A new free-to-air channel, ViuTV, on April 6, rippled the stagnant waters of the city's lackluster TV market with a novel reality show, pitting two incompatible local politicians to travel abroad as the odd couple. The audacity of the idea and the well-known personalities got much news coverage and free publicity.

Travel with Rivals claimed its first episode garnered 10.6 percent TV viewership, or 689,000 viewers - almost half TVB's loyal local fan base of 1 to 1.2 million. ViuTV's reality show was scheduled to time with TVB's regular Japan travel show.

Nielsen, the research firm which tracks TV program audiences, using an 800 household sampling base, estimated Travel with Rivals at 3.85 percent, or 250,000 viewers, which is about 1 million below TVB's audience. ViuTV countered that Nielsen only tracks the traditional TV box, whereas its show leveraged online videos and mobile apps distribution as well.

Anthony Fung Ying-him, director of the School of Journalism & Communication at the Chinese University of Hong Kong (CUHK), believes the viewing audience expanded with ViuTV's Travel with Rivals and broadband distribution. Between the Nielsen figure of 250,000 and the 689,000 claimed by ViuTV, a new set of viewers were accessed, beyond the traditional TV market.

More Free TV?

In late May, the government announced a free TV license for Fantastic Television Limited, which will launch its integrated Cantonese channel within a year and an English language channel in two years.

Secretary for Commerce & Economic Development, Gregory So Kam-leung, said that free TV consumers will benefit from greater choice and more local content from the increased competition. Fung, however, sees tougher times for Fantastic TV than ViuTV, as the traditional TV market is saturated with no obvious content gap left.

ViuTV seems focused on entertainment programs, like reality TV shows, which are dominated by mainland TV players. News reporting is already served by Fantastic TV's parent i-Cable. TVB enjoys an unshakable historic lead in local TV drama serials. Where would Fantastic TV fit?

Reduced advertising

An important local content inhibitor, according to Fung, is the tiny TV consumer base of only 7 million viewers, which cannot generate the level of advertising revenue to pay for quality local productions. On average, a 20-episode Hong Kong drama will cost about HK$3 million. A similar production on the mainland will incur more than HK$20 million and be strongly sustained with advertising support.

When HKTV founder Ricky Wong Wai-kay was pitching for a free TV license, he reportedly spent HK$1 million per drama episode. As he was not granted a free TV license, he could only broadcast his shows online. Fung fears the lack of advertising support for online shows is a major challenge. The investment in local production cannot be recovered from online advertising alone.

The online broadcasting market will continue to fragment into special-interest niches, said Fung. He cited the examples of LeTV and Taobao, a major online shopping platform by Chinese e-commerce giant Alibaba Group. Both have evolved from single-function to multi-function platforms, offering a range of e-commerce services to customers. Hong Kong broadband content providers have no such digital architecture, said Fung.

Local content leadership

Fung concedes there is a demand for local content in Hong Kong, which favors TVB's lead over its competitors, although it must adapt to the changing times, to stay ahead.

Cheong Shin-keong, general manager of TVB, acknowledged that the industry has undergone a sea-change of technology which has multiplied service providers, channels, devices and on-demand consumer choice. In this new competitive space, there are plenty of canned programs available from abroad.

However, Cheong feels local programming, using local talent, in stories with local context, remains very relevant. TVB has a long established ecosystem of talent development, local scriptwriters and stories which engage the Hong Kong audience. That is the space TVB has to dominate, within the changing broadcast landscape, for its domestic and diaspora audiences.

stushadow@chinadailyhk.com

(HK Edition 06/20/2016 page8)