24 October 2016
Leung Chun-ying is sitting on ATV's license renewal, sparking speculation he is doing it to prolong its life while it searches for a new owner acceptable to his government. Photo: HKEJ
Leung Chun-ying is sitting on ATV's license renewal, sparking speculation he is doing it to prolong its life while it searches for a new owner acceptable to his government. Photo: HKEJ

How Leung is using TV licenses as a bargaining chip

Chief Executive Leung Chun-ying is to blame for Hong Kong’s messy terrestrial television industry after he refused a license to Hong Kong Television Network (HKTV) two years ago.

It’s almost poetic justice that HKTV founder Ricky Wong appears to be within striking distance of such a license after all, following reports he is about to snap up struggling terrestrial broadcaster Asia Television Ltd. (ATV).

On Wednesday, HKTV denied any agreement in a stock exchange filing but that did not stop the market from speculating about a potential acquisition anytime soon.

Any such deal, however, will not undo the damage to the television industry from Leung’s ill-conceived policies for years to come. 

ATV’s license will expire in November this year but there has been no word from the government which should have decided on the matter last year.

Leung is evidently watching events play out like so much soap opera as the broadcaster struggles through its troubles.

Last week, major shareholder Wong Ching said ATV was within days of collapse after two potential buyers walked away from the table.

On Tuesday, Wong and other major shareholders were reported to have accepted an offer from Ricky Wong.

Again, the ball is in Leung’s court.

Given that his government gave no reason for rejecting the HKTV application, it’s conceivable that it will scuttle any deal for ATV involving Ricky Wong and not feel obligated to say why.

Meanwhile, it could hold off on ATV’s license renewal until someone acceptable to him comes along.

The alternative is a complete collapse of the 58-year-old franchise with the loss of hundreds of jobs and billions of dollars in investment.

And while all this is going on, Hong Kong people who have been demanding real choices and quality programs from the television industry, are left to sit and stew.

It should have long occurred to Leung that Hong Kong’s television industry has a problem, not so much on the part of broadcasters that continue to make money on poor-quality shows but on the part of the public.

And the reason is lack of genuine competition.

Leung’s broadcast policy has done nothing except encourage the status quo by keeping the market closed.

Sure, he can argue that ATV’s troubles stemmed from too much market competition but hasn’t he heard of a little thing called mismanagement?

How about self-inflicted injury? ATV hurt itself by refusing to innovate beyond the lackluster standards of the industry.

Not surprisingly, the government’s opaque decision-making is creating a cottage industry of conspiracy theories.

The most widespread links the issue to Beijing’s concern that the broadcast industry might fall into unfriendly hands.

Mainland officials, for instance, think that Ricky Wong’s aggressive business tactics and outspoken personality will turn the system on its head and upset their tenuous hold on the more liberal section of Hong Kong’s mass media.

Politics aside, the television market itself is under siege from new media.

The increasing penetration of mobile broadband and smart devices is shifting advertising dollars from traditional media to online channels.

TVB, Hong Kong’s dominant free-to-air broadcaster, has not been spared despite investing heavily to bring exclusive coverage of the World Cup football tournament last summer.

Net profit tumbled 19 percent to HK$1.41 billion last year, with revenue rising a dismal 2 percent.

The government has been saying it supports the development of the television market but has done little to encourage TVB and ATV to boost investment in their own growth such as more local productions and quality shows.

Hong Kong viewers have more than 10 free television channels to choose from, mostly foreign and a few from mainland China.

But for free local content, they only have TVB and ATV.

TVB has six free channels offering a mix of local productions and acquired titles from overseas while ATV has no original content apart from news and public affairs programs.

As a result, ATV has taken to digging up its archives, with an entire channel dedicated to re-runs.

And get this: more than a year after the government awarded free-to-air licenses to i-Cable Communications and PCCW Media, it has yet to give them the final go-ahead.

It used to be that a broadcast license was a means to serve the public good. Now it is looking increasingly like a regime unto itself — a government tool to advance its own agenda, whatever that might be.

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EJ Insight writer

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