In what insiders described to be a reluctant move given the lack of tangible government support, Hong Kong’s free-to-air broadcasters Television Broadcasts (TVB) and Asia Television (ATV) rolled out digital TV services on the very last day of 2007 to meet the government-mandated deadline, as part of the preparations for telecasts of the Beijing Olympics in August 2008. The sporting extravaganza is expected to be keenly watched by Hong Kong viewers with equestrian events to be held in the Special Administrative Region’s (SAR) Sha Tin. At launch, the DTT network covers 50% of Hong Kong including the Kowloon peninsula, the northern part of Hong Kong Island, part of Sha Tin and the eastern part of Lantau Island. The government is assisting ATV and TVB to construct their digital networks to provide up to 75% coverage by August 2008. Speaking at the DTT launch, secretary for Commerce and Economic Development Board (CEDB), Frederick Ma lauded, “Hong Kong will enter a new digital broadcasting era which will bring to viewers a wider array of quality TV programmes and entertainment, as well as a brand new audio-visual experience. The use of digital technologies could release spectrum for the development of new multi-media services and lead Hong Kong to scale new heights in the technology arena.” For the DTT service, TVB and ATV are simulcasting in digital format their four existing TV channels, Cantonese channels TVB Jade and ATV Home, as well as English channels TVB Pearl and ATV World, and have launched new free SD and HD channels. Both will continue to broadcast the four analogue channels to allow viewers to switch to digital broadcasting at their own pace. TVB’s general manager – broadcasting Cheong Shin Keong observed that the promise of new digital SD and HD channels has been a key driver of digital TV adoption, and believes that TVB is well positioned to fulfill that promise with much of its self-produced content already made in native HD, and the remaining being upconverted. TVB’s newly-launched HD Jade channel mirrors primetime shows on TVB Jade, and offers acquired HD shows and TVB Pearl’s English programming during the shoulder-prime period, as well as consumer-targeted financial show Money Smart during the fringe periods. HD Jade is also to convert to a 24-hour dedicated Olympics channel during the games to air Olympics related-programming and live HD coverage throughout the event. “According to our estimates, TVB’s channels win about 70% of channel share during primetime on weekdays, hence HD Jade will make the greatest impact by providing the content which already airs on our analogue channels,” explained Cheong. Citing the lack of spectrum as the main inhibiting factor, Cheong revealed that TVB will not launch more HD channels in the immediate future, but is currently working on an interactive channel, Interactive Information Channel (working title), scheduled to debut by mid-2008, in time for the Beijing Olympics. Cheong also cited a recent survey which found that 4% of all households have bought digital TV receivers within one month of the DTT launch and expects that to increase steadily. “Sales of TV sets in Hong Kong top 400,000 yearly, equivalent to 17% of all households acquiring new TV sets each year. Assuming there’s one TV set in each home, we can expect 100% migration from analogue to digital in 6-7 years time,” Cheong mused. He also added that the first DTT set-top box (STB) integrated TV set has launched and expects 6-7 different models to be available by August 2008. On the other hand, ATV rolled out four digital SD channels including inhouse produced News & Business Channel, male-targeted His Channel and female-targeted Her Channel, culture-focused Plus Channel and 24-hour CCTV 4 Channel, along with the ATV HDTV channel. ATV also invested some HK$600million (US$76.7million) into its new broadcast centre in Tai Po Industrial Estate which measures 550,000 sq feet in floor area, with four new studios, eight variety and drama studios, and a range of digital broadcasting facilities. The debut of the new channels also followed ATV’s launch of a new logo and programming slate in a bid to wrestle back market share from dominant broadcaster TVB, and to win advertiser-targeted 14-35 year-old audiences. The makeover followed Cha Chi-ming’s family’s take over of the company in April 2007 and a reported injection of HK$100million in funds. Speaking in October 2007, Ho Ting-kwan, former TVB executive who is COO at ATV said, “We need to build up a younger image to attract youngsters to switch on to us, as they have the consumption power that advertisers would like to target.” The broadcaster is also looking to revamp its much-criticized programming offerings which have been dominated by acquired programmes from mainland China. ATV’s tri-colored label has since given way to a new bright orange logo in October 2007, and the broadcaster has commenced production of original programming with a focus on infotainment for local tastes with an intellectual slant to differentiate itself from TVB whose forte is drama. Partnering third-party production houses, ATV promised to air more than 10 locally produced infotainment programmes to offer local entertainment news, film criticism, stand-up comedy, as well as travel and leisure documentaries. In pay TV, a key development has been the growth of now TV subscribers to 882,000 in December 2007 to surpass i-CABLE’s last published subscription figure of 830,000 in June 2007. Even as i-Cable has yet to announce its 2007 year-end subscription figures at the time of writing, now TV has claimed “a leadership position” as the world’s first IPTV service to outperform cable TV in subscriptions. now TV’s subscriptions grew 16% year-on-year and were up by more than 8.5% from its June 2007 figure of 812,000. Revenue shot up by 70% from increased subscriptions and average revenue per subscriber. Based on the last available figure, i-CABLE’s subscribers grew only 5.6% from 786,000 at the beginning of 2006 to 830,000 in mid-2007. Expanding its offerings throughout 2007, now TV launched HBO On Demand; seven self-produced now SPORTS channels featuring football competitions and international sports programming anchored by locals in March; Foxcrime and FX channels in April; as well as The History Channel and Crime & Investigation Network in June. July saw PCCW and Ocean Park launch the Panda Channel to air live feeds of pandas to the former’s quadruple-play delivery platforms. Also, HD debuted on now TV in July with the commencement of 90 Barclay Premier League matches to be aired in HD on now SPORTS HD channel, which also features Italian Serie A, Stanley Cup and will broadcast the upcoming UEFA European Football Championships in June 2008. VOOM HD was added in July, while TV securities trading platform, Hang Seng TV Securities Trading Service was unveiled in August. In October, interactive Yellow Pages directory service YP Channel was introduced, along with now NEWS, an in-house produced news channel which allows viewers to vote using the now TV remote on social and political issues daily. BBC Knowledge, BBC Lifestyle and CBeebies were also added. HD documentary channels National Geographic Channel HD and Discovery HD were introduced in December, before Shanghai Media Group’s China Business Network debuted in March 2008. 2007 saw i-CABLE concentrate on building up key sports content for the future by securing new media rights to the Beijing Olympics, broadcast rights to the 2010 FIFA World Cup in South Africa, as well as exclusive rights across all media to the 2010 Vancouver Winter Olympics and 2012 London Olympics. i-CABLE’s 2007 channel launches include PGA TOUR which carries international golfing action, Neo Sports to offer Indian cricket programming with 150 days of live coverage, and Al Jazeera English, the Middle East based global news and current affairs channel. On offering HD channels, Benjamin Tong, executive director – Hong Kong Cable and i-CABLE WebServe Ltd noted that i-CABLE is capable of supporting HD broadcast. “We are currently upgrading various aspects of our infrastructure and will roll out new generation STBs before the end of 2008 for the introduction of new services including HD and interactive. However, at this stage, we do not have a precise timetable for the introduction of HD programmes, the timing of which will depend on market acceptance,” he elaborated. When quizzed about the impact of digital free-to-air TV on pay TV, Tong asserted, “Launched in late December, 2007, DTT has only been in operation for a short period of time in Hong Kong. Its impact on the Hong Kong pay TV market, if any, has yet to become apparent.” He points to 10,000-plus hours of self-produced content, the variety of acquired programming, and over 100 channels as draws of the i-CABLE pay TV service. now TV’s Dominic Leung, managing director, television & content, PCCW observed, “While awareness of DTT broadcast has increased significantly, it has caused some consumer confusion with the varying standards and quality of DTT receiver boxes available in the market.” now TV launched a hybrid all-in-one STB that receives now TV’s SD and HD channels as well as DTT SD and HD channels. “The convenience that a single device provides is welcomed by consumers as it performs automatic software upgrades via the PCCW network,” he added. 2007 was also characterized by relatively slow growth in advertising expenditure across all media in Hong Kong, up just 6% from 2006 to HK$52billion (US$6.7billion). TV continued to top the ad revenue pie at HK$20.4billion ($2.6billion) or 39%, followed by newspapers and magazines at HK$18.6billion (US$2.4billion) or 35.6%, and HK$8.5billion (US$1.1billion) or 16.2% respectively. “Despite the considerably improved economy and consumer sentiment in Hong Kong in 2007, net advertising market only grew by six percent compared to 2006. Competition in newspapers and TV was extremely keen, with the introduction of additional free newspapers and pay-TV (channels), which may have impacted media buyers’ planning and advertising receipts for the respective mediums,” noted Helen Pemberton, director, Nielsen Media Research, The Nielsen Company, Hong Kong. Total ad revenue for terrestrial TV in 2007 rose just 2% from 2006 to reach HK$15.8billion (US$2billion), while pay-TV experienced a 3% decline to HK$4.5billion(US$577.7million). Based on data supplied by Mediaedge:cia Hong Kong TVB Jade was up by 3% from 2006 to HK$11.6billion (US$1.5billion) while TVB Pearl took a 14% plunge to hit HK$739.8million (US$95million) in ad revenue; ATV Home and ATV World hiked 4% and 9% from 2006 to take HK$3.3billion (US$423.6million) and HK$143.1million (US$18.4million) in ad spend respectively. According to CSM Media Research, TVB Jade continued its dominance in viewership although it suffered a slight slide in channel share from 60.2% in 2006 to 58.9%, while the nearest competitor ATV Home maintained 16.7% over the two years. Finally, as with 2006, all 10 of 2007’s top ten rated programmes were TVB Jade shows, with Heart of Greed taking top honours.