Since last year, Hong Kong’s smaller free-to-air television broadcaster Asia Television has been going through a deep financial crisis.
It had to postpone the payment of staff salaries for months, and it had to wait for the last minute to pay the government license fees.
As days and weeks unfold, ATV is fast losing its justification as a licensed provider of television services.
The government should act now and show its resolve in maintaining a fair and just environment in the city’s television market.
Since its cash flow for daily operations has been reduced to trickles, the TV station has no recourse but to unload its treasured program archives for cash. So far the broadcaster has already sold several thousand hours of old programs to companies like China 3D Holdings and Television Broadcasts Limited.
TVB and ATV have been fighting each other for local television dominance for decades, although TVB has been dominating the market in recent years amid the frequent changes in shareholding structure and management at ATV.
From TVB’s perspective, ATV’s continued presence indicates that the local free television market is still competitive. But once ATV collapses in the absence of fresh shareholder support, TVB will become the sole player in the market.
That could raise public concern as TVB would be seen as violating the anti-competition regulatory framework, which in turn could cast a cloud of uncertainty over its growth potential.
As such, it is in the best interest of TVB — not to mention that the deal would be a bargain — to acquire the rest of ATV’s old program archives, save its rival from collapse and avoid regulatory intervention.
In fact, TVB has plans to roll out a new channel based on ATV’s old programs that it has acquired, including old television drama series and classic movies. The new channel will be part of TVB Network Vision, a pay-television platform.
In effect, ATV will be drawing its lifeblood from the screen of its chief local rival.
Another proposal being bandied about is for TVB to acquire a small stake in its cash-strapped rival.
This will allow ATV to get the cash it needs to pay for staff salaries and obligations to suppliers without having to cash out of its program archives.
TVB can also benefit from the survival of ATV and bolster its share in the local advertising market. That seems a win-win deal for both broadcasters.
But of course, such a deal would not secure support from the regulator and the government.
The current media regulatory framework has a firewall mechanism that prevents cross-media ownership. Under existing rules, a licensee cannot take control of another licensee in the media sector, otherwise it will need a special consent from regulators, who in turn will impose certain conditions before approving such a deal.
So far the government is adopting a wait-and-see attitude. It is setting aside the ATV license issue until the broadcaster is able to secure new investors.
But based on recent news reports, such a transaction is unlikely to happen anytime soon as Wang Zheng, the broadcaster’s largest shareholder, insists on selling his stake at a premium to cover his investment in the past few years.
The deadlock is hindering the growth of the city’s media industry. Precious spectrum resources are being squandered through the broadcast of old shows from program archives or replays from China Central Television channels.
Still, ATV can seek new partners to fill its air time, rather than just rerun old drama series and movies.
One potential partner is Rupert Murdoch’s 21st Century Fox, which plans to lure local talents to produce miniseries for international audiences at US$1 million per episode. The new shows will be aired on Star Chinese Movie Channel on a pay-TV platform.
ATV should tap Star as a broadcasting partner for new series on its free TV channel in a bid to better utilize its spectrum resources. That could be a better option for a new revenue stream, rather than just selling its old archives to TVB.
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