10.
Variety of services (other than television programming. e.g. sound, inter- active, HDTV)
Para. 5.8.3. of the Guidance Note requires bidders to provide details of any proposals to broadcast non-video signals (e.g. radio)
11.
10.1 In respect of services other than television programming, we noted that HKCC has proposed an interactive channel allowing viewers to input informa- tion, make choices or play games. Both bidders have proposed to use some of their channels for FM sound transmission; however, HKCC has provided little detail. HCV raises the possibility of re-transmitting ATV and TVB's broadcasts under "must-carry" rules with a Dolby Stereo sound track. (TVB does record some music and drama programmes in Dolby stereo for video export purposes). We were informed by the PMG that both bidders' proposals in non-television services were technically feasible.
10.2. In our view, both HKCC and HCV would be capable of providing inter- active services once their network is in place, if they identified a market for them.
10.3 We consider that Hong Kong consumers are more likely to appreciate HCV's proposals for enhanced sound-track broadcasting. We cannot gauge the popularity of HKCC's interactive channel.
Advertising time per channel.
Para. 5.8.3. of the Guidance Note requires bidders to provide details of the amount of advertising per clock hour. Para. 5.4 (c). also sets restrictions on advertising time at 5 minutes per clock hour and 5% of total broadcasting time (per channel). This section states that proposals for less advertising will be preferred.
11.1 We note that both bidders ultimately aim to broadcast advertisements up to the full limit set down in para. 5.4(c) the guidance note. However, we note that HKCC plans to reach that limit gradually over five years, while HCV claims to aim to reach the limit early on.
11.2
We have previously proposed a limit on advertising time half that allowed to ATV and TVB. We believe that this will be more acceptable to the Hong Kong public. But within that limit, we see no reason to inhibit the licensee from gaining the maximum available revenue from advertising. Enquiries with the advertising agency industry in Hong Kong have in any case shown that the future CTV licensee, even after his system has reached maturity, is unlikely to obtain more than 10% of any Hong Kong-wide advertising budget.
11.3 Our analysis of the situation is that neither HKCC or HCV is likely to gain an amount of advertising equivalent to HKCC's lower proposals over five years. From that point of view, therefore, both bidders' proposals should be regarded as equally satisfactory.
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