HKTV gets second shot at broadcast license

ITEM: Online streaming video service provider HKTV won a court case that could finally clear the way for it to receive its long-sought-after free-to-air broadcast license.

On Friday, Hong Kong’s High Court ruled that the Executive Council’s decision to deny HKTV a broadcast license in late 2013 was unlawful. Exco justified the controversial decision by claiming the market could only sustain two new licensees along with existing licensees TVB and ATV.

HKTV had argued the decision violated a 1998 competition policy adopted by the Hong Kong government, which said there should be no limit on the number of broadcast licenses granted.

Justice Thomas Au Hing-cheung agreed, noting that the decision to select only two out of three applicants raised questions of whether Exco really made its decision based on the individual qualifications of each applicant, according to the South China Morning Post [subscription required]:

"I agree that HKTV had a legitimate expectation that its licence would not be rejected on the basis that there would be a pre-fixed number of licences to be granted," he wrote.

"If either there was a change of policy or that the Chief Executive in Council had not followed the policy in making the decision, he must give an explanation as to why that was the case. This has not been done. Whichever is the case, it has rendered the decision unlawful in that respect."

Needless to say, HKTV chairman Ricky Wong is pleased [PDF].

While the ruling doesn’t automatically give HKTV a license, it does give HKTV another chance to acquire one. But there are still some procedural hurdles to get through. The govt is now seeking legal advice on what to do next (which could include an appeal), and Secretary for Commerce and Economic Development Greg So has said that “market sustainability and the overall interest of Hongkongers” were still factors that would have to be taken into consideration.

That said, another factor Exco will have to consider is the fact that ATV – whom they deemed fit to renew its license at the time – just had its license revoked. If they feel that Hong Kong can only sustain four free-to-air licenses instead of five, it’s going to be very difficult for them to reject HKTV’s application again – especially in light of the public uproar that resulted the first time.

Here’s something else to consider: according to SCMP, TVB’s ratings are slumping, as are its profits. That’s not entirely due to HKTV, but it says something when your only free-to-air competition is a flailing TV station, and you’re still losing close to a million viewers. It’s hard to believe HKTV’s online strategy and content quality aren’t factors here.

TVB is reportedly leveraging its mainland Chinese ties to rejuvenate its programming. With new investors coming in, Hong Kong’s TV content market is in for a major shake-up. It only makes sense for HKTV to be part of that beyond its role as an online streaming service. If Exco decides yet again that HKTV doesn’t merit a license, it will have to provide some clear reasons for doing so. And they had better be good.