Hong Kong television viewers could soon have more choice, with two companies seeking licences to operate new free-to-air services that would break the 30-year duopoly enjoyed by TVB and ATV. Telecommunications firm City Telecom has lodged its licence application, and cable-television broadcaster Cable TV also plans to apply soon. 'We believe the current duopoly limits innovation, and Hong Kong is falling behind other more liberalised markets around the world,' City Telecom said yesterday after filing its application with the Broadcasting Authority. 'The company is determined to provide the public with more choice of free-TV programmes.' The company expects to invest a maximum of HK$210 million in the venture. Its content would include news and infotainment, programmes covering arts and culture and programming for children, young people and the elderly. A spokeswoman would not reveal how many channels would be offered. Pay television operator Cable TV is also planning to enter the free-to-air market, though it has said nothing publicly about what it is proposing, nor given any indication of what it would show were the government to approve its bid. It hopes to submit an application within days. Its vice-president for external affairs, Garmen Chan Ka-yiu, said City Telecom's application would not affect Cable TV's plans. To Yiu-ming, assistant professor of Baptist University's school of communication, said the entry of City Telecom and Cable TV would only lead to partial competition in the free-to-air television market. 'It is impossible for the new free-to-air stations to compete with TVB on entertainment and music programmes, over which TVB has a monopoly,' To said. The professor said new entrants would have to fight for audience share by targeting the non-prime-time slots through programming such as variety and game shows. He thinks it is inevitable that more players will enter the free-to-air market. 'The technical barriers to market entry are not as high as before. Also, many newcomers are already operating in the pay-TV market,' To said. A Broadcasting Authority spokeswoman said applications were assessed on their merits. A free-to-air television licence requires a broadcaster to offer at least one channel in Cantonese and one in English. Secretary for Commerce and Economic Development Rita Lau Ng Wai-lan has said there is no limit to the number of licences the government can issue. City Telecom will probably meet the basic requirements to run a free-to-air station given that it is not affected by media cross-ownership issues. But there are key hurdles to overcome. City Telecom plans to transmit via subsidiary Hong Kong Broadband Network's fibre network, which would connect to the existing TV systems of buildings in order to reach individual households. HKBN's network covers about 1.62 million of the 2.2 million homes with televisions. City Telecom said it expects to be able to beam programmes to all of Hong Kong by 2016. HKBN, which offers video service over the internet for a fee, also does not produce a lot of its own content, which could make it difficult for City Telecom to offer 24-hour programming in a short period of time. However, City Telecom expects to be able to launch a free television service within nine months of being granted a licence. A company spokeswoman said it intended to broadcast both analogue and digital signals. Viewers would not need any additional equipment to receive analogue TV services and those without a digital TV set would be able to use any standard set-top box to receive its digital signals. They would not need a separate set-top box. TVB started broadcasting on November 19, 1967, a decade after Redifussion Television - later renamed ATV - took to the airwaves. The broadcasters' duopoly was interrupted briefly by Commercial Television, which gained a licence to broadcast in Cantonese in 1975 but got into financial difficulties and went off the air three years later. Having more free-to-air broadcasters would increase choice, and perhaps quality, for viewers. The government has long hoped to foster competition among broadcasters as a spur to improved programming. But TVB has dominated the airwaves for many years, raising serious doubts about the viability of struggling rival ATV and reducing the variety of programming. Both TVB and ATV said they would welcome fair competition and that it would benefit viewers. But the new broadcasters would be competing for a shrinking advertising market as people spend more time online. Although surveys conducted by Nielsen Media show 97 per cent of people watched television last year for an average of 4.6 hours a day, PricewaterhouseCoopers estimates Hong Kong advertisers' spending on television slots will continue to fall. The accounting firm expects television advertising spending to have declined 16.4 per cent last year, to US$2.16 billion, and forecasts it will fall another 2.17 per cent this year, to US$2.11 billion, before rebounding 3.3 per cent in 2011, to US$2.19 billion. TVB's advertising revenue last year was about HK$2.3 billion, according to its annual report. City Telecom chairman Ricky Wong Wai-kay joined ATV as chief executive a year ago, but lasted less than two weeks in the job. Ups and downs The average TV watcher spends 4.6 hours a day glued to the screen However, advertisers may be losing faith in their ability to sell them things. Advertisers' spending on TV slots last year is projected to have fallen: 16.4%
