4. Introduction
• i-Cable Communication Limited ---1999
• integrated communications companies
•Residential fixed-line
•PayTV service (Free TV in the coming year)
•Dial-up internet access service
•Broadband internet access service
•Multimedia contents
6. • Hong Kong Cable Television (HKCTV)---1993
• Owned and operated by i-Cable Communication
Limited
• More than 100 channels and programmes over
30,000 fresh programming a year, including
10,000 hours of its own production
HKCTV
7. • News
– Self produced professional news
– Introduced in-depth reports, sharing unique perspective of the most
topical news & current affairs on the mainland China.
• Sports
– Exclusive
– Diversity
– Official broadcaster of the 17th Asian Games Incheon 2014
• Entertainment
– FAN Entertainment Channel奇妙娛樂台
– CABLE Drama Channel奇寶劇集台
HKCTV---Programming
8. • Viewing Share Among Pay TV Operators
50%
27%
15%
7%
0%
10%
20%
30%
40%
50%
60%
HKCTV NOWTV TVBNV bbTVSource: Nielsen HKTAM
Pay TV viewers aged 4+
Jan – Jun 2013, All Day All Time
* Excluded 8 TVBNV channels via Now TV platform
^ Included 8 TVBNV channels via Now TV platform
HKCTV---Viewership
9. • CABLE HomeLine Service offers users unconventional
fixed line telephone service, which allows customers to
enjoy great convenience by providing value-added-services
• iFAX
• MobileLine
i-Cable Homeline (Fixed Line)
10. • Hong Kong's 2nd largest Broadband Internet access
service provider
• Cover over 90% of the 2-million households in Hong
Kong.
i-Cable Broadband
11. • All media rights with extensive live & archived coverage in
multiple formats across media platforms
• Pay TV content based
• Portals on news, sports, horse racing, stocks, etc.
• Mobile Apps
Multimedia
13. • Integrated communication company
• Pacific Century Cyberworks Limited (PCCW)
• Hong Kong Broadband Network Limited (HKBN)
• Other PayTV supplier
• Television Broadcasts Limited Network Vision (TVBNV)
• Other fixed line & broadband suppliers
• Hutchison Global Communication Limited (HGC)
• New World Telecom (NWT)
14. PCCW
• Formed in 2000, PCCW is the first
quadruple-play provider in Hong Kong and
offers a range of innovative media content and
services across four delivery platforms –
fixed-line, broadband Internet access, TV
and mobile.
Player--- PCCW
15. • Now TV
• Launched in September 2003
• Currently NOWTV is the largest pay-
TV station in Hong Kong.
• Offers more than
190channels,including 19 channels from
TVB pay version. Now TV is not only
Hong Kong but also worldwide pioneer in
IPTV.
• a la carte pricing : allow subscribers to
take on just those channels that they are
really interested in.
PCCW---NOWTV
16. • PCCW's fixed-line service
– eye Multimedia Service and PCCW eye2
– Hong Kong Telecommunications (HKT) Limited.
• NETVIGATOR is Hong Kong's premier broadband provider, reaching
97% of all households in Hong Kong and serving broadband users
with a wide choice of Internet access speeds.
• Multimedia Platform:
– Now.com.hk--- 5,000+ streaming video contents
– --- Hong Kong's largest multi-platform digital music service
PCCW---Fixed Line, Broadband & Multimedia
21. Plan Package Service Price(Monthly)
Family Select
Basic Pack 74 channels $319HKD
News+Entertaionment
Pack 47channels $158HKD
Entertainment +Movies
Pack 47 channels $158HKD
Subscription---HKCTV
22. Package Service Price (Monthly)
CABLE TV Basic Pack+
50M Broadband
75 channels+50M $419HKD
CABLE TV Basic Pack +
HomeLine Service
75channels+homeline
service
$379HKD
CABLE TV Basic Pack +
130M Broadband +
HomeLine Service
75channels+130M+
homeline service
$509 HKD
Subscription---Bundling
28. • i-CABLE owns and operates one of
two near universal coverage two-way
interactive telecommunications
networks in HK.
• It delivers domestic pay television
programs, Internet and VolP services
mainly by hybrid fiber-coax (HFC)
network, supplemented by MMDS and
satellite transmission.
Source:Broadcasting Authority Annual Report 2010-2012
29. HFC (Hybrid Fiber-
Coax )
• HFC architecture is an optimized combination of fiber in
the trunk and coaxial cable in the feeder and drop.
encrypted
decrypted
30. • Retained to serve a small number of subscribers in remote areas of the
territory.
• MMDS (Multi-channel Multipoint
• Distribution Service):
Low frequency;
Less susceptible to interference.
Microwave trunk transmission system
Held, G.(2001)
Satellite:
Transmits broadcast signals from
satellites orbiting the Earth;
Receive radio signals using satellite
dishes.
36. Conditional Access System (CAS):
Set-top box and smart card
Digital rights management (DRM):
Multi-terminal devices
Content keys or embedded watermarks
37.
38. Over-the-top
1.delivery of voice, video and data service straight
from the provider to the viewer via public Internet,
without going through the MSOs or telecoms.
2. Consumers can access OTT content any time,
any place to any terminal devices.
3. pay TV operators to partner with OTT providers
or run OTT service itself.
39. 1、generate new ad revenue
from its well-regarded
content production
2、attract more customers to
subscribe to its pay-TV service
need to produce massappeal
programme to compete with
TVB ,such as soap drama,
too expensive to produce
too long to build critical
audience
Free TV-Is it a good thing?
43. Service
HKCTV NOW TV TVB Network
Vision
bbTV
Channels 112
(HD 12)
216
(HD 30)
74
(HD 18)
94
Pricing
Model
Pay-per-package à la carte
pricing
Basic package
Pay-per-channel
(for premium
channels)
Movie channel
package
Pay-per-channel
Source:A List of Licensed Broadcasting Services in Hong Kong (As at 15 November
2013). Office of the Communication Authority
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44. Content
HKCTV NOW TV TVB Network
Vision
bbTV
Channels 112 216 74 94
Self-
produced
channels
21 32 17 3 (preview
channel and
program guide)
Rate of Self-
produced
channels
18.8% 14.8% 23.0% 3.2%
Source: Official websites of NOW TV, i-Cable ,TVB Network Vision & bbTV
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45. Penetration
HKCTV NOW TV TVB Network
Vision
bbTV
Subscribers
in
2012
(Households)
1,089,000 1,183,000 Nearly 170,000 195,000
Subsribers in
2011
(Households)
1,106,000 1,140,000 Nearly 200,000 181,000
changes -17,000 +43,000 -30,000 + 14,000
Source: Annual Report (2012) of i-Cable, PCCW, HKBN ; Annual Report (2011) of TVB, PCCW, i-Cable
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46. Exclusive rights of sports channels
HKCTV NOW TV TVB Network Vision bbTV
Football 欧冠 歐霸 英超 英格兰足
總盃
意甲 法甲
德甲 日本J1 西甲 西班牙国
王杯
英冠 美足聯
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47. Financial review
HKCTV NOW TV
Turnover
(million)
820
(-4%)
1299
(+3%)
EBITDA(earnings
before interest,
tax, depreciation
and amortization )
(million)
-6.9
(2012: 20)
29
(2012: 28)
EBITDA margin 0.2%
(2012: 3%)
17%
(2012: 17%)
(2013.1-2013.6 )
Source: 2013 Interim Results of PCCW & i-Cable
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49. Bargaining power of customers
• 1. Differential advantage of industry products close substitute:
similar types of channels
50. • 2. Buyers’ scale
Source: key communication statistics. Office of the Communication Authority
Total number of subscribers of licensed domestic pay television
services (September 2013)
2,445,000
Penetration of licensed domestic pay television services
(September 2013)
101%
Bargaining power of customers
51. • 3. Buyer switching costs
Contract expiry: no actual cost
Service cancellation fee: 800 or remained monthly fee
• 4. Buyer information availability
Stalls set up in neighborhood
Hong Kong “Street Fighters”
Bargaining power of customers
52. Bargaining Power of Suppliers
Content Suppliers
Unique selling point: News and current affairs; Entertainment
Dependence on content suppliers
Cable TV Content suppliers
e.g. TV series and sports programmes
Weaker financial background and business support system than NOW TV >>> less likely
to bid a higher price
exclusive broadcasting rights
auctions and biddings (Intern ational channels and
external organizations)
53. Technology Supplier
Self-owned transmission network and service:
Hybrid Fiber Coaxial Cable (HFC)
supplemented by
Microwave Multipoint Distribution System (MMDS)
and
satellite transmission
By March 2012, HKCTV’s network covered around 2.3 million
households, i.e. 97% of the total households in Hong Kong
(Broadcasting Authority Annual Report, 2010-2012)
Bargaining Power of Suppliers
55. Threat of New Entrants
Market dominance of three domestic pay television program
service licensees:
Hong Kong Cable Television Limited
PCCW Media Limited
TVB Network Vision Limited
High entry barriers in the pay TV market
Finance: high start-up and operation cost
Technology: high requirement of technical expertise
Operation License: government approval
56. Approval of free TV broadcast license to Fantastic Television by
HK government
Doubled free-to-air TV operators >>> Growing competition in the free TV
market
More support for the free TV channel
I-Cable: investment of HK$1 billion in the fist six years (Bloomberg, 2013)
Decreasing support for pay TV channels >>> competitiveness weakened
Threat of New Entrants
Low threat of new entrants
57. Threat of Substitute Products or Services
Substitutes regarding Transmission Modes
Digital terrestrial television (DTT)—— Free-to-air TV
Free of charge;
More television channels;
High-definition television programmes
Broadband network (IPTV)
TVB Pay Vision could be accessed via the same set-top box of PCCW Media with a
separate electronic programming guide which is distinguishable from that of PCCW
Media’s “now Broadband TV” service.
58. Coverage of Different Television
Transmission Modes in March 2012
Threat of Substitute Products or Services
(Broadcasting Authority Annual Report, 2010-2012)
59. Threat of Substitute Products or Services
Similar types of channels/ programmes
Fully digitized platforms of all the pay televisions
Zero switching cost after contract expiry
Other pay TV
services
Illegal decoder
retailers
Crack passwords to unlock pay TV decoders
Pirate viewing of Cable TV programmes
Loss of potential customers of Cable TV
60. OTT TV (Over-the-top)
On-demand service
Multiple platforms access: tablets, smartphones, connected TVs,
STBs and web
Delivery of video and audio over the Internet by third party content
providers: Now TV, Netflix, Hulu
High threat of substitute products or services
Threat of Substitute Products or Services
63. 1
• Glenn Britt, CEO of Time Warner:
“Embrace all of the screens”;
“There is no such thing as a TV anymore.”
• Interview: Alan Cheung – Controller of
i-CABLE’s New Media Development Department.
• With movies, TV programs and videos more readily
accessible on mobile devices thanks to the
expansion of Wi-Fi network, quality and screen
size become essential.
Tablet, game console …
Embrace all screens
64. 2 Elevate program content
• HKCTV’s most prominent advantage over the others is its well-
established news channels.
• Bid for exclusive rights to broadcast sports tournaments rationally.
More dollars into producing high-quality self-made programs.
•Fantastic Television – New free TV license.
Purchase high-quality TV dramas from independent producers;
Develop creative entertainment programs (e.g., reality talent
shows) to grasp young audience market.
65. 3 Enrich subscription flexibility
• HKSAR Govt : 1/5 of HK population were below poverty line in 2012
Flexible, scaled-back & cheaper subscription packages
• Advanced set-top box and the gradual
move to IP will increase cable TV’s
flexibility.
• HKCTV: 16 fix-priced TV subscription
packages (14 to 83 channels).
66. 4 Think forward to Over-the-Top
In the future, i-CABLE may consider
an ”if-you-can’t beat ‘em-
join-’em’” approach in face of
OTT challenges.
E.g., COX: started to provide video
service on the internet from Jul.
2013.
The future of cable television lies in on-
demand services delivered over
multiple platforms.
OTT providers still have several
hurdles to jump before displacing
traditional pay TV.
– they must offer live events and sports
(Arker, 2010).
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