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

Source: Hong Kong Economic Journal

http://www2.hkej.com/landing/mobArticle2/id/1927147

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….

My ‘TVB Rant’ # 26: Wow…those ‘bonehead’ execs at TVB are at it again!!

After doing back to back rants earlier in the month, I was ‘hoping’ to get a break from ranting about TVB for a while (after all, it truly is exhaustive to write these rants and puts me in a bad mood too…) – but unfortunately, TVB did something stupid again recently and so I can’t help but rant about it.

I’m sure most people have read the news reports about TVB ‘blacklisting’ Sheren Tang and saying that they won’t collaborate with her anymore due to her recent criticisms of Beauty At War’s scriptwriter Chow Yuk Ming and the negative impact that his ‘habit’ of on-the-fly scripts has on actors/actresses (for more information on the ‘criticisms’, read the ND Daily interview that I posted up a few days ago).  TVB’s General Manager Mark Lee (yes, that dude again – those who’ve been following my posts about the TV wars probably know that I don’t think highly of him at all) claimed that other artists ‘complained’ about Sheren’s ‘negativity’ and felt that her comments ‘damaged’ the camaraderie / morale of the BAW cast/crew, so TVB decided that it was best not to collaborate with her anymore.  He actually made an ‘announcement’ about this publicly too, which was very surprising.

As if that weren’t enough, TVB’s other General Manager Peter Au told the press today that they weren’t ‘boycotting’ Sheren, rather there just aren’t any further opportunities for collaboration in the coming months (yea right!  Come up with a better excuse, will ya? Every time TVB ‘freezes’ someone, they always deny it and use the ‘no opportunities to collaborate’ excuse – IT’S GETTING OLD!!!!).  Further to that, he said that he ‘hopes artists talk to management about their grievances instead of publicly airing them to the Media’.

I don’t know about you guys, but that last part totally ticks me off!!  The way I’m interpreting Peter Au’s comment is basically that artists are not allowed to publicly criticize TVB and instead must keep all grievances internal and they’ll deal with it internally.  WTH???  So does this mean TVB is trying to take away their artists’ freedom of speech and expression?  WOW….seriously???  

But wait, it gets better….

At their “Amazing Summer” event today, Peter Au also ‘declared’ that starting in 2014, they have told the production teams that all scripts must be 80% completed (and in the artists’ hands) prior to filming – this is a ‘procedure’ that they are planning on implementing as part of their overall ‘renovation plan’ to improve productions.  HOWEVER, Mr. Au vehemently denied that this ‘change’ came about because of Sheren’s criticisms (since this was exactly the thing she had been complaining about since before BAW even started airing) – he said that this was something they [TVB] were ‘already planning on doing since the beginning of the year’.

Um, ok, now that I’ve laid it all out, here’s my reaction to Mr. Lee and Mr. Au’s ‘announcements’:  What a bunch of hypocrites!!  On the one hand, TVB publicly ‘denounces’ Sheren for speaking up about the poor filming practices on set (all of her criticisms are true by the way and have been publicly confirmed by various TVB people), yet on the other hand, by making the change with the scripts, they are ‘indirectly’ acknowledging that Sheren’s ‘complaints’ are actually valid (though of course, they deny that the change had anything to do with Sheren – as usual). 

Honestly, does TVB expect us to believe this nonsense BS?  Do they think we (the general public) are stupid or something?  I mean, come on – who the hell is going to buy the argument that TVB decided to make this ‘change’ [with the scripts] because they finally ‘recognized’ that it was a problem and NOT because Sheren complained about it?   This on-the-fly script thing has been going on for at least 40 years already and up until this point, TVB never made an effort to acknowledge the issue or make any changes (so are they trying to tell me that the management had ‘fallen asleep at the wheel’ for 4 decades and finally just ‘woke up’ yesterday??) – yet, the minute Sheren starts complaining about it, TVB suddenly makes this ‘sweeping’ change!  Sorry, but that CAN’T be a coincidence!  If I were one of the reporters present during that event, I would have drilled Mr. Au on his freakin’ contradictory comments (but of course, HK Media either don’t seem to care or are just plain dumb).

And this whole thing about other artists ‘complaining’ about Sheren’s ‘poor behavior’ (hence TVB’s action of ‘banning’ Sheren)?  Well, I really want to know what these artists think about TVB’s new 80% script policy then – if they feel Sheren was ‘wrong’ in complaining and that ‘on-the-fly’ scripts are perfectly fine, then why don’t they just continue to film with those scripts then and not ‘benefit’ from the change (I dare those artists to go up to the TVB higher ups and say ‘Oh I’ll pass on the 80% script thing – just give me a scene summary and I’ll work off of that…it’s perfectly fine with me!’).  In my opinion, these artists should be ‘thankful’ to Sheren for speaking out on their behalf and getting TVB to make these changes that will make their lives as actors/actresses easier – but unfortunately, instead of being grateful, these artists ‘condemn’ Sheren and practically ‘crucify’ her for it!  Wow….just….w.o.w.!  

Bottom line for me – if the piece about other artists complaining is true (I’m holding out hope that perhaps TVB made that part up as an ‘excuse’ to justify their actions toward Sheren), then they are definitely hypocrites as well and shame on them for doing what they did! 

With all that said, the part that REALLY pisses me off is Mr. Au’s comment (which I highlighted in BOLD above) asking TVB artists not to air their grievances to the Media.  Um, sorry, but isn’t this essentially restricting artists’ freedom of speech?  Hmmm, so if artists aren’t allowed to publicly ‘criticize’ TVB, then does that mean they aren’t allowed to publicly ‘praise’ TVB either?  Well, that certainly has to be the case otherwise it would be a contradictory statement – after all, it’s a two-way street….if you’re not allowed to criticize, then you shouldn’t be allowed to praise either (actually, I have a better idea – TVB should just tell their artists that they aren’t allowed to talk to the Media period and anyone who dares to open their mouths to say one word will be fired!)

Honestly, I would think that as one of the higher ups, Mr. Au should be aware of how TVB operates.   I mean, does he honestly think that artists (Sheren for example) like to complain to the Media just for the heck of it?  Many of the artists who have publicly complained about TVB (Sheren, Felix Wong, Michael Tao, etc.) had already tried talking to management internally about it first – in fact, many of them had been voicing their concerns for years, but did TVB do anything?  Of course not – most of the time, management just tries to sweep things under the rug in the hopes that the issue will just ‘go away’.  Come on now – the artists aren’t dumb…they know how TVB operates and they know full well that majority of the time, their ‘complaints’ will fall on deaf ears…the only way TVB management will take action is if the issue is made public and the audiences pressure them to do something (how many examples have we seen of this already in the past few years??).  So for TVB to make such a ‘statement’ is really ridiculous beyond words (Why have the other artists not said anything?  Do they not care that their freedom of speech is being restricted?  Or are their hands tied because they have to be ‘obedient’ to the ‘almighty’ TVB or risk losing their jobs, so they’d rather just ‘suck it up’?) 

Obviously I’m frustrated and beyond disappointed at TVB’s actions.  I feel that they’ve definitely gone too far this time around in publicly ‘condemning’ Sheren while at the same time arrogantly ‘flaunting’ their pettiness and their ‘I have the power to do whatever the hell I want’ attitude!

I can honestly say that in the close to 40 years that my family and I have been ‘supporting’ TVB (in more ways than just watching their series), this is the first time that I truly feel ticked off to the point of wanting to cut off ties with them completely (though whether that will truly happen remains to be seen)!  The unreasonable, irrational ‘monster’ that this TV station has evolved into these past couple years has really made me ashamed to even be remotely associated with them (as a long-time, once ardent fan).  Yes, these words may sound harsh (and to be honest, 10 years ago, I didn’t think I’d ever write such words), but then again, TVB is no longer that once ‘beloved, respectable’ institution that I grew up with either!  Sometimes I wish that all my favorite artists (yes, there are many of them still working for TVB) would just leave TVB so I can cut that company off completely!  One can only wish….

Lastly, I do want to make one thing clear….despite my ‘rant’ about TVB’s pitiful, lame-arse actions, I’m almost 100% certain that Sheren really could care less about TVB ‘boycotting / banning’ her – she is a great actress with tons of opportunities and job offers in HK and Mainland, so she doesn’t need TVB at all.  Yea, so ‘ban’ Sheren all you want TVB – it’s your loss anyway!!

News Article: TV licence to thrill: Ricky Wong's pledge for the future

This is part 2 of the article I posted yesterday from SCMP about the whole free to air TV license thing. In Part 1, TVB’s GM Mark Lee got the chance to give his ‘argument’ for why additional TV licenses shouldn’t be issued while part 2 gave CTI’s chairman Ricky Wong the chance to voice his argument in support of the license issuance.


Personally, I feel that Ricky Wong has a more valid argument -- he is pretty much able to refute each of Mark Lee’s main points, attaching concrete numbers / statistics to support his points just like Mark Lee did.

To be honest, after reading these 2 articles, I can’t help but side with Ricky Wong – to me, whether Mark Lee has any valid points or not doesn’t matter anymore because I absolutely detest his attitude! Pretty much after I read the part where Mark Lee “threatens” to take away employee benefits and such if the government “dares” to issue the free TV licenses, I was instantly turned off by his arrogant lack of concern for his people (aka the people who work for him) and basically didn’t care any more what else he had to say. I mean, come on now -- as an employer, when you start threatening your employees' livelihoods and essentially tell your employees that you are "using" them to further your own selfish agenda (which is pretty much what Mark Lee is doing with the ‘threat’ that he made), how can you expect your employees to continue to be 'unquestioningly loyal' to you? Personally, if Mark Lee were my boss and he "threatened" me like that, I would quit right away and tell him to go take a hike (to put it mildly)! Who needs to be treated like an 'easily dispensable piece of trash' and then to be 'threatened' with having your benefits taken away on top of that?

Ask any owner of a successful, prosperous business and they will tell you that their biggest asset is their people (aka their employees) – without the ‘people’ who diligently and loyally work hard day in and day out to service the company’s customers, the company would go nowhere (this is especially the case in the entertainment industry – heck, there wouldn’t even be an entertainment industry without the artists, producers, directors, etc. who are the ‘core’ of any production!). TVB’s management obviously doesn’t understand this concept otherwise Mark Lee wouldn’t say the stupid stuff that he did! This is actually one area where Ricky Wong has the upper hand and why, despite how much some people may dislike him for the way he operates or shoots off his mouth, they are still willing to stand behind the ‘cause’ of his company getting their license – the way he treats his employees is drastically different from the way TVB treats theirs….he treats his employees with respect and humbles himself in front of them, plus he’s willing to take risks and give people chances that they may have never gotten before (of course there will be those out there who argue that he’s doing all this just for show and such – but hey, at least he’s willing to make the effort to treat people well for however long it lasts…unlike TVB’s management, who basically don’t give a crap and don’t even bother to ‘pretend’ to treat their employees decently!).

In terms of the ‘argument’ from both sides….well, Ricky Wong may not be 100% right with some of his points and who knows if he will actually ‘follow through’ with all the stuff he says he’s going to do, but regardless, he still has a decent, valid argument. Come to think of it, TVB’s argument is actually kind of weak – their whole point is that the HK advertising revenues isn’t enough to sustain so many TV stations. If that’s what the ‘gist’ of their argument is, then fine – but if you really want to hear my opinion, that ‘argument’ itself can be shot down because if you really think about it, even if the other 3 stations get their licenses, there actually won’t be 5 stations competing against each other. Why? Well, look at it this way…

ATV is pretty much out of the picture already because they are so far gone, no one can save them anymore – so they basically don’t count.

NowTV has already said their focus will be on the Mainland market and not really HK audiences, so they won’t be in direct competition with TVB.

I-Cable hasn’t really revealed much about their plans, but it sounds like their focus will be more on ‘large scale’ events (such as Olympics, World Cup, etc. – those type of big sporting events) as well as informational shows, so I highly doubt they will be much of a ‘threat’ to TVB.

That pretty much leaves only CTI in direct competition with TVB….so in essence, at the end of the day, there will still only be 2 TV stations battling out – the only difference is that CTI will be a strong competitor against TVB rather than a weak, virtually nonexistent one like ATV was.

So basically, the only TV station that will truly be threatened if CTI comes on board is ATV, since most likely they will go bankrupt and close up shop (which honestly is perfectly fine for most of us at this point). TVB will probably make "less money" because they have to share the pie with someone else, but in no way will they be "in the red" as Mark Lee claims.

In essence, my whole ‘take’ on the issue is: give the 3 new stations their damn licenses already!!!

.****.

TV licence to thrill: Ricky Wong's pledge for the future
In the last of a two-part series, the City Telecom boss talks about his dream for a station that will rebuild lost pride in Hong Kong's culture

Written by Vivienne Chow and Amy Nip


Source:  South China Morning Post

        Ricky Wong Wai-kay loves green. In his modest office in an industrial building in Kwai Chung, the City Telecom chairman has a selection of ties in various shades of green resting on a rack next to his chair. There's a tall green plant and a load of chunky objects in viridian decorating the shelf behind his glass desk.

But one green item the telecoms maverick still can't get his hands on is the government's green light for his free-to-air television licence application. It has been more than 1,000 days since Wong's CTI applied, as did subsidiaries of PCCW and i-Cable.

He has become increasingly vocal over the past month about the delay, making himself a target for criticism from the two existing terrestrial television stations, Television Broadcasts (TVB) and Asia Television (ATV). TVB argues there isn't enough advertising revenue to support more new stations, while ATV has attacked Wong in its Blog the World show, dubbing him a demon.

That has not dampened Wong's spirit. It's a battle he is determined to fight - CTI sold its 20-year-old telecoms businesses in May for HK$5 billion to concentrate on television. He vows to create a TV station that belongs to Hong Kong.

ATV's attacks don't appear to faze him. "They have probably helped me indirectly," says Wong, clad in a zipped-up Louis Vuitton hoodie and jeans.

Indeed, public opinion is lining up behind him. More than 85 per cent of respondents in a survey by the University of Hong Kong wanted more free-to-air TV choices. Over 200 industry veterans signed a petition calling for more TV stations. And his comrades are with him for the battle. A text message on his mobile phone, sent from one of the 220 artists and 500 people on production and creative teams he has hired, reads: "You have sold your son [the telecoms businesses]. Let's do our best together."

Wong is keen to respond to claims by TVB Group general manager Mark Lee Po-on that the government has not been clear about its broadcasting policy and that TVB has been kept in the dark about how many new licences would be issued. Lee argues there is not enough advertising revenue available to support new players.

But Wong says the government has long been clear about its plan to open up the domestic free-to-air TV market.

Pointing to a 1998 Legislative Council briefing paper on a government review of television policy, Wong says the only reason the market was not opened up earlier was constraints on the broadcasting spectrum.

"Under the new technology-neutral licensing regime, there would be no limit on the number of domestic free licences to be issued," the review paper read.

The paper said that because of the plan to open up the market: "Advertising and subscription royalties for all television and sound broadcasting licensees should be abolished."

Wong says the government has scrapped what it used to charge TVB - 9 per cent of the total locally generated advertising revenue - since 2000. He estimates TVB has already saved HK$2.4 billion in such royalties from the HK$26.6 billion in advertising revenue generated since July 2000.

"I don't understand why TVB doesn't know the government's policy," Wong says. "The government did not beg TVB to open up the television market. The government has already given TVB benefits [by scrapping royalties] and has been very clear about having no limit on the number of free TV licences."

Wong plans to produce 260 hours of drama and 104 hours of variety and infotainment programmes this year, followed by 650 hours of drama and 520 hours of variety and infotainment next year. Pre-production has been extended from three months to six to allow the creative team more time. CTI has reserved HK$2.8 billion for the development of TV and multimedia business in the long run.

His television station - if a licence is granted - will begin with five channels. A year later the number of channels is slated to rise to 12, then 20 in three years and 30 in six years. He has put HK$300 billion into the venture so far. He has also promised he will maintain an English-language channel, one of the licensing conditions for TVB and ATV.

In the past couple of months, Wong has taken a new direction in his battle for the licence, going from Mr Nice Guy to a high-profile figure challenging the delay publicly. He has appeared in press conferences, radio interviews and back-to-back media interviews to make his case. After all, the group's multimedia business, which includes TV, has already recorded a net loss of HK$73.8 million, according to CTI's annual report.

Wong does not buy TVB's argument about a lack of advertising revenue. Lee says the TV advertising market is worth HK$3 billion per year, a stark contrast with advertising monitor admanGO.com's estimate of HK$18.2 billion last year.

But Wong says the figure doesn't worry him - he expects his new channel to generate only half of its revenue locally, with the rest coming from selling content.

One episode of a TV series can, for example, be sold to a mainland web portal for between 600,000 and 800,000 yuan (HK$987,200). And Wong believes CTI's quest to offer something different will bring viewers back to terrestrial television.

CTI has already invested HK$87.6 million in programming, including drama series ranging from 10 to 30 hours per series. Four drama series have been completed and four more are in production - with the offerings ranging from a musical, a drama revolving around the controversies of plastic surgery, a crime thriller with supernatural elements, and even one youth-orientated drama tipped as Hong Kong's answer to the vastly successful Twilight vampire romance series.

It's a sharp contrast to TVB's tear-jerkers. "It's a misconception that people don't watch dramas any more," Wong says. "What takes up the greatest internet bandwidth is watching dramas. It's just that young people don't watch local dramas because of their poor quality. They watch Korean, Japanese and American TV shows."

Wong has long criticised TVB dramas for their lack of creativity and limited genre - a staple plot involves middle-aged people caught up in love crises. "How can you expect that to attract a young audience?"

But since last year Wong has targeted much of TVB's creative talent - from scriptwriters to directors and even production crew, as well as make-up and costume artists. Lee says Wong is criticising TVB's product while trying to hire away the very employees who produce it.

Wong responds: "These people are truly talented, but their talents will never shine under the [TVB] system. They are like leopards caged in a zoo. And I release them into a safari park. There, they can run as fast as they want."

Wong dismisses Lee's claim he was aggressive in his recruitment and was aiming to paralyse TVB's production.

"I didn't expect all 30 people I met would jump ship. I offered them only a 20 to 30 per cent pay rise, which is reasonable. Why is it my fault? Shouldn't [TVB] be alarmed and reflect on what went wrong? Their management didn't even know how many had left until months later.

"Do you know how much money they make? A director with 25 years of experience under his belt, creating shows achieving 30 to 35 rating points [an audience of 1.9 million to 2.3 million], can generate HK$3 million to HK$4 million in advertising revenue in one hour. And they are earning only HK$20,000 a month with no commission. But why did they stay [at TVB]? Because they have nowhere else to go, unless they go to mainland China."

Wong says CTI spends HK$1 million per episode on a drama series, against what he says is TVB's HK$300,000. Trailers for CTI's shows will make their public debut on December 4.

"We apply the techniques of shooting a film to making a TV show. All the scenes were shot on location," he says. "We once rented an office at Two IFC, which costs HK$80,000 per day. We rented it for two days, so that we could get a genuine harbour view where you can see ships actually move, not a poster backdrop like what you see on TVB."

But even if CTI wanted to shoot in a studio, it has a problem - it doesn't have one yet. Its 500,000 sq ft multimedia production and distribution centre, which will consist of 12 studios, is still under construction at Tseung Kwan O and won't be ready until 2014, at a cost of HK$800 million.

It has been suggested political reasons are behind the government's delay in issuing new licences. Reports have suggested Wong, perhaps mindful of Beijing's perceived wariness of expanded coverage of Hong Kong affairs, has played up dramas at the expense of news.

CTI's news programmes are currently carried by pay-TV concern bbTV over the Hong Kong Broadband Network, which CTI sold to CVC Capital Partners along with the IDD telecom business in May. Wong says editorial and current affairs programmes will remain unfettered and be integral to the operation.

Wong hopes his channels can break even within three years - but that can't happen without a free-to-air licence. He is confident the green light will come soon. TVB says it is ready to take legal action if licences are granted, while Wong is prepared to go to court if the permit doesn't materialise by the end of the year.

Wong has long insisted he wants to create a station that truly belongs to Hong Kong, a place he describes as free and creative.

"Hong Kong has become a very unhappy place. As a media person I hope to rebuild the pride Hong Kong once had. To some, this pride comes from money. But to me, this pride comes from our culture," Wong says.

"In the past, Hong Kong film exports made Bruce Lee and Jackie Chan household names around the world. We were a culture exporter. But our TV culture has deteriorated by a great deal."

News Article: TVB executive says no room for new players

I came across the below article today and it ticked me off to no end reading it! To be honest, the more TVB’s lame management keeps up their stupid antics, the more they are pushing people (audiences especially) to support rival stations! I, for one, am fed up with TVB’s recent stupidities and even though I haven’t ‘given up’ on them just yet, I’ve been ‘tempted’ to do so numerous times already (note that this is coming from a long-time supporter of TVB such as myself)….

Also, as I posted in one of the forums….

Just FYI…during the TLSA celebration dinner yesterday, TVB’s chairman Norman Leung said that that raising the pay of its employees is something they have already planned as part of the budget for next year and will definitely occur – nothing that anyone says will be able to change that.

So basically, Norman Leung is implying that his employee Mark Lee’s “threat” to cut pay, cut production, etc. (pretty much his ‘threat’ to ‘mistreat’ TVB employees’) is basically FULL OF CRAP! [Sidenote: All the stuff Mark Lee stated in the article sounds so déjà vu to me….ah, I remember now, I heard most of the same lame, stupid “threats” from the various politicians during the recent political campaigns here in California…]

It’s sad that TVB has such lame management running the company now….such a shame that they are single-handedly tarnishing the good name that Sir Run Run Shaw worked so hard for 40+ years to establish!

Speaking from the perspective of one “business person” to another: Mr. Lee, I don’t care what type of ‘certifications’ you may have…the fact of the matter is, you don’t know how to properly run a business. Smart, prosperous businesses put their people (aka their employees) first, their customers second, and their own investors/executives last…..but apparently TVB cares more about their investors/executives than they do about their own people and customers. I guess that’s what greed and the hunger for power can do to people!

And oh, btw, Mr. Lee – some people (like me for instance) don’t like to be ‘threatened’….so yea, keep it up and see how far you go!

**********

TVB executive says no room for new players
In the first of a two-part series, TVB executive Mark Lee Po-on discusses the threat and 'unfeasibility' of new stations in the free-to-air TV industry

Written by: Amy Nip and Vivienne Chow

Source:  South China Morning Post

If the battle over new free-to-air television licences is as much about public opinion as it is about the government's long-delayed decision, then TVB executive director Mark Lee Po-on is coming out swinging.

While a recent poll by the University of Hong Kong found that 85 per cent of the city's viewers want more choices, the two existing terrestrial stations, Television Broadcasts (TVB) and Asia Television (ATV), have been the most vocal critics, arguing that there is simply not enough advertising revenue to support more players.


"We are not against having more [fishermen] join us to catch fish, but you have to create more fish in the sea first," Lee said.

TVB is fighting the new licence applications by City Telecom (CTI) and subsidiaries of iCable and PCCW on three levels: on government procedure, public opinion and in the political sphere.

Lee has questioned the government's right to award new licences before TVB and ATV's latest licences (which were secured with the promise of vast investment) will expire in 2015. He is prepared to go to court to press the claim, and has written to all lawmakers, Executive Council members and board members of the Office of the Communications Authority for support.

"If others are escalating this [dispute] to this level, we have to follow," Lee said, perhaps referring to City Telecom chairman Ricky Wong Wai-kay's high-profile "please" for an answer on the licence applications, which the government has been considering for more than 1,000 days.

TVB planned to offer better benefits to its staff. From next year, they would work five days a week like many office workers in Hong Kong, and would get pay rises according to the inflation rate. But if anything goes wrong, the company would have to take the opposite direction.

"The bottom line is, if there's no money, we will have to cut costs. And there's no way we can improve the quality of our productions."

Would this be Plan B if more competitors emerge? "It would be inevitable," he says.

"The government must be clear about its logic and rationale [about granting more free TV licences]. It owes society an explanation on how many licences Hong Kong can accommodate. The government has never been clear," Lee said.

Commerce Secretary Greg So Kam-leung, he says, has been reluctant to even discuss the issue. "Greg told me: 'Mark, let's not talk about free-TV licences today.' What else can we talk about?"

Lee wants the government to clarify three things: how many licences it will issue in the long run, how it arrived at that number and when it will issue them.

According to Lee, the government's consultants never contacted TVB or ATV when they assessed the television market, raising concerns about the accuracy of their studies. Maintaining a tight grip on advertising and content, while introducing competition would kill the industry, the executive argued.

"There is no government around the world, which would bring in a few more stations, knowing they would fail in the end. Such behaviour is not responsible," he says.

But it seems the viability of stations is not the main concern of the city's viewers. While millions of eyes are glued to TVB's shows, audiences are quick to complain about programme quality and illogical plots.

Actor Raymond Lam Fung appears invincible to bullets or explosives in his role as a police narcotics officer in the action drama Highs and Lows. A bottle of oolong tea appears on Qing dynasty emperor Daoguang's desk in Curse of the Royal Harem. The same faces appear repeatedly in various shows: actor Law Lok-lam "dies" five times in different dramas aired on a single day.

Dramas tend to be restricted to a handful of genres featuring either an upper-class family's dispute, or the wives of an ancient emperor fighting for his love - the kind of tear-jerkers housewives enjoy after washing the dishes. It is in stark contrast to shows, such as Seven Women, that TVB produced in the 1970s, challenging viewers' minds and tastes.

And worst of all, some online users have nicknamed the station "CCTVB", accusing the broadcaster's news arm of taking its lead from the mainland's official broadcaster.

However, Lee rejects the criticism. He says TVB respects editorial independence and gives enough freedom to its creative team, allowing it to produce dramas like last year's hit When Heaven Burns, which won the hearts of young viewers (who usually reject free-to-air channels) with its subject matter - cannibalism - and political undertones.

But amid that creative freedom, ratings remain king, Lee says. "Why would [TVB] have to produce programmes that have low ratings? They can't generate revenue. No commercial operator would create products that have no market. We won't go against the market."

So, while ATV's major investor, Wong Ching, chooses to dance Gangnam Style outside the government headquarters during a protest against the licences, Lee, nicknamed "the maths man", centres his argument on the figures.

While licence applicants cite TVB's billion-dollar profits to support their argument that the market is big enough for more, Lee thinks otherwise. "It would be harsh for me to put it this way, but TVB is earning more at the expense of ATV," he says.

In 1996, TVB earned HK$2 billion from advertisements, while ATV earned HK$855 million. By last year, Lee's station was earning HK$2.8 billion, while ATV only had HK$100 million, he said.

Local television advertising revenue remains at about HK$3 billion, Lee says, much lower than advertising monitor admanGO.com's estimate of HK$18.2 billion last year.

And with ATV and TVB spending HK$2.5 billion between them, the money would soon run out if CTI lived up to its pledge to spend HK$1 million per hour on its proposed drama series.

There is a big difference between the two stations' revenue and admanGO's figures because they offer hefty discounts to major advertisers and frequenters, Lee, a member of the Hong Kong Institute of Certified Public Accountants, says. He worked for accounting firm KPMG from 1977 to 1987 prior to his television career that spans both TVB and ATV. "If there is indeed HK$18 billion worth of advertising, I won't really care how many stations there are," he says.

Advertising revenue has fluctuated in recent years, slumping after the severe acute respiratory syndrome (Sars) scare in 2003 and dipping again in 2009 after the economic crisis. When the economy goes down, advertising is the first thing many firms cut.

The amount that companies devote to television advertising has not increased as more channels have been added.

"Before 2007, there were four analogue channels in the city. The number went up to more than 10 after the introduction of digital channels, including our three [channels] and ATV's four," Lee said. "But having more channels doesn't mean more advertising revenue."

With more stations to choose from, he says: "Total advertising revenue could increase a little, but that definitely won't be a large increase."

And there are other challenges for the industry. Hongkongers work ever longer hours and are likely to become more selective about which channels - if there are more available - they should devote their time to.

"People need to work and to sleep. It's a global trend that they are watching less TV," Lee said.

There is also increasing competition in the ad market - internet ad revenues grew 27 per cent last year while magazine advertising was up, according to admanGo. "You can see all the outdoor ads in MTR stations. Video ads appear in buses' TV sets and even in lifts," Lee said.

He draws on his own experience at the helm of ATV between 1992 and 1996 to explain the likely consequences of too many stations competing for too little revenue. "You cut the costly local productions and buy overseas dramas," he says. Dramas produced elsewhere are available at a fraction of the cost of locally produced series.

"I cut the hours of drama production from 600 to 260 [at ATV]," he recalls. The struggling station, which ran two dramas of its own every day during the 1990s, has since purchased more dramas from the mainland and the rest of Asia for dubbing. ATV still produces variety shows, but local dramas have been completely wiped out.

Lee says the situation is aggravated by the government's reluctance to allow the stations to expand beyond Hong Kong's small market. While their signals spill over into the heavily populated Pearl River Delta, ATV and TVB are not allowed to air their own ads. Instead, they have to hand over the rights to the mainland authorities for a paltry annual fee of less than HK$100 million.

TVB has made overtures during discussions on the mainland-Hong Kong Closer Economic Partnership Arrangement, but there has been no sign of a breakthrough.

The uncertainty over the new licences has also stymied TVB's plans for overseas expansion, which might be risky. To step up its presence in the West, over the last six months it was planning an international version of the English-language Pearl channel to be broadcast on satellite stations. News would be its focus, mixed with travel shows and programmes about Chinese culture.

But Lee had to turn his attention to finding ways to fend off rivals, and he has harsh words for Ricky Wong. "I don't like the aggressive way he does things."

He says Wong's CTI plotted to poach half of TVB's 80-strong drama team in one weekend last year. "[CTI] wants to paralyse our operations. In the end, 25 of our staff quit. … If it is working for the well-being of the whole industry, it should train its own people instead of doing something this hostile.

"He keeps bashing our station's quality, but at the same time recruits our people and highlights what TVB dramas they worked on in the past."

But Lee strikes a more optimistic note when he talks of reforming the station's operations - regardless of the competition.

"People are craving openness, and we are heading in that direction," the TVB executive says.

For the first time ever this year, for instance, TVB invited members of the public to choose the winner of the Miss Hong Kong beauty pageant. But the experiment backfired, with the system crashing as millions of people tried to cast their votes. The winner was eventually chosen, as in previous years, by a panel of judges.

This has not deterred Lee. Viewers will be able to vote for their favourite actor, actress and drama in TVB's annual awards show at the end of this year.

It is also going to scrap its three-decade-old Jade Solid Gold Best Ten Music Awards Presentation in favour of a more authoritative show jointly organised by TVB and three radio stations. The show - which other stations say has yet to be finalised - will also feature public voting.

"TVB does not have hegemony. We want to give the power back to the people," he says.

Lee emphasises that his station is an institution. "Victoria Harbour, Ocean Park and TVB come to people's minds when they talk about Hong Kong. The wrong policy could crush the 45 years of achievements that TVB has attained."

In tomorrow's edition, City Telecom boss Ricky Wong Wai-kay shares why new free-to-air licences are a must.