Pursuant to the seventh draft regulation on pay television service management, developed by the Ministry of Information and Communications, the State will oversee this activity through an agency in charge of editorial matters and copyright purchase. The proposal is causing various concerns.
One-Stop Mechanism: To Use Or Not To Use?
By Nguyen Tan
Pursuant to the seventh draft regulation on pay television service management, developed by the Ministry of Information and Communications, the State will oversee this activity through an agency in charge of editorial matters and copyright purchase. The proposal is causing various concerns.
Pay television services are on the rise in Vietnam. The Ministry of Information and Communications says that the cable television network has reached every locality except Lai Chau Province. At present, 47 enterprises have been licensed to provide cable television services and nine are allowed to offer cable television signal transmission services. In September 2003, there were only about 80,000 subscribers to pay television services; the number has increased by over 20 times after six years.
Nguyen Hanh, representative of Q. Net Media Entertainment Co., agrees that the market for pay television services has immense potential, with expected profits of about US$500 million in the future. By comparison, the current revenue is about US$60-70 million.
However, according to the Ministry of Information and Communications, the management of these services has been riddled with problems, which should be tackled via regulations.
Pursuant to the aforementioned draft, the ministry will keep a close watch on the content of both domestic and foreign pay television programs. The content of foreign pay television programs will be controlled by an agency called the foreign program provider. Licensed by the Ministry of Information and Communications, this is the only agency with the right to engage in copyright negotiations with international television channels and to edit foreign programs which will be provided to local television service providers.
Luu Vu Hai, head of the Radio, Television and E-Information Department under the Ministry of Information and Communications, adds that this agency will be non-profit, professional and will charge an appropriate editorial fee, determined by the Government. Hai says this one-stop shop mechanism will reduce waste, which is currently rampant because the same foreign programs are being edited several times by the 47 pay television service providers. Moreover, editorial quality will be improved. Many local television channels even let their partners edit everything.
Concerns
At a recent seminar held by the ministry in HCM City to gather feedback on the draft, Arnaud de Villeneuve, deputy general director of VCTV and Canal Overseas, did not entirely agree with the proposal. He said that while the regulation is necessary, it is surprising that the Ministry of Information and Communications is both the management agency and an intermediary with commercial negotiation rights. He was worried that foreign providers would not accept this.
According to Dr. Phan Van Nho, chairman and director of Sao Nam Technological Development Co., in a profit-oriented sector like this, it is problematic to set up a non-profit provider. The representative from SCTV, the biggest provider, considered the regulation a good idea which would help eradicate unhealthy competition and, in so doing, prevent copyright fees from skyrocketing. However, the problem is that the agency may turn into a monopoly which could spell trouble for television service providers.
Nguyen Hanh deemed it beneficial to have a State agency in charge of editing foreign programs, but said Vietnam should not resort to a centralized approach to this issue. She added that the copyright fees which foreign television service providers imposed on their Vietnamese counterparts were around US$5 million, less than 10% of the total revenue of US$60-70 million. This pales in comparison with the figure for other regional countries (40%). That means local providers do not have to pay much for foreign television programs; these enterprises even enjoy an advantage which should be capitalized upon.
Truong Kieu Nga, vice director in charge of editorial matters at HTV Cable Television Center, was concerned about the feasibility of the proposal, which made it more onerous for local television providers to gain access to foreign programs, not to mention the enormous financial, technical and human resources involved in editing and negotiating copyright fees for foreign television programs. “For instance, we need to hire lawyers to write contracts and negotiate,” she said. How will a non-profit agency find sufficient resources to fulfill its tasks? Does it have the necessary equipment to receive the programs?
Hoang Quoc Khanh, a representative of the New Technology Import-Export Co., cast doubt on the amount of editing and copyright fees charged by an agency with monopoly power. He suggested settling copyright matters through an association of television service providers instead.
Some contended that the draft seemed to focus more on management than on encouraging market development. “The draft leads to numerous licenses, complicated procedures and huge costs for obtaining a foreign television program. I think it should pay more attention to the public’s right to be informed,” Professor Nguyen Van Nam, director of Nam Hung Law Co., remarked.