HONG KONG — Wharf Cable, the territory’s lone cable operator, moved a step closer to profitability this week with the introduction of paid advertisements on eight of its 15 basic channels, as the government lifted a ban last week on running advertising on the cabler.
Wharf, which began operating in 1993 and has yet to make a profit, has a monopoly through 1998, when the government plans an in-depth study of the entire broadcasting industry.
Last year, Wharf posted an operating loss of HK$580 million ($75 million). The company said it expects to break even on operations by the end of 1998 but anticipates no pre-tax profit before 2000.
After a rocky first few years, Wharf now says it has about 350,000 subscribers and is adding 10,000 to 12,000 new ones each month.
The ads have given Wharf a shot in the arm. “It’s going quite good,” Tsang said. “So far, fortunately, touch wood, we have exceeded expectations.”
What those expectations are exactly, Tsang won’t say. Subscription fees make up about 90% of revenue, with the four pay-per-view movie channels and premium service HBO making up the rest. But Tsang won’t go out on a limb about how much the company expects to make on ad sales.
Wharf has already said that it will sell only half the government-allowed maximum of 10 minutes of commercials per hour. Some say it’s a face-saving exercise but Wharf defends the decision as a way to showcase advertisers and keep viewers happy.
That doesn’t mean, however, that Wharf won’t go after the big-spending advertisers. “We will try guerrilla warfare on the local market to convince them to buy our time,” said Tsang.