Patrick Tsang On-yip, vice-chairman and executive director of Cable TV’s parent company i-Cable Communications, said giving up the licence was a critical step towards reinventing the company.
“The continuous strategic transformation of i-Cable will enhance the resources efficiency of our media business to take on the new opportunities arising from the structural changes in the local free TV market in recent years and eventually, create new value for i-Cable,” he said.
The sudden move reflected the inevitable decline in local paid-TV demand, analysts said, but also threw up immediate questions on the dwindling options for niche audiences, such as those preferring Cantonese for their news consumption and entertainment, from horse racing to documentaries.
The company said it planned to expand further into the local free-to-air TV market, building on its current three channels, which provide English-language news and entertainment. The free-to-air TV market is dominated by Television Broadcasts (TVB) and ViuTV, owned by billionaire Richard Li Tzar-kai, the son of tycoon Li Ka-shing. Richard Li is also the chairman of PCCW, which runs the city’s other main pay-TV operator, Now TV.
The company’s 12-year licence took effect in June 2017 and was scheduled to expire in May 2029 under a renewal approved by the Commerce and Economic Development Bureau in 2016. The broadcaster was required to funnel HK$3.4 billion (US$433 million) into capital investment and content production as part of the conditions of the renewal.
In its interim report last year, i-Cable said revenue in the first half had declined by HK$62 million to HK$431 million against a year ago, while net losses rose by 29 per cent to about HK$226 million for the same period. Subscribers were also leaving, falling from 731,000 at the end of June in 2021 to about 683,000 customers in June last year.
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A bureau spokesman noted Cable TV had struggled in recent years amid a “difficult business environment”.
“The surrender of the pay TV licence is purely commercially driven, and the government respects [its] decision,” he said.
The spokesman emphasised that the media outlet would have to protect consumer rights in handling the termination of agreements with subscribers and employment contracts with staff members.
The company said it had no plans for layoffs and was instead recruiting people. Online job search platform JobsDB lists 57 vacancies at iCable, including roles as receptionist, driver, production assistant, translator, reporters and editors.
A source said the company would not lay off staff as a result of the decision. Another insider said the newsroom running the paid channel had been informed that no workers would be laid off, but no similar guarantee existed for staff at other departments.
TVB general manager for content operations and actor Tsang Chi-wai welcomed newcomers to the free-to-air market, but culture critic Perry Lam expressed scepticism over the wisdom of the Cable TV’s new direction.
“People are not watching TV in the age of YouTube, TikTok and Netflix,” he said, adding audiences had been well aware Cable TV’s content had been dominated by reruns and third-party content.
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TVB has been struggling with its own financial challenges, posting a HK$224 million net loss in the first half of last year. The operator expanded into online shopping to generate growth while also relying on advertising income and subscriptions to its own programming.
Cable TV was launched by Wharf (Holdings) as Wharf Cable TV in 1993, and took the operator public in 1999. In 2017, iCable was sold to Forever Top (Asia), controlled by David Chiu, head of the Far East Consortium. Chiu’s father, Deacon Chiu, once owned the free-to-air Asia Television (ATV), whose licence was revoked in 2016.
In 2021, property tycoon Henry Cheng Kar-shun of New World Development bought a stake in Forever Top (Asia) and has since become the controlling shareholder of i-Cable Communications, which offers broadband internet, among other services.
In announcing the new requirements for free-to-air TV and sound broadcasting licensees, the government said that in addition to existing required broadcast hours of current affairs programmes, licensees must run at least 30 minutes on national education, national identity and the national security law per week.
TV stations are also required to “double the weekly broadcast hours of programmes for young persons”.
For radio stations, “on top of the existing 90 minutes required broadcast time of current affairs programmes, licensees shall also, in any one or more of its channels, broadcast no less than 30 minutes of programmes on national education, identity and security law every week”.
But it also allowed them to “lower the total required broadcast hours in English on the English radio channels from not less than 80 per cent to 55 per cent”.
Additional reporting by Cannix Yau
