Cabling a not so fantastic message

Editorial | Mary Ma Mar 17, 2017
It's regrettable to hear Cable TV may have to go off air very soon, after its parent company decided against continuing to finance i-Cable that operates the pay TV service.

Cable TV's 24-hour news channel is the most popular of similar channels in town, although other i-Cable services like broadband and telephone are just so- so at best.

The decision by its parent, Wharf, conforms with business sense despite the shocks.

In the past decade, i-Cable's one and only profitable year was 2007. Since then, it's been bleeding red ink to the tune of HK$1.6 billion in total. It isn't a viable business model, and to keep it alive will surly require a strong will from the major shareholder Wheelock - that holds a controlling 58 percent interest in Wharf.

If tycoon Peter Woo Kwong-ching took pride in Cable TV when he was Wheelock chairman, his son Douglas Woo Chun-kuen doesn't necessarily share his view. Business is business, and a company should at least stand on its own feet - even if not contributing profits to the group.

Since the father handed down his business kingdom to the son, greater attention has been paid to new property development. Stewart Leung Chi-kin, a veteran in the property sector, was recruited to head Wheelock's property arm, after his retirement from New World Development.

Wheelock paid HK$6.39 billion to secure a Kwun Tong site in November, and plans to invest HK$10 billion in total there. Prior to that, the last time Wheelock snapped up a government lot was back in 2014, when it paid HK$2.5 billion for a Kai Tak plot.

There's no doubt junior tycoon Woo is strengthening his emphasis on real estate.

Nevertheless, the fate of the group's TV operation isn't necessarily sealed, in view of developments in the past few days.

In addition to Cable TV, i-Cable is also licensed to open a free-TV station - Fantastic TV. The grand press event that Fantastic held recently to announce its launch in May was a conflicting signal, after its demise had also been expected.

What's occurred so far may not be simply switching off life support. Could it be an attempt by Douglas Woo to get better terms from the government, in order to create a new plan that's more financially viable, even if not profit making?

According to the pay-TV license renewal conditions, i-Cable would have to invest HK$3.45 billion in Cable TV over the next 12 years. Meanwhile, it would also have to invest HK$1.18 billion in the new Fantastic TV in the first six years after launch. That's a heavy financial burden.

If the business mode already made obsolete by the rise of social media isn't changed, it would be a black hole for the group.

It makes sense for i-Cable to concentrate resources on one rather than two TV stations, and it will clearly cost less to launch the free-to-air Fantastic TV rather than maintaining the pay-TV service Cable TV.

But this could involve amendments to license terms.

The question is whether the government is willing to lend a sympathetic ear.

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April 2018