Taiwan Today

With the emergence of transformative content delivery technologies, the trend toward digitalization has been affecting media around the world for more than 15 years. In Taiwan, one of the earliest digital shifts came in 1995, when the China Times, one of the larger dailies in Taiwan, launched the country’s first online edition of a newspaper. Nine years later, Taiwan’s five terrestrial television stations—including four commercial stations and Taiwan Public Television Service (PTS), an independent public station—began broadcasting a total of 14 standard-definition digital channels to go with the analog signals they had been beaming across the island for decades. In May 2008, PTS launched HiHD, Taiwan’s first high definition (HD) digital TV channel, promising an even better viewing experience. Next, a few months after Apple Inc.’s iPad was launched in April 2010, Business Next and Commonwealth, Taiwan’s leading periodicals on economic affairs, became the first magazines on the island to release editions specifically tailored for reading on the popular device.

In terms of television viewing, however, TV sets today have much wider screens that are capable of displaying images at much higher resolutions than those of just 10 years ago, and programming is evolving to match. “Digital TV can provide you with richer, high-quality content that caters to your specific needs,” says Chen Ching-ho, dean of the College of Journalism and Communications at Taipei’s Shih Hsin University. Compared with traditional analog programming, digital broadcasts offer clearer images and sound. More significantly, digital TV also features interactivity, with viewer-oriented features such as pay-per-view services and a time-shifting function that allows specific programs to be viewed at one’s convenience.

The digital shift is more significant in Taiwan’s TV industry than in other media sectors, largely because TV has a higher household penetration rate than radio, newspapers or magazines. According to a 2008 report by global marketing research firm ACNielsen on media consumption in Taiwan from 1991 to 2007, in 1991 nearly 86 percent of those polled said they had watched TV on the previous day. By 2007, that figure had risen to 94.5 percent, whereas the percentage for newspapers dropped from 76.3 to 45.1 percent over the same period, magazines declined from 40.5 to 32.2 percent and radio fell from 32.6 to 24.9 percent.

Approximately 85 percent of all homes in Taiwan view TV programming delivered over cable networks. Of those networks, nearly 90 percent are capable of delivering digital signals. By May this year, however, only 8.4 percent of all cable subscribers had installed the special tuners, or set-top boxes, needed to decode such signals. In contrast, about half of the 15 percent of domestic households relying solely on terrestrial TV broadcasts had installed the equipment necessary for receiving digital signals.

“It’s faster to push the trend in the terrestrial TV sector, because it deals with a comparatively low percentage of end users,” says Su Herng, chairperson of the National Communications Commission (NCC). “And terrestrial stations have been awarded specific broadcast frequencies, which are a public resource, so they have the responsibility to work with the government to facilitate the public good.” For terrestrial TV, the NCC has set the goal of achieving full digitalization by June 2012 through measures such as subsidizing the purchase of set-top boxes for low-income households.

As for cable, the NCC hopes to see 50 percent of all cable TV subscribers gain the ability to view digital content by 2015. With that goal in mind, the Executive Yuan approved a draft of a major amendment to the Cable Radio and Television Act in March 2011. The amendment passed its first reading in the Legislative Yuan in April this year. The draft calls for making the capability to deliver digital signals a prerequisite for new cable operators entering the market and stipulates that current operators must be capable of full digitalization the next time they apply to renew their broadcast licenses, which they must do every nine years.

Domestic cable operators, however, have yet to provide much in the way of digitally recorded content. In fact, one reason many cable customers feel unmotivated to spend more money to purchase digital set-top boxes, says Chien Jen-ter, chairman of the Cable Broadband Institute in Taiwan, is because they are waiting for TV stations to offer more digitally recorded content first. Without such programming, most of Taiwan’s cable TV viewers remain content with a status quo in which they pay a monthly subscription fee of around NT$600 (US$21) for the right to watch analog TV on some 100 channels, he says.

Long-Term Optimism

Chien remains quite optimistic, however, about the TV industry’s prospects for transitioning from the analog to the digital era. “It’s natural to see slow progress at the initial stage of a trend,” he says. “Quite a few people decide to get a set-top box after witnessing the high quality of digital TV somewhere else.”

Steven Hsu, vice president of the Program Business Group of Formosa Television (FTV), also foresees a rosy future for digital TV. Two years after PTS began HD digital broadcasts in May 2008, FTV became the first privately owned terrestrial TV station to follow suit by providing US Major League Baseball games in HD. FTV does not expect to generate immediate profits from offering such content, but is committed to doing so out of the belief that it is essential to move faster than other broadcasters in Taiwan’s competitive market. For example, Hsu points out that FTV now produces 85 percent of the programs it broadcasts. “All our dramas are digitally filmed. Now FTV is going further and talking about when we can shoot them all in HD,” he adds.

While promising, digital cable TV nevertheless presents new issues for the NCC to address. “Thanks to the interactive features of set-top boxes, cable TV operators can easily access personal information such as your credit card information and viewing preferences. Privacy protection thus becomes an issue to be addressed,” the NCC’s Su Herng says.

At the same time as the government is pushing terrestrial and cable TV operators to digitalize, a new digital competitor is also emerging in the market—that of Internet Protocol TV (IPTV), which delivers digital TV content over broadband Internet connections. As for digital TV, the benefits of IPTV include time-shifted programming and multimedia on demand (MOD) services. Among IPTV broadcasters, Chunghwa Telecom Co., Taiwan’s largest telecom company, has provided MOD service to viewers since 2005. Some 10 percent of all households in Taiwan now view programming provided via Chunghwa’s MOD system. On Christmas Day in 2010, Hong Kong-based Next Media Ltd. played Santa Claus when it began handing out free set-top boxes that provide access to Next TV, a new IPTV programming option, which launched on December 28 that year. The move is seen as giving an ongoing boost to IPTV in Taiwan.

Although IPTV has yet to put significant pressure on terrestrial broadcasters and cable operators, Shih Hsin University’s Chen Ching-ho predicts that it will soon, as Taiwan is constructing more efficient and extensive broadband networks. By 2015, the government hopes to connect 6 million households to fiber-optic networks, up from 1.78 million in August 2010.

Radio broadcasters, on the other hand, face a challenging future. The ACNielsen survey shows that radio faced a 7.7 percent decline in listeners in Taiwan from 1991 to 2007. “Today, there are various other platforms that the public can turn to for entertainment and information,” explains Ma Chang-sheng, president of the Taiwan Broadcasting Company (TBC), one of the island’s longest-running radio stations. “That’s why radio has become dispensable for many.”

Although listener numbers are down, there is no shortage of radio stations in Taiwan, as the island currently has more than 160 licensed commercial radio broadcasters, plus seven non-profit government-run stations. There are also several “pirate” radio stations that broadcast without licenses. “Taiwan is a small market but has too many radio stations,” Ma says.

Phoebe Kung, secretary-general of the Commercial Radio Broadcasting Association, seconds Ma’s assessment, noting that Taiwan has one of the highest densities of radio stations in the world. Kung notes that the market could become even more crowded in the future if proposed legislation is passed that would allow the government to issue a further 155 licenses for low-power radio stations.

Kung adds that much of the proposed legislation centers around the government’s handling of the unlicensed stations, which once numbered more than 200 in Taiwan. The government started a crackdown on such stations in October 2008, forcing many to shut down or play hide-and-seek with official inspectors. The proposed legislation could bring progress on this front, however, as it would offer pirate stations a chance to obtain legal status if they bring their operations in line with government regulations.

As with television, digital broadcasting is a technically appealing option for the radio industry. In addition to improved sound quality, going digital allows radio stations to transmit on a single frequency regardless of the size of their broadcast area, whereas analog stations must use different frequencies in different locations. For those traveling by automobile, benefits include not needing to change channels to continue listening to their favorite station as well as reduced signal fading. Nevertheless, compared with the progress that Taiwan’s TV industry has made in going digital, Ma says that radio faces a more challenging road. “The government only cares about the development of the TV industry,” he says. “It doesn’t have a serious attitude about the digitalization of the radio sector.”

Delayed Digitalization

The government did attempt to promote digital radio about 10 years ago, however, by releasing frequencies for digital broadcasting. TBC and five other commercial radio stations expressed interest in the concept and some actually began purchasing transmission facilities, but only one station in Taiwan—Super FM—currently broadcasts digitally.

The main reason analog radio broadcasting still dominates in Taiwan is that listeners do not see much of an incentive to buy digital receivers. “If you want to listen to digital broadcasting on your home radio or car radio, you have to buy a totally new unit. Few people feel the need to do so,” Ma says.

Yet despite the declining number of listeners and lack of progress in digitalization, several factors make radio broadcasting unlikely to become extinct in Taiwan anytime soon. Radio is a great companion for drivers, for example, and also plays a vital role in providing news when a major disaster occurs. “Most scholars specializing in this area believe that it won’t disappear,” Phoebe Kung says. “The key for radio stations is to create their own niche markets by sticking to producing content in their respective regions with rich local color.”

Meanwhile, Taiwan’s print media faces one of the toughest battles of all. With a 32.2 percent drop in readership, newspaper consumption declined more than that for any other form of media in Taiwan between 1991 and 2007, the ACNielsen survey shows. Cheng Feng-ming, formerly an executive for the China Times, says that “the age of newspaper readers is growing older year after year, while young people know they can easily access online news portals anytime and read categorized and real-time news stories for free.”

Instead of fighting the online onslaught, most domestic newspapers now publish online editions. Several have shifted entirely to a digital format including the Central Daily News and Taiwan Daily, both of which went electronic in 2006. The Taiwan News, once one of Taiwan’s three printed English-language newspapers, became available only online in September 2010. “It’s possible that all printed papers will give way to digital ones in the future,” says Lin Shen-feng, chairman of the Taipei Newspapers Association.

It is less expensive to publish electronic newspapers than print versions, but generating revenue from online editions remains a huge challenge for the industry worldwide, Lin notes. He points out the fact that the number of visitors to the website of the British newspaper The Times dropped by nearly 90 percent after it began charging readers for online access in July 2010. “No [general-interest] newspaper in Taiwan dares to charge readers for access to daily news in its electronic edition, which would likely scare off most of its online readers and further reduce its influence,” Lin says.

The news is not all bleak for Taiwan’s newspaper sector, however, as a few continue to do well. “Special-interest newspapers like the Economic Daily News and Commercial Times targeting the business circle still make profits,” Lin says. Meanwhile, at the other end of the newspaper publishing spectrum, the Apple Daily is also thriving. Owned by Next Media, the Apple Daily made its debut in Taiwan in 2003 and soon became one of the top two printed newspapers on the island in terms of reader numbers. Its rise has not been without controversy, however, as the paper has gained a reputation for tabloid-style, provocative stories that are sometimes accompanied by over-the-top graphics.

Taiwan’s newest newspaper is the Want Daily, which hit the market in August 2009. Owned by the China Times Group, the Want Daily is attempting to carve out a niche in the market by focusing on news about cross-strait affairs, which have drawn increasing attention since Taiwan and mainland China stepped up interactions in 2008.

The magazine sector has also been affected by the growing amount of information that can be found online, but its 8.3 percent drop in readers from 1991 to 2007 was much smaller than that of the newspaper industry. According to Lin, the main reason magazines have been able to retain more readers is that they cater to groups with long-established special interests.

In terms of overall number of titles, although Taiwan saw 23 magazines fold in 2010, around 50 new ones made their debut, according to the Magazine Business Association of Taipei. Today, about 600 locally produced magazines are sold at retail outlets on the island. Sales leaders include Business Weekly and Next Magazine, another product released by Next Media.

Taiwan’s magazines have also had an easier time than newspapers in getting readers to pay for digital content, although publishers earn much less by selling electronic editions than they do for print copies. Some local magazines publish digital editions in-house, while others do so through online platforms such as MagV, a local magazine portal that emerged in 2007 and now sells more than 270 periodicals. Digital issues are available from MagV for just NT$99 (US$3.40) per month, although subscribers can access only past issues that are no longer on retailers’ shelves.

Despite increased distribution through outlets such as MagV, digital magazines have yet to really take off. “At present, e-magazines are still far from popular in Taiwan, partly because readers don’t find them so different from print versions,” says Yu Kuo-ting, chairman of the Magazine Business Association of Taipei. Yu cites the electronic version of Sports Illustrated of the United States as a good model for Taiwanese publishers to follow. “Its video and audio features offer in-depth extensions of the stories in the actual magazine, giving sports fans a lot of extra enticements,” he explains. Yu remains bullish about the future of e-magazines in Taiwan, however, pointing out that the field is just beginning to develop.

With the exception of slow progress in the radio sector, Taiwan’s media landscape is changing rapidly as the pace of digitalization increases. While the newspaper industry faces daunting challenges, magazines are finding increasing success in earning revenues from digital editions. As for TV, the government has established a timeline leading to full conversion, but cable viewers are waiting for more digital content before wholly embracing the format. Technological progress is inevitable, however. Going forward, it appears that the successful media outlets of the future will be those that can realize the full power of the digital medium.

State of the Media: Q & A with GIO Minister Philip Yang

In May this year, Philip Y.M. Yang, 47, was named minister of the Government Information Office (GIO), the Cabinet-level agency in charge of making policy for and assisting Taiwan’s media, among other responsibilities. Yang received a bachelor’s degree in political science from National Taiwan University (NTU) in 1986 and earned a master’s degree from NTU in international relations in 1988. In 1996 he received a Ph.D. in international law and international organizations from the University of Virginia and began teaching political science at NTU later that year. From 2008 to 2010, Yang served as a senior advisor to the president at the National Security Council. Taiwan Review interviewed the newly appointed official about the state of the island’s media industry.

Taiwan Review: Taiwan’s media sector is developing vibrantly and enjoys a high level of press freedom. On the other hand, it also invites criticism. What’s your overall view of the media in Taiwan?

Yang: The Republic of China is a nation of press freedom. The fierce competition in the free market, however, makes the media care very much about its ratings or number of readers. Many media outlets, therefore, try to attract attention by creating topics and reporting in a saucy, lurid and gossipy style. This is especially true with electronic media such as TV, which even broadcasts such content during prime time in order to keep viewers tuned in. Similarly, when the media carries news about politics, it’s interested only in covering political conflicts.

That said, today it’s impossible for the government to interfere with the media’s practices. There’s no going back to the old days when news was censored and freedom of speech was limited. At most, the GIO now plays the role of calling for the media to discipline itself, follow professional standards and provide the public with authentic news content. In addition, I hope private organizations like NGOs can do a good job as watchdogs working together to improve the quality of Taiwan’s media.

TR: What kind of role do you expect Taiwan’s media to play? Can you talk more about the areas in which you think they should improve?

Yang: I think Taiwan’s news programs should provide more news with uplifting content. That is, they should enable viewers to relate to and identify with their society by, for example, doing community reports, as well as by discussing policy and its implementation at all levels of government. The central government is quite serious about promoting this—we actively let the public know what we’re doing and often ask officials to explain government policies on TV.

Taiwan’s media also are inadequate in their reporting on international news. I’m not talking about translations of news stories plus a few photos provided by international news agencies. Instead, we need to analyze international events and trends ourselves and tell the public about the influence of those trends on Taiwan. We need to connect Taiwan to East Asia and the world. Covering a larger proportion of international news would move us one step forward in this direction.

At the same time, Taiwan needs more investigative reporting. You know, ProPublica [a non-profit organization based in New York City] recently became the first online news source to win a Pulitzer Prize for investigative reporting. They give their investigative reports to other media for reference. Taiwan should found such an organization and launch awards encouraging people to devote themselves to in-depth international news as well as investigative news reporting, which would enhance the public’s sense of belonging to the global village.

TR: Taiwan’s mass media is going digital. What is the GIO doing to facilitate this major transition in the industry?

Yang: With the rising cost of paper and the growing trend of digitalization, the print media has been declining year after year. In response, since 2004 the GIO has been awarding subsidies to publishers to defray the cost of shifting from analog to digital texts. The subsidies are worth up to NT$1 million [US$34,000] in each case for as many as eight specific projects proposed by publishers each year. Those projects have included things like launches of e-magazines, animated picture books and creation of digital reference archives for Taiwan’s birds.

Another important move came in 2007, when the Golden Tripod Award for Digital Publications was launched. The most recent step came in 2010, when the GIO began funding projects designed to help traditional print media operators go digital. In those projects, individual consultants or businesses that have expertise in digital publishing teach those that lack it. Each provider is entitled to receive a subsidy of a maximum of NT$6 million [US$206,900] for teaching at least 15 businesses in the traditional print media sector.

Since 2007, the GIO has also carried out a project that provides subsidies for TV programs filmed in high definition [HD]. This year NT$140 million [US$4.8 million] has been earmarked for HD programs including 55 drama series and 31 documentaries.

—Oscar Chung

Write to Oscar Chung at oscar@mail.gio.gov.tw