Desperate Housewives is one of TVB Pearl's hottest shows. Photo: TVB

Translated by Andrew Vanburen from: 香港免費電視市場在加热中 (中文翻譯,請看下麵)

TIMES ARE A CHANGIN’ in Hong Kong’s free, public access TV broadcast sector.

But unfortunately for both Hong Kong regulators and consumers alike, the process will likely not be as static-free as originally intended.

The Special Administrative Region’s (SAR) industry for non-pay TV has been dominated for nearly four decades by terrestrial-broadcast owner of TVB Pearl -- Television Broadcasts Ltd (HK: 511) – as well as ATV World, with both giants sharing roughly equal ad revenue and ratings as well.

However, licensing reforms along with competition from ‘new media’ coupled with the economic downturn are resulting in a drama of ‘made for television’ proportions when it comes to trying to shake up the two firms’ market dominance.

PCCW is pondering free TV. Photo: PCCW

The SAR is committed to opening up the free TV market to more competition by increasing licensing issuances and making the process less prohibitive.

This has led to market speculation that listed peers including City Telecom Ltd (HK: 1137), mobile and broadband giant PCCW (HK: 8) and i-CABLE Communications Ltd (HK: 1097) unit Fantastic Television Ltd will soon jump into the fray to vie for their piece of the lucrative pie.

The three aspirants already have some experience in the pay television broadcast sector and can therefore leverage their strengths in existing equipment and network assets to forge ahead with their strategies in the non-pay market.

This will empower the newcomers with the ability to customize their services to specific high-revenue target market demographics, thus saving a considerable sum vis-à-vis the existing giants in terms of broadcast equipment and startup fees.

Expecting Company? TVB's Hong Kong office. Photo: Guni Wudao

Insiders will tell you that one of the toughest jobs in TV broadcasting – free or otherwise – is cultivating and then maintaining a core viewership.

Without the ratings and raw numbers, no advertiser would touch unpopular programming with a ten-foot pole, and thus revenue would soon slow to a trickle.

The three firms rumored to be eyeing the free TV market have already invested on average less than two bln hkd apiece in the pay broadcast sector.

City Telecom has been more direct in its plans to throw its hat into the free TV market.

However, the existing free-TV players still hold advantages in hardware, software and human capital in terms of the ability to attract and retain writers, producers, actors and support staff – and even production sets.

Therefore, unless PCCW and i-CABLE step up to the plate with more assertiveness, it is unlikely that Television Broadcasts and ATV World will be relinquishing any of their market share or advertising revenue anytime soon.

TVB recent price: 43.20 hkd

And with TVB and ATV currently committed to market investments of over 6.3 bln hkd and 2.3 bln, respectively, within the next six years, as it stands the market does not seem to have a considerable amount of wiggle room for new entrants given the scale of the existing free-TV players’ financial commitments.

In other words, although the market is growing, so are the current market leaders.

On the surface, this may appear to crowd out considerable opportunity for newcomers.

But in fact, with ‘new media’ growing much faster than traditional free television service providers, there is nothing to suggest that the broadcast landscape of tomorrow could forge financially synergistic arrangements between new players and ‘new media’ innovators to provide unforeseen revenue streams for a wider roster of participants.

See also: PCCW: Breaking Up Hard To Do?


(文: 古你唔到)












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