PATRIOT GAMES
Hong Kong's media face to face with the Taiwan factor

Joint report of the
Hong Kong Journalists Association
and Article 19



Contents

As the HKJA and other non-government organisations have for years been criticising the government for ignoring media freedoms, the administration has been equally consistent in ignoring such arguments. Depressingly, even strong support for the HKJA's arguments from the United Nations Human Rights Committee (HRC) has not been enough to make the government take note.

In November 1999, the HRC held public hearings into Hong Kong's compliance with the International Covenant on Civil and Political Rights (ICCPR). This was the first hearing since the July 1997 handover, and followed the submission of a Hong Kong government report, through China, in January 1999.

Prior to the public hearings in Geneva, the HKJA submitted its own report. This document highlighted the deterioration in the judicial and political environment, the threat of Basic Law Article 23 laws, the need to bring all media-related legislation into full compliance with the ICCPR, threats to Radio Television Hong Kong's editorial independence, doubts over the administration's commitment to open government, and the threat of media regulation.

Hong Kong human rights groups, including the HKJA, lobbied the HRC during the hearings. Government officials were also present to take formal questions from committee members.

In its concluding observations, the Human Rights Committee highlighted several failings in Hong Kong. Among other things, it expressed concern about the implications of the re-interpretation of the Basic Law in June 1999, the broad manner in which existing treason and sedition offences are defined in the Crimes Ordinance, the way in which post-handover changes to the Public Order and Societies ordinances could restrict assembly and association, and the need to bring government powers to intercept messages and mail into line with privacy rights.

A Hong Kong government spokesman said officials would study all the points made by the committee. However, in follow-up meetings with senior officials, representatives of non-governmental organisations, including the HKJA, came away with the impression that little would be done.

The government's uneasy interface with the media

This past year, the government has taken its campaign of "spin doctoring" and misinformation to new lengths. Hong Kong aspires to be a modern pluralistic society. Many advanced democracies, including the United Kingdom and the United States, have elevated these practices to a fine art-from these the administration clearly takes its cue. Although the government has every right (indeed it has a duty) to put its position across to the public, some of the tactics it employs are undoubtedly underhand. Indeed, it is questionable whether such tactics are really in the public interest. In our view they are often aimed at discouraging both critical journalism and media diversity by utilising selected or mainstream media to "drown out" adverse comment and different points of view. Ironically, as in the case of the Blair government in the UK, the end result could be a loss of credibility for the government itself.

Mr Stephen Lam, the chief executive's chief spokesman, has continued over the past year to take a highly active approach in getting the government's message across. When the government perceives itself to be in need of swaying public opinion, it can at times be almost impossible to find a morning talk show that does not have a senior government official pushing the official line. Although this was most true during the crisis caused by the right of abode case and the subsequent re-interpretation of the Basic Law, the government also went into top gear on other subjects. These included a highly effective campaign to persuade the Legislative Council and the public of the benefit of its generous deal with the Walt Disney Corporation to build a new theme park in Hong Kong.

New tactics have also been explored and found effective. They include:
l An ability to focus clearly on getting public opinion to a certain state on a certain date. If the government's arguments later proved not to hold water, the crucial period would have passed. This is the sort of tactic often used during election campaigns in developed democracies;

l Promotion of allies and muffling of critics. Perhaps the most obvious example of this is the use of prominent lawyers to support the government by counterbalance the views of lawyers' professional bodies, which at times can be hostile to government policies seen as eroding the rule of law. As an example, articles by prominent barrister Alan Hoo were circulated by the government to newspapers by government information staff. While there is no suggestion that Mr Hoo's views were anything but his own, it was perhaps misleading of both the Ming Pao Daily News and the South China Morning Post to print his article without informing readers that it had been circulated by the government.

l The growing use of unattributed media briefings, whereby government officials are able to hide behind a mask of anonymity over such crucially important issues as the cost of electricity supplies to Hong Kong households.
Separately, we are also concerned about the government's increasing resort to secrecy. Important documents needed to better understand government policies are often withheld. Issues subject to government secrecy include a report that considered alternative uses for the site to be occupied by the Disney theme park on Lantau Island. Having made up its mind to hand the prime site to the US entertainment giant, the government then refused to allow this report to be released.

In addition, the government reneged on a promise to release details of the largest company investigation of the 1990s. Costing no less than HK$20m, individuals named in the report into alleged wrongdoings at the World Trade Centre Group included Australian tycoon Alan Bond and powerful Macau casino magnate Stanley Ho. In 1994, officials said the report would be issued in full after all legal actions were over. In February 2000, after the last legal action had ended in failure, it changed its mind-without ever giving a proper explanation.

This is just one of many incidents over the year. And it is not only journalists who have problems. Environmental campaigners and politicians have been increasingly outspoken on this issue. For instance, pro-democracy politicians were angry that they were initially barred from seeing the government consultancy report containing the costs and benefits of Hong Kong's bid to host the 2006 Asian Games.

The government regularly produces statistics claiming that its Code on Access to Information, an administrative code with no force of law, has resulted in the vast majority of records requests being met in full. It ignores the fact that most requests are routine (see 1999 Annual Report for our criticisms in detail). The HKJA and ARTICLE 19 believe only freedom of information legislation can ensure that the government is not able to evade accountability by suppressing the embarrassing and the inconvenient.


SECTION 2

The backlash from years of bad behaviour

In the year under review, the local media, particularly the popular press, has faced a public backlash over the malpractices of years past. Both the government and the public urged the industry to be accountable for its alleged misdeeds, in particular over sensationalist news coverage, and the publication of sexually-explicit articles and photographs.

The media's performance came in for particularly intense criticism during the public-consultation exercise on privacy issues and the (related) proposal to set up a statutory press council, and following the publication in April 2000 of government proposals to bring about stricter regulation of the publication of indecent and obscene articles. Other issues strained the media's credibility, among them the arrest and conviction of an Apple Daily reporter on corruption charges, and the decision by Asia Television (ATV) to use two well-known artistes to present the station's peak-hour news programme.

Privacy-the flawed laws we have

Last year, this report warned of the rising danger to media freedom from issues related to privacy. We wrote in 1999:

"Privacy is an area in which new threats may be emerging for media freedom. The HKJA has long supported the need to protect an individual's privacy, and our ethics committee has often criticised media organisations for indiscriminately disclosing details of a personal nature without due regard to privacy. However, over the past year, new moves apparently aimed at protecting privacy have led to growing fears that media freedom may be compromised through well-meaning attempts to bolster privacy protection."
Sadly, this has proved correct. The core problem with privacy protection in Hong Kong is that the pre-handover Hong Kong government enacted legislation-the Personal Data (Privacy) Ordinance-to protect privacy, mainly in the area of computer data, because of commercial pressure. The European Union was threatening sanctions against trading partners that failed to enact such a law, cutting them off from the flow of data that is the lifeblood of world commerce.

The result: Hong Kong now has a strong privacy law and a well-funded and activist privacy commissioner to enforce it, as in many developed countries. However, the law-drafted specifically with data in mind-is now being stretched to the media without sufficient understanding that divulging an individual's name to a junk-mail company and printing an individual's name in a newspaper are not always comparable activities.

In addition, the web of other enforceable rights in many other countries is not available here-for instance, there is no statutory right of access to government-held information and only limited right of access to information from the judicial system. The result is a lopsided regime, and one in which-unsurprisingly-many responsible media workers feel fenced-in.

It is important to note that despite claims that media organisations are major violators of personal privacy, only a small number of formal complaints to the privacy commissioner are media-related. As of May 2000, just 42 or 3% of the 1,367 complaints lodged since the law came into force in December 1996 involved the media.

Despite their low number, two of the media-related complaints to the privacy commissioner have created worrying precedents this year:

- A case of fashion: Opening the way for new controls over news photography is a case, resolved finally this March, of a woman who lodged a complaint after the mass-circulation magazine Eastweek took and published a photo of her in the street in an issue in September 1997. The accompanying caption ridiculed her taste in fashion, calling her "Japanese mushroom head". The complainant, who was not named in the article, told the privacy commissioner that the picture had been taken without her consent and that it had caused her embarrassment. The commissioner found in her favour, arguing that the taking of her photograph constituted the collection of personal data, and that this was done in an unfair manner, contrary to provisions in the ordinance.

In September 1999, Court of First Instance judge Mr Justice Keith found in favour of the privacy commissioner in an appeal by Eastweek. But at the same time, he questioned whether the taking of photographs should in fact constitute the collection of personal data. Mr Justice Keith said that he remained

"extremely sceptical about the correctness of the Commissioner's view, but since neither party wished to argue that the photograph did not amount to data, and because I have not had the benefit of any argument in support of my provisional view, I do not think that I should consider the matter further."
In March 2000, the case went to the Court of Appeal, which found by a majority of two to one in favour of Eastweek. It argued that the appeal should be upheld because personal data was not collected about an identified person, and therefore the provisions of the ordinance should not apply to this particular case. The Privacy Commissioner has decided not to appeal.
At the same time, the court deliberated on the crucial question of whether taking photographs constituted the collection of personal data, ruling that in some circumstances it could. Mr Justice Ribeiro pointed, for example, to the taking of someone's photograph "with a view to its inclusion as part of a dossier being compiled about him as an identified subject."

This is an uncertain judgement for the media, and could open the door to new and unpredictable controls on news photography. The legislative process creating the law was focused on data-and indeed further laws specific to media issues were always said to be in the pipeline. In effect, photographers are now-in certain (ill-defined)-circumstances collectors of personal data subject to the same legal constraints as banks and credit agencies.

- The Legco assistant: In March 1999, the privacy commissioner found in favour of an assistant to a member of the Legislative Council who complained that her privacy had been violated by an article in the Hongkong Standard, which listed the names and pay of the top five legislative assistants. Such information was contained in a public register to which a note had been attached, apparently without legal basis, saying that personal data could not be used without the consent of the individual concerned. The Hongkong Standard decided not to appeal against the commissioner's decision.
The HKJA is concerned because the information contained in the public register should be generally available to the public. Such information could, for example, reveal misuse of public funds. This is pertinent and in the public interest. Hong Kong legislators have in the past been found to have spent taxpapers' money extravagantly, on such items as cameras, bibles and electronic dictionaries.

Such a ruling threatens a whole range of public interest-related media activities, including investigations of poll frauds and of conflicts of interest between government officials and their private companies. The HKJA thus disagrees strongly with the privacy commissioner's ruling, believing the commissioner has completely misunderstood the purpose of the register, which is to encourage public scrutiny-precisely of the sort triggered by the Hongkong Standard.

The HKJA has pressed this point on the commissioner, but as the association has no legal standing on this matter, it is unable to lodge an appeal or take its concerns any further. However, in a meeting with the commissioner in December 1999, he indicated he at least appreciated the HKJA's strong concern.

Privacy-the flawed laws being proposed

In August 1999, a sub-committee of the government-appointed Law Reform Commission issued two consultation papers on privacy. Both were potentially damaging to press freedom.

One of the papers focussed on privacy and the media. It concluded that the media's infringement of privacy was now so bad that a statutory Press Council for the Protection of Privacy-its members appointed indirectly by the chief executive-should be set up. In brief, the sub-committee's report argues that while media self-regulation may be the best option, it is not feasible "because the press industry in Hong Kong is by its nature unable to regulate itself effectively or to establish any body to do the same." In effect, it argues that the two main media organisations in Hong Kong-the Oriental Press Group and Apple Daily-are unlikely to participate in any self-regulatory body. Given the two media giants control an estimated 80% of the print market, this will render such a body ineffective.

The report goes on, therefore, to advocate the creation of a Press Council for the Protection of Privacy to deal with complaints from members of the public on privacy-related matters. The proposed press council would cover only registered newspapers and magazines, and not broadcasters, which come under the jurisdiction of the Broadcasting Authority.

The sub-committee proposes a cumbersome system for appointing the council's 12 to 20 members, half of whom would come from the media profession and the other half from the public. The chief executive would appoint a person of high standing to appoint the three members of an appointments commission who in turn would select the members of the press council. This is an indirect way for the chief executive to appoint the members of the council. In addition, the privacy commissioner, who is a public servant, would become a public member of the council. This adds an element of direct appointment.

The council would be funded by a levy imposed on all newspapers and magazines registered under the Registration of Newspapers Ordinance. However, the sub-committee also concedes that if this is not feasible, then the government might have to bankroll the body. The council would have the power to consider breaches of a privacy code, to be drawn up by the council, and to fine publications up to HK$500,000 for a first offence, and up to HK$1m for subsequent offences.

The second paper was on civil liability for invasion of privacy-giving people the right to sue for damages, including hurt feelings, if their privacy was invaded. This law, something of a legal experiment that many common-law jurisdictions have shied away from, proposed a list of public-interest defences aimed at allowing the media to continue investigative activities. But the report failed to address whether the proposed privacy controls were necessary and proportional. It failed to list a single practical case in Hong Kong in which real problems, which the HKJA acknowledges exist, would have been resolved.
In his annual policy speech in October 1999, Chief Executive Tung Chee-hwa weighed into the debate, noting that "(t)he SAR Government will continue to protect press freedom in strict accordance with the Basic Law. But we also believe 'press freedom' should not become a pretext for disregarding media ethics." He added: "This is an issue of prime public concern which deserves the Government's due attention."

The sub-committee's proposal to set up a statutory press council met with overwhelming rejection by journalists. In a survey conducted by Lingnan University, more than 70% of the 1,026 journalists polled voted down the recommendation. The majority (52%) also expressed a preference for the media to adopt an internal regulatory mechanism to resolve ethical problems.
But there was some confusion about whether such mechanisms could work. A significant 42.5% of respondents were neutral on this question. About 27% thought the measures would work, while almost 20% believed they would not. In response to a question as to whether a statutory non-government monitoring organisation should be set up, almost 56% agreed to a greater or lesser extent.

Media organisations also came out unanimously against the sub-committee's proposal, arguing that the press should look after its own affairs, and that it was dangerous for the government to play any role in the affairs of the industry. However, representative organisations differed over how to tackle the question of media intrusion.

The Newspaper Society, which is composed of owners and which has traditionally shied away from ethical issues, has decided to set up a non-statutory press council primarily to tackle privacy issues. It is expected to be formed in July 2000, but is unlikely to include representatives of the Oriental Press Group and Apple Daily. In a controversial move, it is also seeking an exemption from defamation charges.

Four other media organisations-the HKJA, the News Executives Association, the Hong Kong Federation of Journalists and the Press Photographers Association-have compiled and released a joint code of ethics, which has won backing from 18 out of 27 mainstream print and electronic media groups. However, there has been considerable resistance to a call by the HKJA to have the code incorporated into employment contracts, in a bid to protect journalists from unethical demands by employers.

The privacy sub-committee has decided to revisit the question of how to tackle media intrusion in the autumn of 2000, with a final Law Reform Commission report expected next year. There is as yet no indication as to whether the sub-committee will revise its call for a statutory press council. But it will almost certainly take into account moves by media organisations to tackle ethical problems.

The HKJA and ARTICLE 19 would urge the sub-committee to reject any press council with statutory powers, given that it would involve direct government and legislative intervention in the media industry at a time when judicial and legislative safeguards are insufficient to provide any meaningful check on possible abuse. It should also allow the media to tackle ethical problems on its own through a self-regulatory mechanism. At the same time, the media industry itself must move rapidly to take a more ethical approach towards journalistic activities, if it wishes to avoid the path of government-imposed regulation.

The threat of new obscenity laws

In April 2000, the government released a consultation document aimed at controlling the publication of obscene and indecent material in the media, including the Internet. The issue had been under discussion for some time, with community groups urging the government to take action against the publication in mass-circulation newspapers and magazines of guides to prostitutes and of photographs of scantily-clad women.

The Control of Obscene and Indecent Articles Ordinance already regulates the publication of such items. Obscene articles are banned, while indecent publications must be wrapped in plastic bags, so that minors are unable to look through them at news-stands. They are on sale only to adults.
The government is now proposing to extend these controls, by introducing an identification system for persistently offending publications. According to the proposals, such publications would have to carry warnings as well as a diagonal red line across every page, and would be available for sale to adults only. Maximum fines for publishing obscene and indecent articles would be doubled.

The acting secretary for information technology and broadcasting, Eva Cheng, said the measures were not aimed at restricting the free flow of information. Rather, she said the government was seeking to strike a balance between the interests of young people and the freedom of adults to gain access to information.

The HKJA came out strongly against the government's proposals, arguing that the existing law was more than sufficient to tackle the problem of genuine obscenity and indecency. We argued that many of the government's proposals were in contravention of natural justice and risked being manipulated to punish media organisations which may have annoyed the government for political reasons.

The government received 3,550 submissions on the obscenity issue at the end of its two-month consultation exercise. Officials have indicated that they might drop the proposal to stamp a diagonal red line across every page in an offending publication. But they are likely to pursue other proposals, and legislation will probably be introduced soon after the September 2000 legislative elections.

New controls on the Internet

The government's consultation document on obscenity has also revived proposals dropped by the pre-handover government to censor the Internet. In short, Internet service providers will have an obligation to block obscene sites, once they become aware of their existence. Failure to do so could result in prosecution. They will also have to provide filtering tools for customers.

This proposal, if it becomes law, would force service providers to set up an elaborate system of blocked sites. This could set a precedent for similar action in other areas, for example sites discussing the activities of independence advocates in Taiwan or Tibet. This is not only a dangerous move. It could also prove harmful to Hong Kong's economy, to say nothing
of the city's reputation as a base for e-commerce operations.

Self-censorship remained an area of concern in the year under review, despite continuing coverage of sensitive issues such as dissident and separatist activities in mainland China and the activities of pro-independence politicians in Taiwan. Indeed, the media's critical response to the political pressure exerted by a senior mainland official, Wang Fengchao, on the question of Taiwan reporting, demonstrated that journalists and publications were ready to safeguard press freedom.

At times, ironically, the media has been accused of over-reacting to issues. Critics pointed to the reaction to the government's transfer of the former director of broadcasting and head of Radio Television Hong Kong (RTHK), Cheung Man-yee, to a trade post in Tokyo. Her image as the defender of RTHK's editorial independence was almost certain to politicise the reasons for her move in the local media. Whether the issue was over-exaggerated or not, it revealed that the local media regarded any major changes at RTHK to be a symbolic threat to press freedom.

Other sectors of the media faced charges of self-censorship. For example, in July 1999, the Mass Transit Railway Corporation (MTRC) was criticised by a book distributor for suspending the promotion of a controversial book written by the then Taiwan president, Lee Teng-hui. The MTRC later explained that the controversy was due to a miscommunication between itself and the advertising agency. However, the explanation drew extensive public discussion as it coincided with the public criticism by senior officials in Beijing of Mr Lee's "two-states" theory.

In another case, a major paging company with mainland links, China Motion, came under fire for its policy of not carrying messages bearing the name of the spiritual group, the Falungong, which is banned in mainland China, but permitted in Hong Kong. Hong Kong's telecommunications regulator, OFTA, intervened, and the paging company eventually agreed to transmit sensitive messages within Hong Kong, though not necessarily beyond the SAR's border.

There were also allegations, too, of media bias in the presentation of important stories. For example, critics accused some newspapers of covering the March 2000 presidential elections in Taiwan in a one-sided manner. These publications were accused of supporting candidates who were less provocative in Beijing's eyes. Other critics alleged that publications were focussing on dramatic events, such as conflicts and protests, to the detriment of critical analysis of the election dynamics. The latter, they claim, would have led to a greater understanding of why the eventual winner was Chen Shui-bian of the pro-independence Democratic Progressive Party.

More libel cases go to court

Our 1999 annual report made reference to the growing use of libel suits against the media. This trend has continued in the year under review and has started to prompt calls for libel laws to be reviewed. The most significant case over the past year involved a three-year dispute between the Oriental Press Group and Radio Television Hong Kong (RTHK). In November 1999, the Court of Final Appeal overturned an appeal court ruling ordering RTHK and presenter Claudia Mo to pay damages of HK$80,000 to the Oriental Press Group and Eastern Express Publisher in connection with comments made by Ms Mo about the increasing use of libel suits by the Oriental Press Group against other media organisations.

The chief justice, Andrew Li, said the original judgment, made in a lower court, should be restored in the interests of the defence of fair comment on a matter of public interest. Another judge hearing the case, Sir Anthony Mason, noted:

"In a society in which there is a constitutional guarantee of freedom of expression, no narrow approach should be taken to the scope of fair comment on a matter of public interest as a defence to an action of defamation."

However, the media lost another case in which the effectiveness of the "fair comment" defence was at stake. The Court of Appeal upheld the judgement of a lower court that Commercial Radio talk-show hosts Albert Cheng King-hon and Peter Lam Yuk-wah defamed a lawyer in a programme broadcast in August 1996. The counsel for the talk-show hosts argued that the lower court judge had misdirected the jury on the element of malice, thereby defeating the defence of fair comment. The Court of Appeal rejected the counsel's argument.

In February 2000, three other talk-show hosts were found not to be liable in a case in which a caller to a Commercial Radio phone-in programme made comments about the Oriental Press Group. A jury did, however, find the radio station liable for the comments. It decided that the defence had failed to prove the remarks were either true or substantially fair comment.

Such cases prompted some observers and academics to suggest that changes were needed to the law on defamation. A City University law lecturer, Anthony Law Man-wai, said Hong Kong's defamation laws were not very clear. He also suggested that honest comments that were not totally fair should not necessarily be considered defamatory.

Another academic, journalism professor Chan Yuen-ying, called for libel laws to be reformed "in an effort to foster robust public debates." She noted that the burden of proof now falls on defendants to prove in court the truth of every word they say. She said this "stifles opinion and the free flow of ideas."

SECTION 3

New media, new problems

A major development during the year under review has been the strong growth in the dotcom sector and the creation of a multitude of new Internet "publications". This has fuelled demand for journalistic content as it has also created new jobs for journalists at a time when the traditional industry was still recovering from the Asian economic crisis. In some cases, this has left the "old media" desperately short of talent and forced to hire relatively less experienced staff.

The dotcom craze, which hit Hong Kong with a vengeance in late 1999, should in theory lead to greater media diversity: at present, just two media organisations-the Oriental Press Group and Apple Daily-command almost 80% of the traditional print market. Whether media diversity will be improved by the Internet trend remains to be seen. A word of caution. Some of the more influential entrants to the dotcom market are existing newspaper and broadcasting organisations, including the market leaders.
Separately, while there have not been any significant closures during the past year, there have been a number of lay-offs in the traditional sector as the regional economic crisis continued to make itself felt in Hong Kong, particularly during the first half of the year under review. Asia Television (ATV) shed 600 jobs, while Tin Tin Daily and Hong Kong Daily sacked a total of about 100 employees.

There were also changes in the English-language newspaper market. In May 2000, Sing Tao Holdings, following its take-over by Lazard Asia, launched a new tabloid newspaper, Hong Kong iMail, to replace the Hongkong Standard, which had been buffetted by a circulation fraud. Prior to the launch of the new tabloid, the dominant English-language newspaper, the South China Morning Post, underwent a major design revamp.

Good news-more investment

First, the good news. This year has seen an explosion in spending by both new and old media-leading to a recruitment bonanza. Apple Daily's Internet operations may soon be employing close to 200 staff-in many cities this would be enough to run a major daily newspaper and its Internet arm. Newcomers too are hirers: Quamnet, e-Finet and a string of other online financial news services typically employ at least 10 journalists. A string of online operations covering technology have also been set up, again recruiting staff.

In addition, many of the US-based financial or technology news services are using Hong Kong as a base for Asian coverage-a very positive development. Some, such as the Motley Fool online finance site, are employing experienced journalists full-time to work as their Asian or China correspondents, or as columnists.

Picking winners...

Without doubt, many new e-jobs are lowly. Some online journalists are nothing more than collectors of press releases, who attend the first five minutes of a press conference then leave to relay three sentences back to their online newsroom-perhaps covering five or even ten such "stories" a day. In extreme cases, these journalists simply hold mobile phones aloft, transmitting speeches or presentations back to their head office for instant webcast.

Not all new jobs are so basic. Many of the big-spending sites have hired their own photographers and artists to try and tell the news in a more interactive style. Many experienced writers and editors are also working online, including some within portals and other non-traditional media businesses. In some cases, the short deadlines and limited editorial checks of online publishing mean employers want staff who have more experience, not less.

Yet despite the recruitment efforts of new players, the big winners look like being the established media players. They are able to use their existing workforce as reporters for their online editions. Already many news organisations make use of their online editions to publish material they are unable-for reasons of space-to publish in their paper edition. In addition, radio stations in particular are able to generate a new revenue stream selling their news to online ventures which want to add news to their site.

All-day online update services offered by most of the major daily newspapers certainly offer a service for readers. Although often skimpy and confusingly organised, they offer readers an alternative to waiting for the evening TV news.
Increasingly, reporters in the print media in particular will attend a news event and file a short piece (under intense time pressure) for an Internet update-sound files for a web site and a longer article for a traditional newspaper.
This type of multi-skilling requires more training and higher pay-areas long neglected by media proprietors. The trend is also changing the nature of journalists' salaries. At least two major media groups are now offering journalists share options, one to all its journalist staff, the other only to senior journalists. In the latter case, there is a certain irony. Share options are used in Internet start-ups to sweeten staff to low salaries and long hours-conditions many junior journalists endure already: yet it is their editors who are getting the share options.

Bad news-little extra diversity

But all this is a far cry from three years ago when many believed that new media ventures would be launched on the Internet only. No viable business model has yet emerged which would support such a venture. The rush online has pushed up salaries for skilled staff, pushing up costs. The rush also means advertisers have a wide choice of venues for their banner ads, pushing down revenues.

Certainly, there have been online news organisations that have made their mark. Quamnet, e-Finet and a few other players have succeeded in offering financially viable stockmarket news services-but they have greater opportunities for revenue through e-commerce than news services. Their articles may influence the stockmarket and may be picked up by mainstream news organisations. Yet their core business is provision of equity prices, not news. Quamnet's Chin Man admitted as much in a speech in May when he labelled his journalists "marketing tools".

For more general news and comment sites, the jury is still out. A venture known as 36.com has been launched by popular radio host Albert Cheng and two management consultants, while an online newspaper, Cyberdaily, is attempting to tackle the established players with an online-only newspaper. Cyberdaily's activities have included such costly ventures as sending staff to cover the Taiwan presidential election and assigning no less than six journalists to attend the closed-door pre-briefing for the annual government budget.

In entertainment news, a site named show8.com has been set up by a group of experienced media figures. In addition, a site known as RadioRepublic is attempting to give Hong Kong the long-overdue public-access broadcasting denied to traditional outlets. This commercial venture offers a forum for political, religious and social groups to spread their views, a first for Hong Kong.

However, with the exception of RadioRepublic, this is all a long way from the hopes that new-flavoured media outlets would spring up. The new players see the web as a new distribution tool that allows a start-up to take on traditional media on their own ground at reduced cost, not as an opportunity to create new types of content or explore radical new areas of coverage.

Pushing up the stakes

New players must also contend with massive spending by old players. Publishers and proprietors have been mesmerised by the Internet, in some cases under pressure by stockmarket analysts who have threatened to mark down any firm without an Internet strategy. Even those without a stockmarket listing have seen the chance of a lucrative initial public offering-although the sharp decline in technology stock values has lessened this hope.

The result is that many organisations have been investing heavily at a time when their traditional media business has yet to return to full profitability after the Asian financial crisis. A sampling of the moves this year include:

l Apple Daily publisher Jimmy Lai visited Silicon Valley to find web talent, and is building an online news team of 200. The online news operation will run 24 hours a day, 365 days a year and will dwarf the Hong Kong operations of traditional wire services such as Reuters;

l A spin-off from the online operation of Ming Pao Daily News gave the former a valuation greater than that of its paper parent, which produces the editorial content for the site. The newspaper spun off its online publication business, Mingpao.com, in February 2000, attracting an investor that gave the newly-born business a market valuation of HK$1bn-larger than the market capitalisation of parent Ming Pao Enterprise as measured by its share price a few months before the deal. Mingpao.com intends to employ 170 staff, mostly content producers, to transform the 10 newsrooms of the Ming Pao Group into multimedia operations.

Content is king, or is it?

Perhaps the most audacious move of the past year was by Metro Radio. This group had its Internet operations bundled by merchant bankers into a new corporate vehicle, which was renamed tom.com. With the vague promise of support from other parts of the empire of its main owner, tycoon Li Ka-shing, this sparked the biggest Internet frenzy the Hong Kong stockmarket has ever seen, with police having to control thousands of would-be buyers of the firm's shares. The number of would-be investors far exceeded the site's registered user base. The venture's share price has since slipped, reflecting general trends in the market.

The tom.com frenzy highlighted the upside for existing media ventures. Two years ago, the slogan in the US was "content is king"-and with their teams of reporters, editors, photographers, designers, established brandnames and columnists, old-media organisations appear still to be the kings of content in Hong Kong. Outsiders wanting to break into the Hong Kong market face high costs for translation, competition for staff and a lack of name recognition.

The ease with which content can be moved from one media to another means the electronic media can jump in too. As a result of the Internet frenzy, Metro Radio is now offering news updates online every ten minutes, while listeners to its airwave broadcasts get news every half-hour. TVB has spun off its online business, tvb.com, and sold part of it to a Malaysian investor. It intends to group all its satellite and pay services together with its online business to create a multimedia corporation. TVB decided to offer a 24-hour news service and hired Loh Chan, former publisher of Apple Daily and news controller of Cable TV, to prepare for the expansion. ATV, still the laggard of the two free-to-air stations, is also stepping up its web work.

Commercial Radio, the dominant commercial radio broadcaster, announced it would supply content to Pacific Century Cyberworks, Hong Kong's biggest Internet conglomerate. With Cyberworks run by Richard Li, son of Li Ka-shing, the deal means both major commercial broadcasters are within the Li family orbit.

The public-service broadcaster, Radio Television Hong Kong (RTHK), was once the leader in the Internet field, offering webcasts of programmes six years ago thanks to assistance from Chinese University. It too has new opportunities-although it has yet to plunge into selling its content wholesale to other web ventures. Without spare government revenue for investment, and unwilling itself to enter into commercial deals, the station's Internet development risks stagnation.

The huge spending of old-media companies on their net ventures, however, ignores many of the problems that have already been identified in the US. The "content is king" slogan is no longer heard so often there now. Indeed, the cost of generating content is much higher than most had anticipated-and the revenue from advertising much lower. Competition for ad revenue and reader attention is also much tougher. The result is that many content-based businesses have found life more difficult than they had expected. This could well turn out to be the case in Hong Kong. Indeed, in June 2000, the Internet arm of the South China Morning Post, scmp.com, announced it was laying off 18 employees. The Internet edition of Next magazine has also sacked a limited number of staff.

Uncertainties and familiar problems

The fundamental question for this report is whether the Internet surge will promote freedom of expression in Hong Kong. This is of course difficult to answer, given how new the trend is. There are undoubtedly positive signs-brand new outlets and new concepts, such as RadioRepublic.

Hong Kong has for many years been a city with a large number of news organisations, even if these have been increasingly convergent in their reporting and presentation. Now the numbers are even higher, courtesy of Internet publications. These can be set up easily, without many of the costs associated with traditional print, and without having to go through government registration procedures, which are obligatory for traditional outlets.

So far, however, the signs are that many of the new media operations are converging to the same set of values as their offline rivals. And they all seem to agree on one key issue-that the new technologies are a good thing. With large newspaper advertising sections devoted to new gadgets and to massive dotcom advertisements, it is hardly surprising there is a strong air of optimism about all technology-related news, not to mention flattering profiles of new dotcom billionaires like Richard Li, praising everything from their business skills to their haircuts.

There are worrying signs on another front-the potential for succumbing to influence and the creation of conflicts of interest for the sake of profit. Some unusual deals have been struck in the Internet frenzy. For example, when the Ming Pao group sold half its online operation, the purchaser was a telephone-equipment manufacturer in which the Xinhua News Agency-China's official news agency-has a stake of almost 10%. The same online arm of Ming Pao has also entered into a deal to offer a health portal in association with the Hong Kong Sanatorium, an expensive private hospital.

Self-censorship is another problem which has emerged in the Internet sector. In April 2000, HongKong.com-one of the most frequently visited web-sites in the territory-was discovered to be exercising self-censorship in its chat-room and discussion groups. Some net users found that the website operator deliberately deleted sensitive messages relating to the independence of Taiwan or Tibet.

The chairman of the website, executive councillor Raymond Ch'ien, argued that the website should avoid sensitive issues given Hongkong.com's strong association with mainland interests (it is a subsidiary of China.com). Nevertheless, his explanation failed to prevent protests by site visitors. The website acknowledged their reaction and eventually lifted the ban on sensitive topics.

Depressingly, hongkong.com is one of the territory's major sites-a fast-growing Internet conglomerate with extensive content provision of its own that could one day rival existing media outlets. Is such an organisation-so quick to engage in self-censorship for commercial reasons-the future? As with much to do with the Internet, the jury is still out.

ENDS