Hong Kong also boasts a unique population of prosperous, media-savvy, and snobbish consumers, eager to show off the very newest and latest technology. It already enjoys the highest rate of mobile-phone penetration in the world outside Scandinavia, where the most widely used form of the technology was invented. But from the beginning, the venture was dogged by problems. And since then, Hong Kong Telecom hasn't found a way to make the financials add up. Steep discounting means that Hongkong Telecom loses money with each new customer it signs up, owing to the cost of providing set-top boxes and buying video content.
Customers say that for all the service's drawbacks, it offers one great advantage.
Still, iTV has a way to go before it delivers on that promise. Because interactive television is so new, it has suffered in every market where it has been introduced from a lack of jazzy and enticing online services and applications to complement the movie offerings. Hongkong Telecom officials are reluctant to comment on the numbers, but they say that four-fifths of the time, the system is still used for movies. And of the 350 films in iTV's library, about a third are pornography flicks. Indeed, its biggest customers seem to be such soft-porn aficionados, including housewives watching blue movies in the late afternoon, according to iTV's founder, William Lo, who has since left Hongkong Telecom for Citigroup.