Why is ATV not keen on HKTV's content partnership offer?

April 16, 2015 15:15
Ricky Wong's offer to air HKTV shows on ATV has met with unenthusiastic response from the other side. Photo: HKEJ

Has Asia Television (ATV), Hong Kong's oldest television broadcaster, given up on its programming and is merely going through the motions before it shuts shop next year?

It would appear so, given the lack of enthusiasm shown by the station to an offer from Hong Kong Television Network (HKTV) to breathe some fresh air into the terrestrial broadcaster through a content partnership.

After being denied a fresh free-to-air license by the government and given a one-year notice to suspend operations, ATV doesn't seem to be in the mood for new programming initiatives, as HKTV boss Ricky Wong is finding out.

In an offer which he described as win-win for both ATV and HKTV, Wong had proposed to air his station's dramas and other programs on ATV channels.

But three days after receiving a written proposal, ATV's reaction has been distinctly lukewarm.

In a blogpost Wednesday, ATV's executive director Ip Ka-po questioned the merits of Wong's offer, saying the proposed partnership might not be really beneficial to the troubled broadcaster.

He pointed to reports of a decline in viewership for HKTV shows aired online and also said the HK$5 million a month that Wong had offered to ATV for airing his station's programs was too low.

"I think cooperation can be discussed, but the minimum monthly payment of HK$5 million is not that sincere to clinch a deal," Ip wrote.

He said he was offering his personal view and that ATV's board is yet to discuss the matter. 

Meanwhile, he also said that there are other parties who are interested in a content partnership with his station.

Going by his comments, it is apparent that ATV doesn't think too much of Wong's offer.

Now, let's take a look at what exactly Wong had laid out on the table.

According to a regulatory filing from HKTV, it had offered to provide four hours of programming per day to ATV until the end of December, supplying about 1,000 hours of shows in total. 

In return, HKTV will split the advertising revenue on 50:50 basis. The company has also given an assurance that ATV will receive a minimum of HK$5 million each month in connection with the broadcasting arrangement.

Now, why is Ip not enthused about the HK$5 million minimum payment per month offer? One answer could lie in the extremely high operating cost base of ATV.

According to reports, the station's monthly operational costs including wage expenses, electricity bills and other overheads amount to about HK$30 million. Thus, HKTV's HK$5 million-a-month offer won't come anywhere close to resolving ATV's financial woes.

ATV may indeed have some ground to question the financial aspect of the arrangement, but what it seems to forget is the larger interests of its viewers in the remaining months that it is still on air.

Should the viewers be deprived of fresh programming just because ATV is preoccupied with internal problems -- this is the question on people's minds.   

If ATV and HKTV reach an agreement, it will no doubt be good news for Hong Kong people. So why is ATV resisting the partnership?

Does it have anything to do with not wanting to rub the Leung Chun-ying administration the wrong way?

In October 2013, the Leung government denied a free-to-air TV license to HKTV even though the Communications Authority, the media regulator, had been in favor. That forced HKTV to eventually opt for broadcasting over the internet.

Now, if HKTV programs are aired on ATV during the latter's final days and draw massive viewership, it could be seen as a vote of no-confidence on Leung's decision on HKTV two years ago.

ATV, though it needs to shut down on April 1 next year, still needs to provide normal television services during its remaining days. The station could clearly do with some content partnership, but does it feel that taking in HKTV will be risky in political terms?

Is the political factor overriding normal business considerations? This is what is agitating the minds of observers following the latest developments.

One should, meanwhile, note that the government doesn't seem to be interested in giving any new boost to the television sector after the recent decision not to renew ATV's license.

The spectrum left by ATV will partly transfer to the government-owned Radio Television Hong Kong for offering analog free-television services, while some will be left for other interested parties such as the new broadcast licensees -- Hong Kong Television Entertainment and Fantastic Television.

-- Contact us at [email protected]


EJ Insight writer