Few people in Hong Kong will miss Asia Television (ATV), which was closed down last week. But the demise of one of only two terrestrial television stations has raised some important questions, which touch on issues ranging from market size to creativity.

The fall of ATV was a lingering saga, or farce, that lasted for a long time. It had changed hands several times in past years and none of those owners were able to turn it around. Much of the blame was leveled at those owners who were said to have little knowledge of the local market and even less about managing an entertainment enterprise.

What came as a surprise were the 2015 results of ATV's dominant rival Television Broadcasts (TVB), which posted a record 36 percent decline in operating profit from a year before to HK$1 billion. The company attributed the poor performance to "a weak advertising market" resulting in a 9 percent drop in total revenue.

The outlook for 2016 has remained bleak, according to the company. It added that the market should "resume normal growth in 2017 after a period of consolidation." Meanwhile, the company is forging partnerships to establish Internet delivery channels.

While Internet channels are needed to reach younger viewers glued to their smartphones and tablets, industry experts emphasize that what matters most is the content. Having operated for decades without any real competition, TVB is widely seen to be losing its touch in producing drama series - the mainstay of the station's programming - which can command a large following in Hong Kong and in other neighboring markets.

The company has maintained that the falling ratings of its productions are the result of a shift in viewers' habits to watching programs on smartphones and computers. The question to ask is whether these habits are reversible with better programming. Judged by the growing popularity of some South Korean drama series in Hong Kong and around the region, the answer cannot be anything but a resounding yes.

Viewers are driven to the Internet in search of better programs. But there, they will not be able to find much that they can relate to. And that used to be TVB's best-known forte.

In the early years, TVB drew from the large talent pool of producers, directors, scriptwriters and artistes who had years of experience in producing Cantonese movies for the mass audience. They were attuned to the tastes of Hong Kong viewers in those days and knew exactly how to tickle their fancy.

Applying this knowledge at TVB, these dream-makers produced some of the most memorable drama series that helped shape the Hong Kong spirit and establish the city's reputation as the pop culture center of the region. There was a time when watching prime-time programs on TV was an established routine of many families, whether living in low-cost housing estates in Kwun Tong or high-class apartment blocks in Mid-Levels.

To be sure, the technical quality of those early programs was much inferior to what TVB routinely churns out these days. But those early programs were special because they talked to the audience.

It has been said that the development of the entertainment industry is severely constrained by the relatively small size of the market. But it must also be noted that there are fewer players in this market than in larger ones.

Television ads, though on the decline, still account for the largest share of total advertising spending. Even if the pie is shrinking as a result of a murky economic outlook, TVB can still try to increase its share - which it does not have to share with anyone else, at least for now - by boosting its ratings with more convincing programs that have wider appeal.

ATV's closure has understandably heightened public concern that the remaining station will lose whatever incentive there might be to improve its programs. But the fact is that ATV had not been posing any serious threat to TVB for many years. Closing it down is not going to make any difference.

TVB is racing against the Internet. In this race, TVB enjoys a distinct advantage in that it is the only studio which has the resources and needs to produce programs of wide appeal in Hong Kong. It is hoped it can recognize such a need and put its resources to good use to help Hong Kong regain its title as the regional center of pop culture and creativity.

The author is a veteran current affairs commentator.

(HK Edition 04/08/2016 page10)