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SCMP Reporter

The regulatory straitjacket on Television Broadcasts' loss-making pay-television business has been removed but it may be too late for the struggling operation.
Hong Kong's media regulator has lifted eight-year-old restrictions on TVB  that were designed to prevent the  dominant broadcaster gaining too much control of the pay-television market.
The  'firewall' arrangement was set up in 2000 when TVB originally won approval for a pay-television  licence in the  then-fledgling business.
Given the dominant position TVB had in the local free-television market, the government set out rules to avoid it gaining too much influence.
One of the conditions was that TVB should not hold more than 50 per cent of the company TVB Pay Vision.
Market watchers believe that the removal of the restrictions on  TVB Pay Vision may be too late, as it lags way behind rivals  i-Cable Communications and PCCW's Now TV.
Insiders estimate TVB Pay Vision had  150,000 to 200,000 subscribers by the end of last year, compared with Now TV's 880,000.
Behind the firewall, the company was restricted in taking programming from TVB, and also had problems accessing local households.
'We are now able to  deal directly with TVB on any exclusive content-supplying deal, while previously under the  firewall [arrangement], we needed to invite other pay-TV operators to join the bidding,' said a company source.
The firewall also meant limited investment choices for  TVB Pay Vision. In 2003, United States-based Intelsat took control of the company, but pulled the plug a year later by selling back the stake to TVB.
Dealmaker Charles Chan Kwok-keung and his See Corp took a 51 per cent stake in TVB Pay Vision in April 2005.  TVB now holds 29 per cent of TVB Pay Vision, but holds only 15 per cent of voting control; Angela  Leong On-kei, the fourth wife of  Stanley Ho Hung-sun, holds 20 per cent, while  49 per cent  is held by See Corp.
Formerly known as Galaxy Satellite Broadcasts, exTV and SuperSun, TVB Pay Vision is the only survivor of the four licensees awarded  pay-television licences in 2000.
Without a self-built territory-wide network, growth of TVB Pay Vision was limited until the company signed an agreement with  Now TV to sell TVB Pay Vision's package through PCCW's 2 million fixed-line households. The company also accesses households  through its own satellite delivery network in public housing estates.
Tom Group in US foray
Things are looking up for Tom Group, the media arm of  Li Ka-shing, with the company's television business accessing  about 3 million Chinese households in North America.
Tom's CETV announced  this week it had secured an agreement with KyLin TV in the  United States to carry the CETV channel in North America through internet protocol television and the internet. The agreement could help CETV reach millions of Chinese-speaking families in the region.
CETV is one of the four core businesses of Tom Group. However, due to lack of significant advertising revenue, the television and entertainment business  made a segment loss of HK$10 million  at the end of last year, with revenue of HK$211 million.
CETV was the first foreign satellite channel to secure landing rights in Guangdong province. But the channel is struggling to boost its market share in the local market and is now geared towards becoming a  multimedia channel instead.  Its original programmes, such as Big Time Spender, are already embedded with  interactive features, which allow viewers from any platform to join the programmes for games and feedback.
'Many of CETV's original productions have built-in interactive and  new-media elements that  are now available in various formats for distribution over a variety of non-traditional media platforms including broadband, internet protocol television and mobile,' a source said.



Liberalisation may be too late for market laggard TVB Pay Vision