The Government must tackle the thorny issue of pirate viewing before three new pay-television players enter the market next year. An appeal on the issue came in a submission to the Government from the industry body, Cable and Satellite Broadcasting Association of Asia. 'We hope to promote the pay-TV industry to make Hong Kong a regional broadcasting hub. But piracy - which is holding down growth in the sector - remains our deepest concern,' the association's executive director, Simon Twiston Davies, said. The association, which represents 110 members, including cable and satellite-system operators and regional broadcasters, submitted its views on the Hong Kong pay-television market to the industry regulator, the Information Technology and Broadcasting Bureau, headed by Carrie Yau Tsang Ka-lai. The submission, made in May, has been made public before the association's annual convention next month. The association said Hong Kong was a relatively small market in the context of Asia-Pacific with just 2.25 million households with television at the end of last year and about 2.88 million receivers. There were more than 520,000 cable-TV subscribers and about 450,000 households attached to satellite master antenna TV systems and 1,775 home-satellite antennae at the end of last year, it said. The association estimates more than 10,000 people in Hong Kong derive a significant part of their income from the pay-television industry. Annual pay television-related turnover produced by existing players - plus revenue generated by the regional advertising agencies - has reached more than US$1 billion per year in recent years. However, Mr Davies said regional content providers were becoming impatient about pirate viewing and the association would highlight the issue at its annual convention. '[There is] an industry consensus that the number of pirate viewers is about 100,000. They are 'stealing' . . . not only the TV signals, but also millions of dollars out of our pockets,' he said. The sole pay-television operator, i-Cable, runs 31 channels. Acquired channels account for nearly half of these such as Turner International's TCM and Cartoon Network, and CNN International and Star TV's Star Sports, ESPN, National Geographic and Star Movies. Next year, i-Cable will be joined by three new licence holders. Mr Davies said upgrading i-Cable's platform to a digital system might help solve piracy on the technical front. 'The Government should take a more proactive approach on intellectual property rights to create a friendly environment for copyright owners,' he said. The association also urged the Government to remove challenges posed by existing players to ensure fair competition. I-Cable has until now enjoyed the role of sole pay-television player in Hong Kong. New entrants are attempting to secure access to buildings to install set-top boxes. But an association report says this is proving time-consuming and costly as a result of lengthy negotiations with building owners. The report is also concerned about the lack of incentives for producing more content. 'Hong Kong's largest content provider, TVB [Television Broadcasts], has no incentive to produce pay-TV content for the market until June 2002,' the report said. Galaxy Satellite Broadcasting, the pay-television arm of TVB, has won the exclusive rights to carry five TVB pay-television channels when it rolls out services next year. The association said the Star Group and Hong Kong Network TV's withdrawal from pay-television licensing, and Galaxy Satellite Broadcasting's request to delay payment of performance bonds, underlined the difficulties that new entrants face. 'Their reluctance to launch in 'their own backyard' suggests a major rethink in policy should be undertaken,' the association said. However, government sources rejected the call to rethink pay-television licensing policy as there was no limitation on future applicants. 'The Government helps create a level playing field for players, but it is up to them whether to roll out pay-TV services if there is a viable business model,' a government source said. But the association maintained the local broadcasting industry was losing ground to Singapore. 'We believe that action is needed now to arrest the decline in our industry and the haemorrhaging of talent and revenues to Singapore . . . [we] feel Hong Kong's development as a broadcasting hub is going backwards.' Government sources disagreed that there was a decline in the local broadcasting industry, even though they admitted there was such a trend in the film sector. 'We have seen an increase in the number of licensees over the past decade, the industry is beginning to flourish. It is unfair to compare us with the Singapore Government as the governing philosophies are different,' government sources said.