Global dreams tempered by broadband reality
JON OGDEN
Pacific Century CyberWorks chairman Richard Li Tzar-kai once hoped the television programmes and Web site content produced in London would help turn him into a bigger player on the global business stage.
There were two ends to the idea. One was to produce ground-breaking interactive content from Chiswick. Though under the direction of CyberWorks, most of this work was outsourced to Mark McCormack's Trans World International (TWI).
The other end of the plan was to deliver the content to up to 130 million cable-connected households in Asia from Bombay to Tokyo. For that, CyberWorks would reap subscription revenues, advertising and even a percentage from e-commerce conducted over the channel.
The plan wowed investors when the markets were running hot for Internet stories in 1999 and last year, and helped Mr Li build up the share price to such an extent that he could pull off last year's US$28 billion takeover of Cable & Wireless HKT.
But that plan has never really worked out in practice. For a start, rather than breaking the mould, the English-language content from Chiswick has been panned as bland and banal.
Millions were forked out on building state-of-the-art studios and production facilities over, by CyberWorks' own estimates 75,000 square feet. Michael Johnson, the architect of Mr Li's former Star TV, was rehired as creative director. He reportedly said spending on the project amounted to "hundreds of millions of dollars".
When the winds of the financial markets turned against heavy Internet spending, CyberWorks realised it had to cut back. In November, CyberWorks shut down its studios in Hong Kong which were preparing to deliver Chinese-language content. At the same time, a source said, plans to open another studio in New York to allow round-the-clock programming for NOW were shelved.
In addition, CyberWorks had not been able to deliver on its plan to partner with dozens of cable operators in key markets such as China, Japan and India. In Hong Kong, Cable TV's three-month trial with the NOW channel ended in November.
Though the revenue-generating end of the plan may not be there, the output from Chiswick is still being pumped out because CyberWorks is tied to a 10-year contract with TWI.
It is available free in cyberspace at www.now.com but less than 2 per cent of the Internet population in Greater China, once seen as a key market, visit the site each month, according to research firm iamasia.
CyberWorks is missing the power of the cable companies to draw their captive audiences on to its channel and Web site.
After announcing an US$886 million loss for last year in March, Mr Li said of NOW: "Scale back is our philosophy because we expect advertising revenues will be scarce or nil."
For the 330 workers, it must be a disheartening experience.
"It is a bit like producing a newspaper every day and knowing that nobody is going to read it," said a source.
But they know their jobs should be safe as TWI may not be in a hurry to end the production contract. When CyberWorks and TWI signed their deal, TWI only took a "very small" stake in Pacific Century Convergence, the parent company of NOW.
CyberWorks faces paying back US$4.7 billion in loans for the C&W HKT takeover amid Internet-hostile financial markets.
That has led it to emphasise its new strategy of using HKT's assets to become a value-added telecommunications company while cutting back on spending in Internet projects.
CyberWorks has effectively drawn a curtain on its global Internet ambitions by announcing its Now.com.hk initiative this month. Rather than targeting cable TV viewers, it is hoping to get PC surfers to pay extra for content in a "walled garden".
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