services that most likely few people subscribe to anyway.

  4. So now that the election is officially over and Carrie Lam has won, what do you think of HKTV's chances of getting a license? I think RW's chances are higher than when CY was in charge but probably not as high as if John Tsang won.

    But either way, I really think that RW has given up on TV, he is using the multimedia centre as a delivery centre of HKTV mall and the mall is increasing it's sales dramatically. HKTV is still overall losing money but a lot less than the year previously (mainly due to the lack of TV productions). With the arrival of OTT, free to air is definately not profit making so in the end, it may be a good thing he never gets the license (which is unfortunately sad for us viewers)

    1. @Phixster: I agree with you (higher chance than with CY but not as high as John Tsang winning). With that said though, one thing we should keep in mind (which my mom pointed out to me the other day) is that with CY Leung’s promotion to whatever that position is (I’m bad with political titles, lol), he is still technically Carrie Lam’s boss now, it’s just in a more indirect manner. So in that regard, he can very well still “influence” the license decision.

      RW may have given up on TV, but he sure isn’t making it known, lol. It’s good that he’s focusing on HKTV Mall and expanding that business, as there is definitely more potential for success there. Even if he does the internet TV thing, it’s actually too late for him because TVB set foot in that market last year and business is booming for them, with a record high number of subscribers for their myTV Super (the numbers came out and they are making ridiculous amounts of money with the program). As much as I hate to say this, I think the best opportunity for HKTV to get a license and even be remotely successful was back in 2013 – now, the “hype” has passed and with all the additional options that have come out, I doubt that RW or HKTV will get the amount of support that they got / would have gotten last time.

      By the way, did you hear the latest about i-Cable? David Chiu (from Forever Top, who is already applying for a free-to-air license) is interested in buying i-Cable, but his one requirement is that they trim down on manpower….so the rumor is that i-Cable is planning to lay off two-thirds of its staff starting today. I haven’t checked the news today so not sure if they actually went through with it but kind of sucks that so many more people will be out of jobs soon.

    2. Unfortunately it seems that RW missed the ideal opportunity for internet TV - he could have been the first person in HK and gained a significant market share.

      Does the myTV super include the overseas subscriptions to TVB anywhere? Because I feel that the overseas numbers would significantly boost their overall subscription number since its pretty much the only legal way to watch overseas.

      And no, I don't think they went thru with it. The iCable boss came out and said it was just a rumour (about firing staff, didn't mention the buying part).