Hong Kong’s market-leading terrestrial television broadcaster, TVB has been granted renewal of its domestic free-to-air (FTA) broadcasting service licence for 12 years until 2027. The award is subject to a mid-term review in 2021. TVB’s licence was last renewed in 2002, with a validity of 12 years from 2003 to 2015.
TVB was founded in 1967 and runs five FTA channels in Hong Kong, including flagship channels TVB Jade and TVB Pearl. Its first broadcasting licence was awarded in 1967. Until today, its programming has been widely consumed by the overseas Chinese community via a subscription satellite service.
The Hong Kong Commerce and Economic Development Bureau set several conditions on TVB's new licence:
- To commit to a six-year investment plan of HK$6.3 billion ($813 million US) for the year 2016 to 2021, comprising HK$6.2 billion programming investment and HK$0.1 billion capital investment
- At least 12,000 hours of programmes on its service will be local productions, representing 27.4% of the total
- To increase investments in independent local productions from 20 hours to 60 hours per year by 2020
- On its digital channels, TVB has been required to provide an additional four hours of 'positive programmes' per week. These include current affairs programs, documentaries, arts and culture programs and programs for young audience. All must be first-run programmes with 60 minutes per week for each genre.
TVB’s licence renewal was expected, considering its strength in the Hong Kong television market. According to the Communications Authority of Hong Kong, TVB commanded more than 60% of the country's TV viewing and TV advertising of above 50% between 2006 and 2010. However, the company reported a slowdown in its Hong Kong television broadcasting revenue contributed by the softening of the overall market. Its TV advertising revenue grew 3% in 2014, relatively lower than the 22% growth it reported in 2009-2010.
Its long-time rival, Asia Television (ATV) was last month denied the renewal of its licence and will cease broadcasting on 1 April 2016. Formerly known as Rediffusion Television, ATV is the oldest broadcaster in Hong Kong. It started as a pay cable television in 1957 and later joined TVB in terrestrial broadcasting in 1973. The two legacy broadcasters had been battling since then, alongside public-funded broadcaster Radio Television Hong Kong.
Following ATV’s rejection, a FTA broadcasting licence was granted to Hong Kong Television Entertainment Company (HKTVE), a subsidiary of telco giant PCCW. With the parent company's capability, HKTVE will run its channels through the fixed-line network, instead of via television antennas like TVB and ATV.
HKTVE has pledged a six-year investment of HK$1.3 billion focusing on original and acquired programming, dwarfing TVB’s investment plan (which is unchanged from its 2010-2015 spending). HKTVE's heavy investment is inevitable considering its late entry to the market and TVB's massive library of programming, some of them evergreen drama series. In its proposal, the late entrant also promised to diversify content offering by showing sports, news and variety programming. PCCW has acquired FTA TV and pay TV rights to some world-class sporting events popular among Hong Kong viewers, including the Barclays Premier League, Spanish La Liga and ATP tennis.
PCCW owns Now TV, the largest pay TV provider in Hong Kong with about 1.2 million subscribers. TVB transmits its pay TV service TVB Network Vision through the Now TV platform. The service is making a loss, reporting only 200,000 subscribers at the end of 2014.
The industry is also anticipating a new FTA broadcasting licence applicant in the shape of Fantastic TV, owned by pay TV provider, i-Cable. The application is pending the authority’s review. In view of TVB’s position, IHS expects the authority to allow more FTA broadcasters, to address fears of a deterioration in programme quality caused by the lack of competition which will eventually lead to loss of attractiveness for FTA television.