 |
|
|
|
Web-only Exclusives November 30, 2000 From Our Correspondent: Hirohito and the War A conversation with biographer Herbert Bix From Our Correspondent: A Rough Road Ahead Bad news for the Philippines - and some others From Our Correspondent: Making Enemies Indonesia needs friends. So why is it picking fights? |
NOVEMBER 26, 1999 VOL. 25 NO. 47
 Illustration by Emilio Rivera III |
|
Content is the dowry in a Hong Kong TV deal
By JIM ERICKSON
The shotgun wedding between television and Internet technology is commonly referred to as "digital convergence." So far the phenomenon is better understood as a coming together, as in a train wreck. In theory, interactive television (also known in various forms as video-on-demand and old-fashioned pay TV) seems like a winner. Use high-bandwidth telephone, cable-TV or satellite networks to allow viewers to choose what TV programs and movies they wish to view, and what kind of services, such as online banking and shopping, they consume. In practice, however, no one has figured out how to put together a product with mass appeal.
No one is more painfully aware of that failing than Hong Kong's dominant telephone company, Cable & Wireless HKT. The British-owned property has spent more than $2 billion grafting a point-and-click interactive TV system onto the local phone network, becoming one of the first in the world to offer interactive services via the tube on a commercial basis. But HKT's iTV video-on-demand system has suffered the ills of a star-crossed start-up: technical glitches, key executive turnover, missed launch deadlines, muffed marketing. Despite being able to reach 80% of Hong Kong's 6.8 million people, iTV has just 89,000 subscribers (compared with more than 420,000 for Wharf's Hong Kong Cable TV). A monstrous $357-million loss recently reported for the six months ended Sept. 30 by the parent company was due largely to write-downs and write-offs for Internet and interactive services development. The iTV service "has been an economic and marketing failure," says Simon Twiston Davies, CEO of Kagan Asia Media, publishers of Asia Cable & Satellite World magazine. "The perception is the technology doesn't work and there isn't a great deal of content there."
ALSO IN ASIAWEEK
| |
|
The venture gives iTV fare that may be as big a draw as its blue movies (analysts aver pornography is currently iTV's only lucrative content). Star TV is part of News Corp., Murdoch's global media empire, and holds rights to popular programming such as Star Sports and the Mandarin-language Phoenix channel. HKT "needs Star TV because they understand television," says Twiston Davies. "They can create a service with content strength and packaging sophistication" to challenge local terrestrial broadcasting networks TVB and ATV, he says.
At a press conference that featured Murdoch and HKT chief executive Linus Cheung Wing-lam, officials said the venture must capture half of the Hong Kong TV market to turn a profit. Yet the government is opening up Hong Kong to new competitors - 10 media companies have applied for pay TV licenses, which are expected to be awarded in January. The spoiler appears to be Wharf, which is spinning off a broadband Internet and interactive TV system called i-Cable, set for an initial Nasdaq/Hong Kong stock offering this month. Other applicants include TVB, which has a formidable line-up of Cantonese programming, and Turner International (a sister company of Asiaweek).
The prospect of numerous players fighting for a share of a profitless market may appear eerily like the state of affairs on the Internet itself. Indeed, advancing Internet technologies, such as wireless terrestrial networks, promise to provide new avenues for reaching audiences. It's far from clear how multimedia content - whether music, movies, or more experimental fare - delivered via the Net will impact struggling interactive TV ventures. HKT itself partnered with Microsoft to provide a multimedia portal called izene, yet no one is sure if it will be competing with other iTV subscription services. For that matter, no one knows whether customers will prefer to get e-commerce services through televisions or computers. Pricing? "There are no down-and-dirty formulas for how much [interactive programming] is supposed to cost," says Lane Leskela, Gartner Group senior analyst for electronic business.
The uncertainty guarantees there will be more partnerships as media players attempt to share risks and costs while assembling credible content packages."We have yet to see these technologies come together with compelling content and functions," Leskela warns. Interactive TV "will require testing in the marketplace for a number of years to come." If your idea of quality entertainment is train wrecks, sit back and enjoy the show.
 |
Quick Scroll: More stories and related stories
ASIAWEEK Newsmap: Get the week's leading news stories, by region, from Newsmap
