New Zealand, Hong Kong top TV regulators: CASBAA report

Compiled by industry body CASBAA, the latest, and third, ‘Regulating for growth’ study ranks the region’s regulators according to the effectiveness of their measures in encouraging pay-TV growth and stimulating economic activity.

The most favourable regulatory environments were found in New Zealand and Hong Kong, with Japan, Australia and Malaysia running closely behind.

Findings show that the best-regulated markets use a ‘light touch,’ creating an open environment that fosters active competition.

“The objective of the study is to highlight the fact that effective regulation results in stronger market growth and the direction in which governments must move in order to tap that economic potential,” said Marcel Fenez, chairman, CASBAA.

But even in ‘light-touch’ regulatory environments there are found to be weaknesses, such as extensive interference in sports programme decisions (Australia), insufficient protection for intellectual property in broadcasting (Hong Kong), a playing field tilted in favour of domestic players (Japan), and trade barriers confronting advertising (Malaysia).

At the bottom of the CASBAA rankings come systems which are basically closed to outside participation (China), or suffer from over-regulation, where bureaucracy substitutes for market forces in setting rates or determining programme packages (India and Taiwan).

“When governments respond to advances in technology by tightening bureaucratic controls, they threaten growth of all kinds,” said Fenez. ”Asia now has clear examples of market distortions and regulatory failure and there is increasing risk that the industry will experience more pressure as the sector grows and becomes higher profile.”

Also trailing at the bottom of the rankings is Vietnam which concerns CASBAA with regulations passed in March this year which substantially increases the cost of doing business for international channels - particularly news channels. The regulations also state that all advertising content be made in Vietnam which the report deems potentally damaging to the industry.

"Were the market large enough and advanced enough, international channels may see their way clear to creating a local channel just for Vietnam. But as things stand, chances are channels will be pulling out of the market in May of next year when these regulations come into effect," said John Medeiros, deputy CEO and director of regulatory affairs for CASBAA.

With regards to the advertising regulations, Medeiros commented that it would greatly depend on how the regulations were enforced. In markets like Malaysia and Indonesia where regulations enforcing local-advertising are relatively light, channels and broadcasters remain relatively unaffected. However in the case of Thailand, where regulations banning advertising on Pay TV channels were only lifted in 2008, the ban retarded growth in the sector and raised subscription costs. Since the lifting of the ban, Thailand has seen 100 new channels introduced to the market.

Lax protection of intellectual property in broadcasting is also a common weakness,CASBAA said. It affects markets as diverse as Thailand and the Philippines (where cable operators pirate entire programme streams), and Taiwan (where the government treats signal theft as a minor misdemeanor).

The assessment examined 15 markets in Asia and Australasia, plus two international ‘benchmarks’ (UK and US), chosen for their active and successful pay-TV industries and generally well-regarded regulatory systems.

In the analysis, industry revenue and investment data is presented, and evaluated on a ‘per pay-TV household’ basis to make working comparisons across markets of vastly different sizes possible.

The regulatory regime index was also charted against markets' investment and sector value index ranking, showing the correlation between a low ranking in the index and pay-TV's low contribution to the national economy.