LCQ10: Regulation of free television programme service licensees
17.5.2023

Following is a question by the Hon Nixie Lam and a written reply by the Secretary for Commerce and Economic Development, Mr Algernon Yau, in the Legislative Council today (May 17): Question: There are views that the rapid development of new media and cyber technology, coupled with the fact that new media are not subject to licensing control, have posed challenges to the operation of traditional free television (TV) broadcasting. Also, with the implementation of various Generic Codes of Practice for Television (the Codes) applicable to free TV programme service licensees (licensees) for years, some provisions therein have become outdated. As such, the Communications Authority (CA) may suitably relax the regulatory measures imposed on licensees so as to improve their operating environment. In this connection, will the Government inform this Council: (1) of the year in which CA last reviewed the Codes and relevant regulatory measures applicable to licensees; whether it has regularly reviewed the Codes and relevant regulatory measures to ensure that their contents meet the social development needs; if so, of the details (e.g. years of interval for each review); if not, the reasons for that; (2) given that CA relaxed the regulation of indirect advertising and product placement broadcasting in TV programmes (including free TV programmes) in 2018, whether CA has, prior to implementing the relaxation measures concerned, studied and compared the relevant regulatory mechanisms and provisions of the neighbouring places which share similarities with Hong Kong in terms of culture (e.g. the Mainland and Japan); if so, of the details; if not, the reasons for that; (3) given that it is a requirement under the Codes that product placement must adhere to the principle of being presented in a "natural and unobtrusive" manner, but there are views that the criterion concerned is rather subjective and that the related examples provided by CA are also inconsistent with the criterion concerned, whether CA will draw up clearer guidelines and provide relevant justifications in respect of the "natural and unobtrusive" presentation approach, as well as regularly review and revise the criterion concerned; if so, of the details; if not, the reasons for that; and (4) as it is learnt that at present, quite a number of acquired programmes of the licensees contain product placement, whether CA has drawn reference from the practices in the Mainland and overseas, so as to consider further relaxing the regulation of the advertising concerned, thereby allowing it to be exposed in acquired programmes under different approaches of presentation; if so, of the details; if not, the reasons for that? Reply: President, The Communications Authority (CA) is the statutory regulatory authority of the broadcasting sector. Pursuant to the Broadcasting Ordinance (Cap. 562) and the Broadcasting (Miscellaneous Provisions) Ordinance (Cap. 391), the CA may issue or revise codes of practice (CoPs) to provide guidance for broadcasting licensees in respect of programmes, advertising and technical standards. Our consolidated reply to the various parts of the question raised by the Member is as follows: In light of the evolving needs of the community and the broadcasting industry, the CA reviews the CoPs from time to time with reference to the regulatory practices in other jurisdictions. In the past five years, the CA revised the CoPs twice to relax the regulatory controls on licensees, including relaxation of the regulations governing indirect advertising and product placement in television programmes services to enable the licensees to generate new sources of advertising income in July 2018; and relaxation of the regulations governing real estate property advertisements and insertion of advertising materials in programmes covering sports and live events in September 2020 to provide a more conducive business environment to traditional broadcasters amidst the competitions from the Internet-based/new media, while safeguarding the interest of the audience at the same time. In respect of the regulation of product placement, the current CoPs set out general principles for regulating the presentation of the relevant advertisements (including that the product/service should be presented in a natural and unobtrusive manner having regard to the programme context and genre, and there is no direct encouragement of purchase or use of product/service). Such principle based approach allows greater flexibility to suit the needs of content production and presentation in programming and advertising, while balancing the regulatory needs. The CA notes that since the relaxation of the regulation of indirect advertising in July 2018, the number of substantiated complaint cases relating to indirect advertising and product placement dropped significantly, showing that the licensees have no apparent difficulties in complying with the relevant requirements. The mid-term review of the domestic free television programme service and sound broadcasting services (Mid-term Review) was completed in February 2023. During the consultation process of the Mid-term Review, the CA received a number of suggestions from the public and the industry relating to the regulation of programme and advertising contents (including product placement). The CA has commenced a fresh round of review of the CoPs to consider the views collected in the Mid-term Review, along the general direction to refine the regulatory regime in view of the challenging business environment facing the traditional broadcasting industry. This involves a review of the current provisions governing programming and advertising matters with a view to providing a more flexible and conducive operating environment for the industry. The CA will consult the public and the licensees on the proposed amendments to the CoPs in due course. It is expected that the CoPs review will be completed by early next year and the amended CoPs will take effect upon gazettal.