It’s the best of times and the worst of times for Hong Kong’s television industry.
First, the good news: the city finally has a new free-to-air station as Viu TV kicks off its service today, promising to offer more programming choices for consumers.
Now, let’s come to the second part.
Hong Kong Television Network (HKTV), owned by media entrepreneur Ricky Wong, has again failed in its bid to barge into the free TV market, limiting the competition in the segment.
On Wednesday, the Court of Appeal ruled that the government need not reconsider the company’s application for a free-to-air TV license, quashing a lower court’s decision.
Wong’s license bid was rejected by the Leung Chun-ying administration in 2013, prompting him to lodge an appeal to the Court of First Instance.
The court gave a favorable ruling, saying the Executive Council failed to follow a pro-competition policy. Authorities were asked to reconsider the decision, but the government lodged its own appeal.
Now, the appeals court has ruled in the government’s favor, noting that vicious competition in the TV market is an issue that cannot be taken lightly.
In the three years since the rejection of a license to HKTV, Hong Kong’s television market has seen a paradigm change.
Last week, 59-year-old broadcaster ATV went off the air after it failed to get its license renewed.
ATV’s exit came as PCCW’s ViuTV was readying to enter the market, taking on existing broadcasters such as TVB and RTHK – which runs three free TV channels — as well as new Internet-based TV stations.
Chinese Internet TV platform LeEco (formerly known as LeTv) has gained a foothold in the Hong Kong market by offering more than 10 channels and video-on-demand service via customized smartphone and smart TV devices.
As broadcasters use various platforms to reach audiences in the current era, government-set limits on TV station numbers seem to be an anomaly.
HKTV was considered a front-runner in the television market three years ago when it launched the station via online platform.
The station won acclaim from the public as it aired high-quality drama series such as “The Election” and “The Borderline”.
However, its reach was limited to smartphones and smart TVs, making it difficult for HKTV to challenge the dominance of TVB.
Due to the license setback, the company shifted its focus to operating an e-commerce platform that involved huge investments.
Still, it continued to build a multimedia production center in Tseung Kwan O in the hope that it can make a comeback to the TV market.
Now, we come to this question: is it too late for HKTV to return to the free-TV market even if the government grants a license in the near future?
HKTV’s share price saw a significant jump earlier this week, before the court ruling, as there was speculation that the government could consider granting it a license.
There was talk that Beijing has checked out Wong’s background and is now convinced that there is no political agenda behind his TV dream.
If the rumors turn out true, it could be a matter of time before HKTV enters the fray.
HKTV can co-exist with Viu TV, given that the latter will focus on reality shows and infotainment programs while HKTV can concentrate on drama series productions.
Some industry observers have said in the past that HKTV may be pursuing a wrong strategy as it focuses on drama series productions, a segment where TVB has huge strengths.
But what HKTV wants to do, according its chairman Wong, is to protect the local Hong Kong culture through TV drama series.
Viu TV, meanwhile, is taking a new approach as it kicks off its free TV channel that will rely on reality shows, infotainment programs and talk shows, rather than locally-made drama series.
It is believed that Viu TV is trying to preserve cash for the long term, rather than make huge investments quickly on capital-intensive programming.
Given the dominance of TVB in the TV drama business, Viu TV will at best have small-scale productions in the segment and rely on new topics in a bid to satisfy viewers who have felt bored with TVB’s formulaic shows.
Viu TV is trying to explore a new model as it seeks to change people’s viewing habits that were almost frozen for more than four decades under the dominance of TVB.
Drama series may be a key element of program lineup for TV channels, but it will be difficult for local productions to tap the mainland market without compromising on story ideas and the artists.
Against this backdrop, drama series productions may not be good investment for long-term health of new channels.
What Viu TV want to do is to create a buzz through reality shows such as “Travel with Rivals”, as well as fiery talk shows, to raise public awareness about its new channel.
The innovative program model could help the station explore foreign business opportunities in the long term.
With the new free-TV station and the entry of various Internet broadcasters, there’s no doubt that Hong Kong’s television industry is entering a new era.
The market dominance of TVB will get reduced, offering more and better choices to viewers.
The government, meanwhile, must face up to the reality that its regulatory regime has not kept pace with new technologies.
Internet video platforms have rendered the government’s pay television license framework outdated, and led to unequal market competition between the license holders and new players.
ATV’s exit has left some air waves idle.
It’s time now for authorities to invite interested parties to bid for the freed-up spectrum.
Such move will not only help provide greater choices for viewers, it will also support the growth of the local television industry.
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