TV is now the focus of the government's media reform project.
Despite the usual public denunciations--that it was a "mind-rotting" medium--from the moment it was introduced in 1962, television grabbed the attention of the Taiwanese public. Within a decade, two more stations joined Taiwan Television Enterprise (TTV), forming a triangular monopoly that was to last for nearly two more decades.
Those were the good days for those at the helm of the big three, and at first, even though intellectuals pointed out that Taiwan's TV stations were government propaganda machines, the stations prospered. But as the complaints gathered steam over a couple of decades, the monopoly was increasingly seen as an obstacle to the development of a pluralistic society. Small surprise then that the ruling Democratic Progressive Party, which came to power in 2000, has an aggressive media reform policy stipulating that the government, the military, and all political parties back out of the industry completely.
While that policy is still unfolding, it has been evolving against a backdrop of massive change. When martial law was lifted in 1987, finally allowing free speech for the first time in decades, the big three found themselves operating in a free market, which of course is another way of saying that competition had arrived. Two more broadcast stations, one of them a public non-profit station, and dozens of legalized cable channels began to muscle their way into the market, and before long, the country's cable penetration rate was pushing 80 percent and over.
"We can almost use the word 'frantic' to describe how public expectations drive the changes in the mass media ," says Chao Yi, vice chairman of the Eastern Multimedia Group, which runs a cable network. Among the examples he lists is how one of Taiwan's most widely read newspapers, the China Times, started using color plates in 1968, 14 years ahead of America's USA Today, forcing other national newspapers to do the same. Once TV arrived, he says, the industry expanded from one to three stations within a decade, altered the airing time from half a day to full-day programming, and the nation's black-and-white TV had to be thrown out for their color replacements. All three stations made a profit within a few years of launching and continued to increase their earnings for two decades.
Once cable TV became available, Chao says, "Most people's reaction was, I've got to have it." He says that technological advances, the growing openness of politics, and increased mobility all made it necessary that people stay informed, and by the end of 2003, 100 or so cable channels had snatched a 72-percent market share of advertising from the old stations.
"Just four years ago, broadcast stations were taking 60 percent of the available advertising revenue for TV, while cable stations only had 40 percent of the revenue, but we have every reason to expect that cable stations will grab 80 percent in the near future," Chao says, adding that the entire market for TV commercials totals around NT$20 billion (US$600 million) a year. "The results show that cable channels are popular, even though we feel the quality of their content could improve."
Critics, such as the Mediawatch Educational Foundation, are most concerned with the seven 24-hour news channels and the popularity of political talk shows. They say news stations opt for sensational content and overuse SNG (satellite news gathering) to boost ratings and revenues. Some argue that the island's many political talk shows are to blame for a polarized electorate.
"Lack of a clear media policy is a problem leading to more problems," says Wei Ti, assistant professor of the Tamkang University's department of mass communication. "Before 1987, the government controlled the media. After that, when martial law was lifted, the government was forced to yield control of the market to commercial interests, losing some of the positive cultural and social programming the industry once had."
The result is that the mass media is becoming better known as the "mess media"--a source of social unrest. For Wei a healthy media can only be achieved through government intervention. In defense of the media, Chao says none of the stations hoped for the confusion that rules over the industry. "Everybody is doing everything they can to survive," he says. "The root cause is structural."
One example of structural problems is that the government determines the number of cable carriers and the amount of monthly fees cable networks collect from subscribers. However, rather than keeping up with rising prices and demands by foreign channels to raise fees on renewal of contracts, Chao says the cable networks are downgrading quality by broadcasting cheaper channels with inferior content.
"Consumers get their product at a lower price," he notes, "but in the end both the network and the consumer lose." Such changes can also lead to a vicious cycle. "A slight change in ratings involves million-dollar differences in commercial revenues," Chao says. "That difference means a lot to the operators. Of course they go for sensational content to boost their ratings." Chao says the solution depends on whether the government is determined to face the problems and do the right things to end the cycle of deteriorating programming.
With the exception of public television, staying afloat is the main concern for broadcast stations. "We've been watching our profits slip since the cable stations entered the market," says David Y. Cheng, president of TTV. "The cable stations have not only dominated the market, but have also directed how news is made ... veteran stations, each of them running one channel, have little chance to compete with multi-channel cable networks."
Cheng thinks there is a solution to many of the problems plaguing Taiwan's TV industry, and he is placing his bets on digitalization, which he believes will level the playing field for both the five broadcast stations and the cable groups by forming a shared digital platform where each of the broadcast stations has at least two channels for use.
"It's unlikely that the government will reverse the current situation with an administrative ruling," he says. "Our only hope is that the five broadcast stations will form a multi-channel network that allows us to program strategically so we can provide diverse content with superior quality."
The convergence of communication, information, and telecommunication technologies are expected to revolutionize the way people watch TV. Compressed digital content will allow each broadband deliverer to carry three to six channels and transmit information both-ways. Interactive TV will be a reality. By the time the entire industry goes digital, there will be up to 600 cable channels, and up to 30 provided by five broadband broadcast stations.
But most consumers remain uncertain about the implications of technological convergence, or even just digital TV. In the hope of dispelling some of the fog, the topic was a leading theme of the first Taipei TV Festival, held last November in a collaborative effort by TTV and the Government Information Office (GIO), which oversees the media industry.
"This two-part event provided an organized venue for international buyers and sellers to trade copyrighted audio and visual products," Cheng says. Attempting to bring international standards to the industry, the event attracted more than 70 channels from more than 20 countries in America, Asia, and Europe. For four days, 271 booths gave the Taiwanese public a glimpse of what digital TV is all about and what it can do for them.
Just four months earlier, 14 digital channels run by the broadcast TV stations entered the fray, prompting sports fans to buy a set-top box to watch the Olympics. Before that, the set-top box marked the first setback in the government's effort to popularize digital TV. For traditional television sets to be able to receive digital transmissions, the set-top box is a must at the user end. Because each box came in different sizes with different specifications, confused consumers started complaining about the additional costs. As a result, the Taipei City Government demanded that the boxes be sold at a fixed price of NT$3,500 (US$110).
It was a move that slowed the digitalization process. However, after deliberating on the issue, the GIO came out in favor of the networks, announcing in November 2004 an agenda to pave the way for the advent of a digital-TV era. As of January 2006, all televisions with 29-inch and larger screens must have a built-in digital-signal receiver. The requirement applies to 21-inch and larger from 2007 and to all sizes by 2008.
Moreover, in 2010, the GIO will reclaim all analog channels currently in use, and says it will subsidize the boxes for low-income families in order to avoid a digital divide. People living in remote areas will be able to receive program signals via a shared satellite transmission. The goal is to achieve 85-percent penetration rate by the end of 2010.
"I'm confident that Taiwan stands a good chance of becoming the first country in the world to achieve a full-scale transformation from analog to digital," says Lin Chia-lung, the minister of the GIO. "While our cable coverage is dense compared with many other countries, my confidence is based on our competitive edge in the semiconductor and TFT-LCD industries. The cable network makes the transformation very easy ... We might be able to get it done before 2010."
TTV's Cheng says broadcast stations have all put in place a digital infrastructure to prepare for the new era. But Chao says cable networks will still be the major force in making the change a reality.
In addition to revising the existing three broadcasting laws, the GIO has drawn up a bill that aims to provide an incentive for the industry to create digital content. "In the digital world, content is everything," says Lin.
Lin hopes the government can invest more into content production and encourage the production industry to become independent of TV networks. Moreover, the GIO plans to establish a mechanism to reduce competition among networks. Before that happens, though, the GIO is preparing for a channel reorganization that will make it easier to classify content. The first 25 channels, for instance, will carry programming for a general audience beginning in 2005.
Meanwhile, a long-running standoff between the government and the opposition Kuomintang, over the latter's share holdings in one of the broadcast stations, has finally run its course. The 2003 revision of the broadcasting law requires that the party's shares be released before December 26, 2005. Academics, taking Britain, neighboring Japan, and South Korea as examples, suggest that all four broadcast stations be transformed into public TV and form a network with the existing public station, Public Television Service (PTS).
Lin says the government will first donate its share in Taipei-based China Television Co. to PTS, and its share in TTV will be handled at a later date. Once digitalization is complete, about one fifth to one third of the maximum of 30 broadband channels will form a public network.
Wei says the government is now positioned in such a way that it can expand the scale and power of public TV, but at the same time it must incorporate public views in its digitalization project while seeking to achieve fair resource allocation, all of which should guarantee a healthy environment for the industry. "The digital world will only be as wonderful as many hope it'll be if we know exactly what we want," he says.