There are no broadcasters in Europe who have ever produced or assembled this volume of material for quite so many channels. The cable systems in Europe assemble their package of channels from a number of separate sources. In exceptional cases one production company may provide 2 or 3 channels. Some of the media magnates such as Maxwell and Berlusconi are rationalizing the industry by buying up the new media channels. However it would still remain a challenge for even Berlusconi to fill 10 channels satisfactorily in one country. Astra the European medium powered direct broadcast by satellite venture is facing a similar challenge in having to fill 16 channels. To date it has been unable to lease out all 16 channels and even those that are "on hold" are being reserved by different programme companies.
Cable television throughout the world is essentially a scheduling activity and not a production business.
Cable television will be delivering more than twice as much material as the existing two broadcasters TVB and ATV, who currently deliver 26,000 hours annually over four channels (Exhibit 3.2.) It has taken TVB twenty years to evolve into the substantial organization that it is today with a turnover of HK$713 million, 2,000 staff and an output of self-originated local productions of 4,600 hours p.a. ATV is producing 3,800 hours p.a. of local output with only a 20% audience share.
3.2.6 Programming costs
Comparing the per hour costs of locally produced programmes is difficult because those costs depend on both the nature of the programme and on its production format. However by examining the total revenue available to TVB and to cable television one can make certain judgements with respect to overall resources, some of which can be made available for programming. Exhibit 3.3 indicates that:
TVB's 1987 revenues/hour of programming
Cable Operator's Year 10 revenues/hour of programming (BAH estimate in 1987 constant prices)
*
= HK$52,000
HK$25,500
By the tenth year BAH estimates that the cable operator will have at its disposal approximately half the revenues for programming per hour that TVB has today. In terms of comparative resources available for programming and acquisition the figure will be even lower as terrestrial broadcasting is a cheaper means of delivery than underground cable.
One study on the development of television in Hong Kong shows that gaining significant audience support relies on having locally made innovative and good quality productions. Programming costs are considerably lower in Hong Kong than they are in Europe. Whereas as a quality drama production in Europe could easily cost over HK$1.5 million/hour in Hong Kong a premium drama might cost only HK$120,000/hour. BAH estimates that with HK$120 million rising to HK$356 million p.a., from year 1 to year 10, for programme production the cable company should be able to make a reasonable impact on audiences provided they do not attempt to produce too much new in-house local material in the early years. BAH believes that the cable company
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