TVB shares jump amid clearer picture
The share price of Television Broadcasts hit a five-year high yesterday - closing up 3.51 per cent at $50.05 - as investors backed a clearer outlook on its pay television and China operations.
Expectations that TVB PayVision, the pay-television business of TVB, will gain approval from the Broadcasting Authority on Friday for an alliance with fixed network operator PCCW drove the stock price up to its highest level since April 2001.
TVB PayVision plans to deliver its 20-channel package through PCCW Now Broadband TV next month, giving it access to more than two million households.
Under the terms of the deal, TVB will pay PCCW a monthly service fee of $50 per user for the use of its Now platform, charging a package price of between $100 and $120 per month to its users.
An analyst from a local brokerage firm, however, expressed doubt over whether TVB could make the business profitable given the high service fee charged by PCCW.
Rival i-Cable Communications, the largest pay-television operator in Hong Kong, is promoting its exclusive coverage of the World Cup football in Germany this June in a bid to lock up customers, offering new subscribers a standard tariff plan of $308 per month on a 24-month contract.
'I-Cable can lock up high average revenue per user customers before it starts to compete with the TVB/PCCW alliance next month,' an industry source said.
Meanwhile, TVB has benefited from an easing of the regulatory framework for television drama co-productions in China which allows foreign media to partner mainland firms to broadcast on prime time television. Previously, prime time evening slots were restricted to local productions.
TVB will generate more income through its partnership with mainland broadcasters such as Shanghai Media Group, an analyst said.