HKTV’s free-to-air TV licensing saga explained

The Hong Kong government’s refusal to grant HKTV a free-to-air TV licence raises the question: is Hong Kong no longer the free market economy it used to be?

What happened?
In late 2009, the Hong Kong Commerce and Economic Development Bureau invited applications for free-to-air television licences to promote greater market competition. We currently only have ATV (亞洲電視) and TVB (電視廣播有限公司/無綫電視).

A twist on TVB’s logo x CCTV showing Hong Kongers dislike of China’s increasing interference in city affairs (Skyscrapercity)

After years of delay caused by ATV/TVB, on 15 October 2013, the Bureau finally handed down its decision to issue free-to-air licences to only two companies: PCCW Ltd. (香港電視娛樂) and I-Cable Communications Ltd (奇妙電視), and denied a licence to popular front-runner HKTV (香港電視).

The Hong Kong government refused to explain why it did not grant HKTV a licence citing the Executive Committee’s confidentiality rule. However, it commented that it was mindful of competition around advertising revenue for 5 channels.

People were seriously unhappy. In November, the Leung Chun-ying (梁振英) administration polled at the lowest ratings for 20 years (pre-handover).

No more shoddy TVB dramas? CY says no.
For years, Hong Kongers have complained about the substandard quality of locally produced content. New licences gave Hong Kongers hope that they might one day be able to watch something that’s not than trashy, poor quality TVB dramas or China-centric shows on ATV.

Even without a licence, Ricky Wong (王維基) invested almost HK$900 million (A$130 million) into HKTV and hired over 500 people, including many artists from rival TVB, to create more than 200 hours of drama content. He also purchase almost 800 hours of offshore programming. Towards the middle of 2013, HKTV began to release some of its content onto its YouTube channel to popular reception.

HKTV has a huge social media following now with 219,000 likes (Facebook)

Many believed that HKTV was the beacon of hope that would see a quality revival in Hong Kong’s ailing television industry.

HKTV had no choice but to retrench 320 people after the rejection.

HKTV searches for answers in vain
In response to the Hong Kong government’s unwillingness to provide answers, Ricky Wong accused it of being a “black box” institution which was not transparent, unfair and unreasonable (“不透明、不公平、不合理”). He also questioned whether there was any justice left in Hong Kong (“究竟香港還有沒有公義?”).

Ricky Wong: “Untransparent”, unfair and unreasonable (Reuters/WSJ)

HKTV sought judicial review of the decision, which was turned down. A bid launched by the pan-democrats to use its special legislative powers to probe the decision was also defeated. Lobbying conducted by the liaison office have led some politicians to believe that there was political interference from Beijing.

Some politicians have accused the government of not following due process. The Communications Authority accused the government of ignoring their advice to issue licences to all applicants as they all fulfilled financial and programming requirements. Top officials have also accused the government of not heeding their advice that granting 2 licences would be hard for Hong Kongers to swallow, especially after the Communication Minister’s comment that there would be no ceiling on the number of licences granted.

This is one very firey political hot potato.

Upon the back of this and backed by popular mass opinion, tens of thousands of protesters gathered outside government headquarters for successive days.

Hong Kong people have no shortage of excuses to protest (SCMP)

So, what now?
All legal avenues to review or overturn the decision have been exhausted.

However, for me, many questions remain:
(1) Why did the government reject HKTV’s bid?
(1a) Was it Beijing?
(1b) Was the government scared that by granting the licence, they could no longer control the very patriotic Ricky Wong?
(2) Was it wise of Ricky Wong to have invested all those resources into HKTV without first obtaining the licence?

What’s your take on all this? Is it eroding at the core of Hong Kong’s free market system or just a hugely successful media spin?

Wall Street Journal
Featured image courtesy HKTV 香港電視 Facebook