Following is the speech by the Financial Secretary, Mr John C Tsang, at the opening ceremony of Cable and Satellite Broadcasting Association of Asia (CASBAA) Convention 2007 this morning (October 31):

Marcel (Fenez), Distinguished Guests, Ladies and Gentlemen,

     Good morning.  

     It is my great pleasure to be invited again to take part in the CASBAA Convention today.  In 2003, 2004 and 2005, I spoke at this prestigious industry event in my previous capacity as the Secretary for Commerce, Industry and Technology.  Two postings later, I am back, and I am glad that CASBAA is also back, and has chosen to continue to hold this annual flagship event in Hong Kong, Asia's World City.

     I cannot agree more with this year's theme - "It's all about content!"  Like everyone else, I expect high quality content from our television shows and motion pictures.  Few would argue that the stunning emotional contents of shows, such as the TV series 24 or Ang Lee's Lust, Caution, is the major factor that attracts us to watch.  They are vivid demonstrations that "Content is, indeed, King".

     But with the advent of some of the latest technologies, we need to employ our creativity to the fullest extent in order to present these contents in the most suitable modality.  As a community that is constantly on the go, we are looking forward to moulding contents for presentation in the medium of mobile digital entertainment technology.  In fact, with our ultra-high mobile penetration rate at some 1.5 phones for every man, woman and child in Hong Kong and a well-developed film industry, Hong Kong is best placed to nurture the growth of this technology.

     Mobile TV will no doubt offer a fertile market for converging communication with entertainment.  We are consolidating views at this time from the industry and the public on mobile TV with a view to mapping out an implementation framework for further consultation by the end of the year.  Our aim is that Hong Kong should be the forerunner in adopting leading TV broadcasting technologies.  To facilitate the adoption of this technology, we will put in place a business-friendly regulatory framework accompanied by appropriate spectrum allocation arrangements.  

     Things are moving quickly in this area. Last year a local company launched Hong Kong's first 3G mobile TV service.  And earlier this month, Hong Kong held its first festival of films suitable for mobile phones.  Now that's a really creative challenge, finding films that are suitable for the very small screen.

Conducive Regulatory Environment

     Consistent with our business-friendly philosophy, we have always provided the industry with a regulatory environment that is conducive to innovation and investment.  You may all be familiar with our light-handed regulatory regime for the broadcasting industry, with no foreign investment limit, no restriction on business models, and no local content requirements on the provision of pay TV services.  And we certainly do not pre-censor broadcast contents.

     Our broadcasting policy addresses the importance of content production by adopting a technology-neutral regulatory regime. We are among the first jurisdictions in the world separating the licensing and regulatory frameworks for "carriage" and "provision" of TV services.  Broadcasters with no infrastructure may focus on content creation, and engage a separate carrier for transmission of their television programme services.  This horizontal, technology-neutral approach also allows the regulation of conveyance and contents to develop separately and at their own pace.

     We are committed to widening programme choice for the community, encouraging investment and innovation in the broadcasting industry, and promoting fair and effective competition in order to enhance Hong Kong as a regional broadcasting hub.  We have witnessed the world's first and largest commercial Internet Protocol TV (IPTV) deployment in Hong Kong.  There are now three IPTV operators with over 800 000 households subscribing to their services.

     We have also embraced the digital era and will start broadcasting terrestrial television digitally by the end of this year.  The Government is working closely with the two local terrestrial broadcasters, ATV and TVB, as well as TV equipment manufacturing and trading industry as well as the community to ensure a smooth transition from analogue to digital terrestrial television broadcasting (DTT).  Our citizens will soon experience the stunning picture and sound quality as well as new applications and features that DTT can make possible.

     We announced plans to switch to DTT back in 2004 and the local broadcasters have been ironing out ever since details and upgrading equipment to deal with the switch-over.  The success of the project depends on cooperation from all stakeholders. These include the consumers, broadcasters and electronics industry – as well as Government, of course.  If all goes to plan, we will switch off analogue broadcasting completely in 2012.

Intellectual Property Protection

     The emergence of new media platforms driven by advances in technology not only opens up new markets for the broadcasting industry, but also brings new challenges.  These include how contents disseminated through the new distribution platforms can be effectively protected against piracy.

     Apart from making sustained efforts in law enforcement and public education, we seek to keep our copyright law under regular review to ensure that it is completely up to date.  The enactment of the Copyright (Amendment) Ordinance 2007 in July this year is a clear testimony of our efforts.  Major amendments include new provisions to guard against circumvention of technological measures used to protect works from copyright infringement.

     The next item on our agenda is how best to enhance copyright protection in the digital environment.  The Government released a public consultation document on the subject last December.  We are now examining the views received, and we plan to release to the general public preliminary proposals early next year.

     We have learned from many years of experience that combating piracy requires a public-private partnership.  We appreciate very much the collaborative efforts of CASBAA and local pay television operators in taking civil action against commercial and domestic pirated viewing under the Broadcasting Ordinance and Copyright Ordinance.  Several recent high profile cases have served good public education purposes.  The pirates need to know that we are on their tails and we are serious about beating them hard.  To meet challenges on the intellectual property rights front, we look forward to working closely in the years ahead with CASBAA and other concerned stakeholders.

Business Facilitation

     Hong Kong is a regional centre for international trade in multi-media ideas, services and products.  While Hong Kong is not a big market itself for content production and distribution, the demand for quality contents and programming has increased significantly in the Mainland, which is the world’s largest, and fastest-growing market.

     Our broadcasting industry is one of many local sectors benefiting from Hong Kong's free trade pact with the Mainland known as the Closer Economic Partnership Arrangement, or CEPA.  It is designed to give local companies a head start in reaching out to the Mainland market.

     Under CEPA we have been able to seek greater and faster market access into the Mainland for Hong Kong-originated or Mainland-Hong Kong co-produced movies and TV dramas.

     One of the biggest breakthroughs connected to this free trade agreement is that TV dramas which are co-produced by Hong Kong and Mainland companies are now regarded in the same way as Mainland dramas.  This means they are allowed to be shown during prime time viewing hours, which was previously off limits to producers outside the Mainland.  CEPA has also made it a little easier for companies to get scripts approved for co-produced dramas.

     CEPA is an on-going commitment.  We will continue to enhance interaction between Hong Kong and Mainland authorities to expand the market for co-produced dramas.

Developing Creative Industries

     The Government attaches great importance to driving the development of creative industries in Hong Kong.  In his Policy Address delivered earlier this month, the Chief Executive highlighted the success of our film, television, music and advertising sectors, among the various creative industries.  CASBAA Members with operations in Hong Kong have no doubt contributed to these successes.

     Hong Kong has played a leading role – no pun intended – in the industry since the days of Bruce Lee in the late 1960s and early 1970s.  I am currently setting up a high-powered committee to formulate new strategies to ensure our creative industries move forward.

     One of our initiatives, something we call "Hong Kong on location", is intended to promote the city as a setting for films.  I believe we have the facilities, expertise and perfect backdrop for all kinds of movies.  In the last budget, the Government earmarked HK$300 million for a new fund to help finance film production and attract more talents from the Mainland and overseas to film in Hong Kong.

Conclusion

     Ladies and Gentleman, I am looking forward to hearing what you, the experts, have to say during this convention.  Your insights and experience will help us shape our strategies for the future.  

     For today, I wish you all a successful and rewarding conference and, for delegates coming from overseas, I would urge you to spend an extra day in Hong Kong after the Convention, not only to enjoy what we have on offer and contribute to our economy, but also to catch the location shoot of the new "Batman" movie.  Watch Central turn into Gotham.

     Thank you.

Ends/Wednesday, October 31, 2007
Issued at HKT 10:45

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