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The following is a question by the Hon Tam Yiu-chung and a reply by the Secretary for Commerce and Economic Development, Mrs Rita Lau, in the Legislative Council today (December 8):
Question:
In recent years, the local broadcasting rights of a number of large scale major international and regional sports competitions, such as the Guangzhou Asian Games, the South Africa World Cup and the London Olympic Games to be held in 2012, were awarded exclusively to a local pay television broadcaster, making it difficult for the general public to watch various sports events. Moreover, there were disputes between the pay television broadcaster which was awarded the exclusive broadcasting right of the South Africa World Cup and the two major free television broadcasters in Hong Kong over the broadcasting arrangements for four core matches (including the opening match, the matches between the final four and the final match) of the World Cup as laid down by the Federation Internationale de Football Association. In this connection, will the Government inform this Council:
(a) whether it knows the existing differences in broadcasting coverage and number of viewers, etc. between the two major free television broadcasters in Hong Kong and the aforesaid pay television broadcaster which was awarded the exclusive broadcasting rights of the World Cup, the Olympic Games and the Asian Games, and how many members of the public were/will be unable to watch the aforesaid international sports events as indicated by such difference;
(b) whether the Hong Kong SAR Government has examined the feasibility and the costs involved in bidding for the broadcasting rights of international sports events (such as the World Cup, the Olympic Games and the Asian Games, etc.) and distributing the television broadcasting rights of such events in a fair manner among the media organisations such as the free and pay television broadcasters, Internet service providers and radio stations, etc. in Hong Kong; if so, of the details; if not, the reasons for that; and
(c) given that the Chief Executive had, in his response to a question raised by a Member of this Council at the Question and Answer Session in July this year, indicated that the SAR Government would consider how to enable all the people in Hong Kong to watch the final or semi-final matches of the World Cup free of charge in the future, of the outcome of its consideration and whether the SAR Government will bid for the broadcasting rights of the aforesaid international sports events; if it will not, what measures the SAR Government will take to ensure that the majority of the general public in Hong Kong will be able to watch international sports events such as the World Cup, the Olympic Games and the Asian Games, etc.?
Reply:
President,
Generally speaking, organisers of international and regional large-scale sports events would, in accordance with their policies and regulations, award the screening or broadcasting rights concerned via a bidding system to bidders offering the highest price, which are qualified media corporations or their affiliated companies. The deals would be confirmed by contracts signed between the two parties. The contracts are commercial agreements, the content of which could only be made public with mutual consent.
I will now address the three specific questions raised as follows:
(a) There are two free television broadcasters in Hong Kong, namely, the Television Broadcasts Limited (TVB) and the Asia Television Limited (ATV). Their analogue television networks cover nearly all households in Hong Kong. Following the introduction of digital terrestrial television (DTT) by the Government since end 2007, the DTT network coverage of TVB and ATV has reached 85%. Over 1.4 million households, or 61% of all local households, have installed television sets, set-top boxes or computers capable of receiving DTT services. The exclusive broadcasting rights of the 2010 World Cup, 2010 Asian Games and 2012 Olympic Games were acquired by an affiliated company of the Hong Kong Cable Television Limited (Cable TV). Currently, Cable TV, a pay television broadcaster, has about one million subscribers.
Apart from watching television at home, the public can watch sports events through different means and in different places such as shopping malls, pubs and restaurants. It is difficult for us to assess how many members of the public have watched or have not been able to watch these events.
(b) Whether to bid for the broadcasting rights of international sports events is a commercial decision. In general, governments would not directly participate in such activities or intervene, and Hong Kong is no exception. The price for securing broadcasting rights of sports events is determined by market forces, and the amount depends mainly on the popularity of the event, the nature of the event as well as the policy of the organiser. The broadcasting rights of world-renowned and spectacular sports events such as the World Cup or Olympic Games often involve fees well over hundreds of millions. If the Government were to bid for such rights, the propriety on such use of public funds would be called into question; there would be other adverse effects. As a free market economy, Hong Kong prides itself as one of the most liberal broadcasting markets in the region. Government involvement in bidding for the broadcasting rights of sports events will be regarded as market intervention. Not only will this affect normal market operation, but the Government will also be considered to be competing with the commercial sector. This would undermine Hong Kong's reputation and status as a broadcasting hub in the Asia Pacific region.
(c) Large-scale sports events are held around the world each year. The broadcasting arrangements of such events are made by the organisers having regard to the nature of the events and the organisers' operational needs. It is therefore difficult to tell which broadcaster will acquire the broadcasting rights of such events, whether the rights will be exclusive, and whether a fee will be charged. Since the bidding of broadcasting rights of these events involves commercial decisions, it is appropriate to allow room for the broadcasting arrangements to be decided through commercial negotiations. Companies bidding for the broadcasting rights will certainly put viewers and customers high on the agenda with a view to winning their support. In addition, market forces will drive commercial organisations to explore business opportunities, including arrangement for showing the events in shopping malls, pubs and restaurants through different channels. This will help create business opportunities and foster a more ardent sporting atmosphere.
When the organisers of large-scale sports events such as the World Cup and Olympic Games authorise broadcasting rights, they would normally require the successful bidders to ensure that the majority of local people will be able to watch the events. Past experience shows that when a Hong Kong pay television broadcaster was awarded the exclusive broadcasting right, it would reach a commercial agreement with the Hong Kong free television broadcasters before the event to enable the general public to watch the core matches on the free television platform. The Government encourages and respects the commercial agreements reached by parties concerned. Where necessary, the Government will assist and appeal to the broadcasters concerned so that they would negotiate an agreement which is in the best interest of the viewing public and will let them have more programme choices.
Ends/Wednesday, December 8, 2010
Issued at HKT 15:56
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