Hong Kong’s first pay-TV service, I -Cable, has been struggling in recent years as it failed to respond to market changes that are dominated by internet streaming, a professor specialising in media and television industry says.
Wharf (Holdings) will exit the unprofitable business of providing pay-television and broadband internet, as Hong Kong’s largest retail landlord focuses more on property.
Wharf could not find a buyer for its struggling i-Cable Communications unit, according to a statement. Funding to i-Cable, which reported a HK$313 million loss last year, will not be extended upon expiry, Wharf said.
“The possibility to see i-Cable turning around is low,” Wharf’s chairman Stephen Ng Tin-hoi said during a Thursday press conference. “We have tried very hard to talk with many investors, but no one intended to buy.”
“For now, we can’t answer whether i-Cable will close down. All decisions will be subject to the assessment by the future financial adviser,” said Ng, who also serves as i-Cable’s chairman and chief executive. “First, we will see if we can find other financial support. If not, we will see if the company’s business can continue.”
Failure to obtain fresh funding, however, could likely lead to its closure. The Office of the Communications Authority said i-Cable must fulfil its financial responsibilities before its pay-TV license matures on May 31.
The government renewed i-Cable’s pay-TV licence for 12 years to 2029 in December, which requires HK$3.4 billion in investments for the first six years.
Fantastic TV has also committed HK$660 million in content and capital investments in the first 18-42 months of its operations since obtaining its licence in May last year. It has been preparing to launch its free-to-air Cantonese channel in May this year.
Grace Leung Lai-kuen, a professor in media regulation and policies at Chinese University, told Young Post that the television industry in the city has changed rapidly. “I-Cable has been struggling as they missed the opportunities to extend its market. The application for launching the free-to-air Cantonese channel took a long time since 2009. They didn’t have many opportunities to reach other potential audience,” she says.
Another reason was Cable TV’s slow response to the changing TV industry, Leung says. “The video-streaming services, such as Leshi and Netflix, have launched their operations in the city. People can use various devices to watch TV anytime and anywhere. But i-Cable hasn’t used a platform, such as its fibre optic broadband network, to attract more subscribers. It’s hard to compete with other broadcasters or video-streaming services.”
Leung also says i-Cable was the first pay-TV service, but the subscribes had to buy a package of a set of TV channels. “Subscribing other pay-tv services like Now TV is more flexible and convenient because you only need to pay for what you want to watch. That’s why Cable TV has lost many subscribers.”
It’s not alone in facing the crunch. Asia Television, the world’s oldest Chinese-language broadcaster, went off the air in May last year, ending 59 years in operation.
Sports, Performing Arts, Culture and Publication sector lawmaker Ma Fung-kwok, who attended China’s annual “two sessions” in Beijing, said that the government needed to review its broadcasting policies amid the worsening market in the TV industry. “There are many limitations with the licence and broadcasting policies. It’s hard for the TV services to respond to the changing market if they are bound to the limitations,” he said.
The former Hong Kong Cable received its first 12-year license to operate pay-TV service in Hong Kong in June 1993. The service was renamed i-Cable in 1999 after launching its multimedia services business for dial-up internet access.
The service, with 2,176 employees on staff, is all that remains of Wharf’s communications, media and entertainment operation, Ng said. Wharf sold its Wharf T&T fixed-line telecommunications business to private equity firms MBK Partners and TPG Capital for HK$9.5 billion in cash last October.
The introduction of free-to-air television, such as the Cantonese Viu TV launched last March by PCCW’s HK Television Entertainment, has added to i-Cable’s financial woes.