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Media Practices - Journalism

            Hong Kong’s television industry has been dominated by domestic free television program licenses. Among Hong Kong’s free television service providers, Television Broadcasts Limited is considered to be the dominant player. For the longest time, TVB was considered as leading the monopoly in televisions industry, rivaled only by its sole competitor ATV. Recently, the government has taken action in order to open up the television industry to encourage competition. Because of this, more and more players are entering in different forms. However, it can be observed that TVB remains as the sole dominant player.

            Television Broadcasts Limited (TVB) and its subsidiaries is a leading terrestrial television broadcasting company in Hong Kong. TVB started broadcasting in Hong Kong in 1967. In 1984, TVB Company Limited became publicly listed (Television Broadcast Limited 2009). In 1978, the competition between TVB and ATV (then Redeiffusion Television (RTV) became more intense with the closure of Commercial Television. The two companies, ever since, became the top two leading broadcasting companies in Hong Kong, with TVB commanding a larger market share. TVB achieved a long-term monopoly, while ATV was constantly lagging behind (Cheuk, 2008).

            After the demise of CTVin 1978, a duopoly structure existed in the television industry for more than two decades. Nevertheless, RTV always lagged behind TVB in the rating race. Its ownership has changed several times and is now known as Asia Television (ATV). For the past quarter century, TVB’s Chinese channel, Jade, was the dominant player in the market. It has consistently enjoyed a 70 percent share of the Chinese speaking audience during prime time. More than 95 percent of Hong Kong’s population are Chinese. Because of its dominance, TVB has earned huge profits (Kitley, 2003).

            For more than two decades, TVB has gained a large percentage of the ratings, and the majority of the local audience habitually turned to TVB for news and entertainment. The television environment in Hong Kong started to be hostile in the 1990s. The introduction of satellite and cable television has made the environment more hostile for TVB. In contrast to the situation during the 1980s, when the majority of television viewers watched TVB Jade’s prime-time programs, Hong Kong viewers are now offered programs from the more competitive ATV as well as various new television broadcasters, including satellite television STAR, cable television Wharf Cable, new regional television services, and the video-on-demand (VOD) operators (Ma & Ma, 1999). One of the competition issues that is raising concerns about the dominance of TVB is its strict-contractual non-competition clauses with all its major star performers. By signing up potential talented artists at an early stage in their careers, it prevents them from performing on rival channeled. This has been a base for ATV and HK Cable TV to propose that a legal mechanism must be introduced in order to allow stars to perform from other providers, should they wish to do so (Williams, 2005).     

            Internally, Hong Kong television is essentially a commercial system that has two private free-to-air terrestrial stations (TVB and ATV). Chinese channels of TVB and ATV are watched by an overwhelming majority of the population. The free-to-air broadcasters have relied on in-house production for their Chinese programming. The licensing conditions require that they invest to make sure that they have enough studios and that they are well-equipped. Each station keeps its array of artists on regular as well as contractual bases. They run schemes to train artists and production personnel (Sinclair et al., 1996).

Television as an Institution

            Much work of a sociological or political economy bent has focused on television not primarily in terms of texts and viewers but as a set of institutions. Analyses of media institutions look at television as a set of social organizations with recognizable practices, rules, values and structures. Many approaches to the study of institutions stress that they are shaped by a range of economic, political and cultural determinants. These relate respectively to the production and distribution of media 'goods', the exercise and regulation of power in media contexts, and the production and circulation of cultural meanings. In terms of economic factors, most television institutions are capitalist, organized along commercial lines. Television programs are commodities, produced and distributed industrially with profitability as an operational imperative. This has meant that television companies have tended to tread a conservative path. They seek to replicate previous successes, opt for programs which are cheap and popular, and show repeats of anything vaguely durable. Some analysts have argued that television is therefore an uneasy blend of what media institutions would ideally like to supply and what audiences demand.


            Monopoly is a situation where there is only one producer of a product, and, hence, the single producer faces no competition from other producers. A monopolist will have power to set not just output but also the price of the product. Most firms would like to be monopolists, since any profits being made would not be threatened by other suppliers taking market share. Indeed, most of us as individuals would like to have valuable skills that no one else has so that we could charge a very high price for our services.

Television in Hong Kong was virtually a one-station market. TVB’s Chinese channel, Jade achieved an average daily viewership of 93 percent in 1988; its share of average quarter-hourly viewership in weekday prime time was 92 percent in the same year. The other Chinese channel, ATV Home, was watched by only 8 out of 100 viewers in weekday prime time in 1988. Nowhere in the world there is competitive, commercial television is another cosmopolitan city as dominated by a single channel as Hong Kong. TVB Jade first established hegemony when it aggressively took the lead in the mid-1970s in developing program genres related to local lifestyle, in particular entertainment such as the drama serial and the glamorous spectaculars. TVB’s success rendered its competitors commercially unviable, One of them, Commercial Television (CTV) closed down in 1978. The other competitor, Rediffusion Television (RTV), after launching one last challenge in the early 1980s under Australian management, was sold in 1983 to a local family headed Deacon Chiu. The station was renamed ATV and was operated on a policy of minimum expenditure of around $80 – 90 million a year when TVB’s annual budget was between $350-400 million. Thus ATV under Deacon Chiu was able to produce and screen mainly second or third rate imitations of TVB productions, posing only occasional, and usually nonexistent competition to TVB (Tsim, 1989).

TVB was able to achieve dominance in the Hong Kong television market because:

·         It was the first TV station to be awarded a terrestrial free-to-air license,

·         Competition in the market has been restricted because of limited spectrum enabling TVB to achieve an unusually high market share, and

·         Using its market share and the power of the television medium, TVB has achieved a market position that others and unable to challenge. 

Television Policy Renewal

            The form and content of a country's media system will be significantly affected by the policy framework established by government agencies. Despite the centrality of the media's role in modern democracies-and its importance in our everyday lives-media or communications policy is rarely the subject of public discussion or debate. Government policy towards media and mass communications generally encompasses two forms of intervention: regulation and funding. These can be used to shape a media system in order to promote ideals or objectives. We can, in broad terms, identify three types of media systems established by specific patterns of regulation and funding. The first category is the commercial system. This involves government ceding publishing or the public airwaves to commercial interests. The costs of media production in a commercial system are covered either by direct payment for a service (such as a pay-per-view cable channel) or, more commonly, by advertising revenue. While media paid for by advertising are often regarded as 'free', the consumer usually pays for them indirectly, since the cost of advertising products will be passed on to them. Proponents of a commercial system argue that the free market will provide the best media products, and that a minimal level of government involvement will help protect this freedom. One area of disagreement among proponents concerns monopoly legislation: some argue that government intervention of any kind is counter-productive, while others see a need for government to pass anti-monopoly legislation to prevent a drift towards a concentration of ownership in order to keep the market 'free'. Second, there is public service broadcasting. Public service systems usually involve a publicly funded television/radio network existing alongside a regulated commercial system. The philosophy behind public service broadcasting maintains that the radio and television airwaves are public property and should therefore be used in the public interest. Proponents argue that the broadcast media have enormous cultural and educational significance, and that, as a consequence, they should be shaped by cultural or educational goals-such as a guarantee of diverse, informative or enlightening programming-rather than by the desire to maximize profit. Public broadcasting networks in this system are funded either directly by government or through quasi-independent public corporations, which raises revenue through a tax on television sets. In either case, the goal is to restrict direct government interference in public broadcasting and to maintain the integrity and independence of the public sector. Commercial broadcasting in this system is mandated and regulated by a governmental framework designed to limit interference from media owners or commercial interests. The airwaves are leased to private companies who will be asked to fulfill certain criteria. This may involve, for example, a commitment to informative programming or educational programs for children, a guarantee of fairness in the coverage of political and social issues, restrictions on the amount of advertising, or quotas on the amount of (usually cheap) foreign programming that may be shown.

            The injection of public money into a system can enable the development of a number of policy goals. In its ideal form, the use of public subsidy allows broadcast media to fulfill public service goals without being concerned about the needs of sponsors or advertisers. This can be used to provide producers with freedoms that tend to be unavailable within a commercial system, such as:


• The chance to innovate, developing program ideas that may be too risky in a commercial climate (where audiences must be guaranteed fairly quickly).



• The ability to make programs for minority audiences-particularly those minorities without the disposable income to interest advertisers.



• The opportunity to promote educational rather than commercial value. So, for example, the most profitable form of children's programming in a commercial system involves content designed by toy manufacturers.

• The ability to provide information regardless of the interests of corporate owners or advertisers. In a commercial system, corporate pressures can come from the owners or the parent company or from significant advertisers like the car industry



• The freedom to make or broadcast programming without commercial interruption.


            In 1998, the government embarked on a process of renewing Hong Kong’s television policy. In 2000, actions were taken in order to open up Hong Kong’s television market. The Hong Kong Government enacted the Broadcasting Ordinance in 2000, the Government has introduced a technology-neutral regulatory regime for television broadcasting services. Under the new regulatory regime, the provision and carriage of television program services are separately licensed and regulated under Broadcasting Ordinance (Cap. 562) and the Telecommunications Ordinance (Cap. 106_ respectively. A television program licensee may choose to hire transmission service of any licensed carrier to deliver its television service by any feasible technology instead of establishing and maintaining transmission infrastructure itself. This has lowered the entry barrier for television services. The regularity regime also reflects the Government’s policy objectives of fostering fair and effective competition in the market and promoting plurality and diversity of TV program services. Moreover, the Government encourages competition in TV markets. There is no pre-set ceiling on the number of licenses to be issued subject to physical or other constraints. Interested parties may submit applications for television program service licenses any time. At present, over 230 domestic and regional television channels provided by television services licensees in Hong Kong are available for reception by Hong Kong viewers.

            Under the Broadcasting Ordinance (BO) there are four categories of television program services, namely domestic free, domestic pay, non-domestic and other licensable television program services, which are regulated according to their nature and pervasiveness rather than their transmission mode. TVB and ATV are categorized as domestic free television program providers. Each operates one Cantonese channel and one English channel. The two companies are required to broadcast news, documentary, current affairs, arts, and culture programs and programs for children, young persons and senior citizens, as well as programs provided by Radio Television Hong Kong (RTHK).

It has been argued that TVB’s market position has been achieved because it was a beneficiary of a privileged licensing arrangement. The introduction of completion in the deregulated marketplace can only be achieved effectively if the market power of TVB is controlled. Spectrum limitations are believed to have caused and continues to cause structural problems in Hong Kong television market. It is argued that the lack of spectrum availability will continue to cause distortion in the market and will continue to benefit TVB. It is argued that TVB will continue to benefit from its privileged use of UHF spectrum. Even in the future when analogue transmission are phased out and it becomes possible to award additional domestic free licenses, it will be necessary to control TVB’s activities until the marketplace is re-balanced and other players are able to compete on equal terms with them. The granting of any other license to the TVB Group is believed to cause the ability of its rivals to compete in the marketplace to weaken. This will lead to the stifling of innovations and lack of investments.

            An underlying principle of Government policy has been “one license per operator”. This policy has ensured a plurality of voice whilst maximizing competition in a very limited market. It also minimized any conflict of interest and avoided editorial uniformity.



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