It was only a few years ago in 2013 that a major controversy blew up when the Hong Kong government rejected HKTV’s application for a free-to-air TV broadcasting license.
Since that time, we have seen ATV – the world’s oldest Chinese-language TV station – go into liquidation after losing more and more money. Meanwhile, its rival TVB has been experiencing falling profit in recent years. Even cable and satellite TV models are looking dated. As some people pointed out, perhaps HKTV was lucky to have its application rejected.
It’s not that people don’t watch TV any more. But they are watching internet-based services. Some are major subscription services like Netflix. Some are local online broadcasters run by traditional or new media companies. And some are amateur videos distributed on YouTube or Facebook – either created by local groups or from anywhere in the world.
Broadcast free-to-air TV is just one example of a big, growing, profit-making industry turning into a declining money-loser. In the media sector in Hong Kong and around the developed world, printed newspapers have suffered falling circulations and rely increasingly on digital versions for readership.
It’s not just in media, and of course it’s not just in Hong Kong. New business models – often enabled by new technology – are overtaking traditional structures in a huge range of industries.
As a result, some forms of government regulation look outdated or irrelevant. Television broadcasting licenses are treated like a precious and scarce resource, when in reality no one in the future is likely to want one.
While unregulated on-line broadcasters are not a threat to the community, new business models in other sectors pose potential economic problems. One example is fintech. New methods of financing could in theory lead to major problems – which is why mainland authorities are struggling to clamp down on on-line savings and loans operations.
Hong Kong’s securities and futures commission is rising to the challenge by establishing a fintech “sandbox”, where startups or new services can operate under special supervision. Examples include services like robo-advisors, which offer automated investment management advice.
If such ideas sound a bit too much like science-fiction, it may be because of your age.
People of my generation were brought up to believe that being a financial advisor was a safe and very good job if you had the right human skills. Today’s young people have to ask themselves whether jobs will be so secure in future.
Interestingly, they seem aware of this. Just a few weeks ago, I talked to students at a financial services careers day organized by the financial services development council. One specifically asked me whether AI would replace humans in the industry.
Disruption also makes life harder for retail investors. What seemed like a safe stock 20 years ago might be worth little today. Taxi licenses in Hong Kong have traded at around HK$7.25 million each. The arrival of Uber and other ride-hailing apps created a lot of uncertainty – the licenses are trading for around HK$6.3 million right now. The Consumer Council, and public opinion, are increasing the pressure for liberalization.
The bicycle sharing craze on the mainland has led to bubbles, but we can see a future where autonomous electric cars and buses are booked and paid for from your phone. Not just taxis, but the whole existing model of private and public road transport could vanish.
My one fear about all this integration of digital data, AI and other technology is that so much of our personal details and wealth end up stored in an electronic cloud. We will need far better security and privacy protection than we are used to today.
For the business community, the rapid rise and fall of business models is the big story of our era. Make the wrong decision, and millions of dollars are lost. In China, the US and other places, developers invested in major shopping malls, only to find that on-line shopping took many of the customers away.
We have no idea where this sort of disruption will happen next. Will multi-story urban farms displace some rural agriculture? Will someone devise a way to integrate housing and workspaces so we use buildings 24 hours a day? The idea of movies on demand in your home sounded absurd a few decades ago.
The other thing we know is that on the whole the big winners from these changes will be consumers. They will see new choices, new services, more convenience and – most of all, probably – lower costs.
But for governments, investors and job seekers – the world will become more uncertain than ever.
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