Changing channels

Hong Kong rights to go to LeTV?

Hong Kong’s free-to-air TV operator TVB is sometimes known locally as “CCTVB”. This is partly a mocking reference to China’s state broadcaster CCTV (as TVB – which stands for Television Broadcasts Limited – enjoys a similarly dominant position in its tiny broadcasting kingdom). But it also reflects a view that TVB takes a pro-Beijing line on many political issues.

Hongkongers may soon have an alternative viewing option if rumours are true that LeTV (or Leshi) will enter the local market. WiC readers will be familiar with the media firm as LeTV has been making a splash with its ambitious plans to produce Hollywood blockbusters, make smartphones and build electric cars (see WiC268). Now LeTV’s 42 year-old founder Jia Yueting has his eye on Hong Kong too, with a strategy that seems to be based on sport. According to reports in local newspapers, the online video-streaming firm looks to have won exclusive rights to broadcast English Premier League soccer matches in Hong Kong for three seasons starting next year.

Adding credence to the speculation, LeTV put up a picture of a lion’s head (the logo of the English Premier League is a lion) on its weibo account with the caption “Big News on September 22. See you in Hong Kong”.

Then its marketing team had a bit of fun on the company’s Facebook page, posting a message with the hashtag: “I want resolution that’s high enough to count Rooney’s hair”

Now TV, controlled by Richard Li, the son of Asia’s richest man Li Ka-shing, won the current Premiership deal for Hong Kong for a fee said to be close to $200 million. But the speculation is that LeTV is prepared to pay at least double that to secure the rights. Reuters has reported that LeTV has bid between $400 million to $600 million.

This investment could be dwarfed by the plans of another mainland tycoon, Si Rongbin, who last week agreed to take a controlling stake in Asia Television (ATV), the terrestrial TV competitor of TVB in Hong Kong. The Shandong-based businessman, who is little known in Hong Kong, has promised to spend HK$10 billion ($1.28 billion) to revive the debt-ridden broadcaster. (The takeover needs to be approved by the Hong Kong government.)

ATV has been in this position before. Wong Ching, another low-key tycoon from the mainland, acquired it in 2010 and promised to create “Asia’s CNN”. But the channel has fallen further behind TVB in market share and financial constraints have reduced it to showing 1980s beauty contests during prime time.

Hongkongers view the shifting landscape with mixed feelings. LeTV’s ambitions may be more about expanding into other regions outside mainland China. But another concern about the bids, according to the Ming Pao newspaper, is that an influx of “pro-Beijing red capitalists” may want to help the Chinese government exert more influence over the former British colony. “How much ‘Hongkongness’ can be retained if our producers aim to make shows for an audience beyond the city?” concurs the South China Morning Post.

On the other hand, couch potatoes may like having more choices (the only show in town is TVB unless they subscribe to pay-channels). “Regardless of how the TV revolution pans out, the big winners will be consumers, who can enjoy high-quality home entertainment after slaving away all day to pay the bills and exorbitant rent. And that can’t be bad a thing,” the SCMP added.

On the subject of greater choice: LeTV and a resuscitated ATV wouldn’t be the only newcomers to the city’s television industry. Internet-based streaming service Netflix also has Hong Kong in its sights. The American firm said this month that it plans to launch in the city in early 2016, as part of a move to expand its global coverage.

© ChinTell Ltd. All rights reserved.

Sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.