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The Making of Broadcast Media Disorder:

A Political Economy Perspective

Hamilton Cheng, PhD.

Public Television Service

a Taiwan Response at CWM 2004 East Asia Region Media Mission Seminar

26th February 2004

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Taiwan TV Market Profile (1)

Population: 22.2 million

Number of TV Households: 6.1 million

Cable Penetration: 80%

Terrestrial (over-the-air) Penetration: 15-20%

Satellite Penetration: less than 0.3% (30 thousand homes at most)

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Taiwan TV Market Profile (2)

Terrestrial broadcasters 5: TTV, CTV, CTS (incl., NOU), FTV, PTS

MSOs: Easter Multimedia, China Networks System

Other Cable Operators 6

Satellite DTH: Pacific Digital Media, 3 others

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Taiwan TV Market Profile (3)TVR%: Cable 60% Terrestrial 40%

Analogy Cable Channel: Over 100

Cable Monthly Subscription Rate: US$17.40

Digital Cable (proposed in 2003): install Euro 41 STB Euro 140, monthly rent 6 deposit 42Channel: 20 PPV, each monthly Euro 3-9, only 6

Basic freeSubscribers less than 30 thousands

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Taiwan TV Market ProblemCable : Vertically Dominated PlatformBundling Strategy: between content and transmissionUnattractive Digital Bouquet (keep analogue service

intact by basic tier price)

Terrestrial:Market Failure Consideration--Economic Scale

supported by Advertising revenuesUnbalanced Scale between PSB and Commercial

Broadcasters

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What’s the origin

‘I will go back to the house I left.’ And comes and finds it vacant, cleaned orderly. He then goes out to bring along with him seven other spirits worse than himself, and they enter and live there. And the final condition of that person (place) is worse than the first. So it will be with this wicked generation. (Matthew, 13: 44-45)

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The place was vacant

Martial Law was lift in 1987

Terrestrial kept hold by Nationalist Party, Military and Bureaucracy

Cable TV got expanded island wide informally

The entry of cable channel without economic regulation--deregulation (supply control)

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Bring along withAlong cable penetration reach to its climax

Group commercial channels together

Lack of public fund pouring into and without fencing around public sphere

Over private interests oriented and cross-subsidization between systems and channels

too many channel with too few market share (0.01-5% TVR)

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Taiwan

Cable80%

Terrestrial15%

other5%

over100

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Hong Kong

Cable28%

Terrestrial70%

other2%

62

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4

62

Singapore

Cable35%

Terrestrial60%

other5%

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38

South Korea

Cable30%

Terrestrial65%

other5%

5

82

Japan

Cable31%

Terrestrial59%

other10%6

48

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The Disorder is unfoldedBasic tier relies on economy scale of ad

Driven by the advertising market--catching eye balls and sell it later

Churning out sensational, pornographic, rumor, scandal, peep-hole view

Organization competes for short-term survival rating game ignores media product

Audience without screening mechanism receive all

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Finding a solution (1)

Defensive strategy (passive)

Implement conditional access in cable

Economic control in place between supply and demand

Licensing the cable channel by quality and quantity evaluation

Enforcing the program standard steering

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Empowerment Strategy (active): Building an competitive

platform of digital terrestrial broadcasting service

Introduction to the Project of FY 2003 reengineering over-the-air broadcasting

improving reception and quality

bring quality entertainment, information, and

education together within limited channels

strengthen public service broadcasting by expansion

Finding a solution (2)

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•Digital Broadcasting Multiplex Operator in Southern Taiwan to be expanded elsewhere•Mobile Reception Broadcasting System converged audiovisual with information •Multimedia Home Platform (MHP) Production and Testing Project for digital content

Three Items of Annual Plan

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Thanks for Your Attentionand Comments