Asian Pay TV Firms Dangle in the Wind

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Evidence of financial squeezes within Asia's pay
television business has become more manifest with word of salary cuts and staff trimmings
at two organizations: program-network company China Entertainment TV (CETV) and nascent
direct-to-home platform Asia Broadcasting and Communications Network.

ABCN, a planned service targeting Thailand, Taiwan and
mainland China, recently laid off 100 employees -- one-half of its staff -- and reduced
the salaries of those that remained by between 10 percent and 50 percent, according to
company sources.

Staffers have been told that the DTH project is 'on
hold,' and that its Thai backer, United Communications Industry (UCOM), is in the
process of selling off its stake in ABCN to a management group led by one of its current
investors, Loral Corp. Despite the company's precarious situation, ABCN
representatives were still in attendance at the recent NATPE (National Association of
Television Programming Executives) show in New Orleans, discussing program deals.

Meanwhile, Robert Chua, chairman and founder of beleaguered
CETV, has pledged to keep the channel running for another month, although his remaining
staff will have to defer 50 percent of their pay.

CETV hit serious financial difficulties in December, after
a planned buyout of 80 percent of the Mandarin-language entertainment service by five
mainland Chinese companies collapsed amid rancor. China Asia TV Arts Centre, which had
pledged to take 30 percent of the buyout, failed to produce any money.

Chua made one-half of CETV's staff of 180 redundant at
the end of December, and he warned that he would close down the channel by Feb. 1 unless a
white knight stepped in. But as that date neared, Chua said the staff would be paid on a
deferred basis, and the talks that he was having with 'four or five' potential
investors had encouraged him to keep CETV going.

At the same time, Chua has opened an account with the Bank
of China into which CETV viewers can pay 'a voluntary subscription' to keep the
free-to-air channel on-air. Chua said that after CETV presenters told viewers that the
channel was in danger of closing, they had telephoned and written to its Hong Kong
headquarters with offers of cash.

Chua said he needs $US1 million per month to keep the
channel on-air. So far, the largest individual donation has been $US3,030.

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