TV industry still divided over HKTV’s licence rejection

Three weeks after the government’s controversial decision, veterans familiar with the television industry remained divided over whether officials made the right choice in denying Hong Kong Television Network’s (HKTV) application for a free-to-air licence, while approving that of i-Cable and PCCW’s subsidiaries.

On Sunday, Exco convenor Lam Woon-kwong cited the view of the government’s consultant that, based on existing advertising revenue, the market could “barely support” two new players, in addition to TVB and ATV – and “it is extremely likely that someone would fail” in a competition among five licence holders.

This view is supported by veteran broadcaster Robert Chua Wah-peng, who estimated that in a five-horse race, an operating loss of HK$5 billion would have to be shared by the stations (based on HK$10 billion operating costs for the five stations and an estimated HK$5 billion TV advertising spend).

But Peter Lam Yuk-wah, vice-president of the Hong Kong Televisioners Association, questioned Exco’s and the consultant’s assessment.

Advertising revenue “should increase” when new players were added to the market, and television stations also relied on other sources of income, including fees incurred from licensing or selling their productions overseas, Lam said.

In an article published on the Post on Tuesday, Chua, who was a founding executive producer of TVB, wrote that he would have “recommended that the government award one free TV station licence instead of the two they did”, as viewership “will continue to fall as people turn to the internet for entertainment”.