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
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."