As war clouds gather over Iraq and the world's stock markets reel, Asia's pay-TV operators are already looking beyond the military conflict - and are confidently predicting a bumper year for the industry.
While network bosses acknowledge that war could drive down adspend in the short term, they say growth in cabsat viewership and advertising simply has too much pace to be derailed. And for some channels - notably the news providers - the prospect of war offers a golden opportunity to pull in record viewership. Editorial budgets will, in many cases, need to be torn up and re-written, but the payback is unique brand reinforcement.
Up to three new pan-regional channels are tipped to launch in Asia this year, and evolving regulations in highly-coveted markets such as China are giving the networks hope of even greater opportunity for expansion.
The Cable & Satellite Broadcasting Association of Asia (Casbaa) is upbeat about the industry's fortunes, predicting 10 per cent growth in subscriber numbers in the next two years, and 35 per cent growth by 2010 - with or without a war in Iraq.
Localisation drives across music, news, documentary and general entertainment channels in the past two years have been pulling in viewers, and advertisers who have trimmed their media budgets on other media have lapped up increasingly flexible, multi-media deals being offered on pay-TV.
The year has, therefore, begun strongly for the major channels - whether news-focused or not - and they say uncertainty about the months to come has so far failed to dampen viewers' or advertisers' spirits.
Jonathan Howlett, airtime sales director for BBC World, says interest in international news, and analysis of world events, has gradually been building up in Asia as the tension in the Middle East intensifies. Sales have been similarly strong. "Uncertainty tends to be the most debilitating factor on advertising, but the market in the past few months has actually been improving and there is confidence, especially in Asia," Howlett says.
"It's starting to build back, and people at the moment are firming their plans on the possibility that there may be some action in Iraq but that when it's over, we'll return to a position of relative stability. People are still planning their lives for the summer onwards, and they're not battening down the hatches saying 'there're problems coming, let's wait til it's all over'.
"If there's military conflict, I'm sure there will be a number of advertisers who will ask to defer their advertising for a period of time ... but until that happens, there are an awful lot of advertisers - more than last year - who are just getting on with their advertising."
Mark Whitehead, vice-president of advertising sales at Discovery Networks Asia says Discovery's ratings and reach have grown as the Iraqi crisis has deepened.
"To date there's been no major impact on the advertising side. As many commentators have noted, 2002 was a difficult year for the industry, but we managed to substantially grow our revenue year-on-year," he says. "Indications we have from a strong first quarter in 2003 are that clients are once again committed to pan-regional advertising in general, and Discovery Channel in particular. We've seen strong growth in the travel, electronics and automotive sectors. That said, obviously the travel sector is one which may be significantly impacted by international developments."
If, as it looks increasingly likely, there is an attack on Iraq, the appetite for information will be insatiable, and news channels will be the first to snap up new viewers. "Clearly, the multinational news channels will presumably benefit from some increased viewing, but one of the realities for news channels in that environment is that their costs go through the roof," says Casbaa chief executive officer Simon Twiston-Davies.
CNN spokeswoman Inez Ho says its editorial war team has been ready for action since September. News networks around the world have been booking up highly expensive chunks of satellite time so they are ready to report as soon as the first missile is launched.
But while viewership soars, advertising is expected to dip when war breaks out. As Whitehead says, clients in sensitive industries - such as air travel and oil - are likely to pull their ads or be requested by news channels to put them on hold. Others across different sectors are tipped to put their wallets away until the smoke clears and they can see the global economic landscape that remains.
BBC World's Howlett says the net result for news channels will be similar to that following the September 11 terrorist attacks in 2001. "We had a great uplift in viewership, but obviously it caused some wobbles in terms of revenue. From a channel point of view the effect tended to be undeniably positive because it brought new viewers into our channel and those viewers have, to a large part, stayed. It certainly has enhanced the reputation of the channel and that's all positive going forward."
Annette Nazaroff, research director Asia-Pacific at MindShare, says the short-term expense of covering a war pays off in the longer term for news channels. "They gain their high profile by covering these major news events. This is a branding opportunity - a chance to say 'we cover it best' while it's all happening," she says.
Entertainment channels are also expecting a boost to viewer numbers should the shells start flying over Iraq.
Nazaroff says that on "big news days", news channels see a spike in ratings, but then people tire of violent images and look for something to take their minds off it.
Movie channel HBO is one of those counting on consumers seeking an alternative to war. "TV viewership as a whole tends to rise in times of crisis," says marketing communications director Caroline Wong.
"9/11 clearly illustrates that people become more homebound, travel less, spend less and will turn to traditional and safe entertainment options like television. Yes, news channels especially will see a spike in viewership, however non-news channels like HBO that give people an opportunity to escape from reality - to get away from all the doom and gloom - should perform just as well."
BBC World agrees that viewers want "light and shade". "They're not going to watch wall-to-wall Iraq for however many months it lasts," says Howlett.
"They'll still want to watch entertainment and local news as well."
Toby Hayward, whose Star Group line-up combines news, music and general entertainment, says that as long as any war is short and sharp, there will be very little impact on entertainment channels at all, whether on the viewer or advertising side.
"If the US is invading Iraq, I don't think it's going to make people cower under their beds in Hong Kong," says Hayward, who is executive vice-president, advertising sales.
"The whole war in Iraq has been trailed for so long that I think any effect (on advertisers' behaviour) has already been factored in. Unless the whole thing goes completely wrong, I don't see that the outbreak of conflict will generally make people pull their advertising."
Casbaa is similarly confident, and expects industry-wide revenue in Asia this year will near US$15 billion. Twiston-Davies forecasts a rise to $19 billion in 2005 and $31 billion five years after that. With pay-TV penetration in the region still well under levels in more developed markets like the US, there is undoubtedly ample scope for further growth, and several new channels are expected to launch this year. A 24-hour channel featuring films from the Shaw Brothers library is tipped to be among them, and both MTV and rival Channel V are rumoured to be working on new projects.
While events in the Middle East are dominating the headlines, significant developments closer to home are giving Asia's cabsat industry reason to be bullish.
In China, the region's most lucrative yet most difficult market to crack, tough regulations are slowly being relaxed to allow international channels greater access. Star's Mandarin-language Xing Kong Wei Shi entertainment channel has just been granted national landing rights for hotels and foreign compounds, having previously been licensed only for southern China.
This news came only a week after financial information channel Bloomberg Television was granted the right to make its debut on Chinese TV, an agreement that Bloomberg's Asia-Pacific distribution manager, Bill McHugh, said represented "China's acknowledgement that it is now more important than ever to follow global business developments and trends".
Twiston-Davies says the developments are a positive sign for the industry.
"If you look back three years and think of the progress in distribution since then, then look forward, you can imagine what might be achieved in the next two or three years."
CNN's Ho says the result will ultimately be more opportunities for international channels. "China is gradually opening up its media market and we're optimistic about it," she says.
In India, meanwhile, regulations on "conditional access", which will require programme encryption and set-top boxes that allow suppliers to switch off subscribers, are only just being digested by the industry.
The implications of the new rules, which are seen by some observers as simply a way for the government to drum up tax revenue, are not yet clear.
Wong of HBO says it will mean higher costs, greater competition and better quality programming. "Regulations change as a result of industries maturing and this process will weed out weaker players," she says. "We'll all need to work harder and smarter to fight for the viewer's share of mind and their checkbook as the marketplace becomes increasingly crowded. New technology will play a huge part in developing the future of the TV industry and regulations must keep up to take advantage of this."
Discovery's senior director, marketing and communications, Kevin Dickie, says that Asia-wide the signs are good, although change will not be instant.
"There have been a number of major positive developments in recent years, but there is still scope for further regulatory development in a number of key markets," he says. "With further deregulation of ownership, broadcast and advertising restrictions will come tremendous growth for the industry."
While the outlook is bright, no one is predicting across-the-board advertising rate increases this year, much as everyone would like to see their rate cards start to rise.
Howlett says prices need to be consistent if advertisers are to have confidence in media suppliers. "This isn't the year, I think, that we should be looking at hiking rates, but we have had significant increases in revenue over the last year," he says.
"This is going to be certainly a good year and what you have to do in terms of channels is continue to monitor a changing market, remain competitive, and have confidence in the product you have."
NEW PROGRAMME LINE-UP FOR 2003
Channel Title
Bloomberg Expansion of China coverage
New in-depth coverage of the financial markets
Streamlined programming as new production centre opens
New Asia-Pacific updates
Star World Fight School
TNA Wrestling
Living with Michael Jackson
Channel (V) The Rock Show
Women in Music
The Juice
Smash Hits
HBO Shrek
Training Day
The Fast and the Furious
The Pledge
Lara Croft: Tomb Raider
Enemy at the Gates
Six Feet Under
Conspiracy
Cinemax The Mothman Prophecies
Swordfish
Riverworld
Swindle
True Blue
Source: Respective channels