Sun, Feb 27, 2011 - Page 8 News List

Building a digital TV environment

By York Chiou 丘岳

On Feb. 6, the National Communications Commission (NCC) accused terrestrial TV stations of airing too many reruns on their digital TV platforms. The commission also said that in the future, laws will be formulated to define the ratio of reruns to new programming, and that they might even revoke digital channel licenses and frequency spectrums.

However, it is both unfair and unhelpful to expect operators to take on the responsibility of promoting digital terrestrial TV alone. The government needs to come up with a better solution, one that involves the establishment of an environment in which every TV set is capable of receiving digital TV broadcasts.

Over the past two decades five terrestrial TV stations have invested several billion NT dollars in the promotion of digital terrestrial TV. They have established the ability to send and receive digital signals and invested large sums of money in producing digital TV programs.

In light of this outlay, it is impractical for the commission to now demand that the operators revamp programming by producing new shows to fill the 15 empty digital TV slots. The reason is simple: Newly produced TV shows lack exposure and ratings and therefore net questionable returns from commercials.

Digital terrestrial TV is characterized by a multitude of channels, high-definition content, mobile reception and interactivity. The transformation of analog to digital terrestrial television is an ongoing global trend, as TV operators are well aware. The problem lies at the -receiving end and how to ensure that digital set-top boxes achieve a commercially viable penetration rate that makes the investment profitable by generating viewer ratings that meet the demands of advertisers.

Television stations must be able to make money if they are to be persuaded to invest more money, and make more and better programs to win over viewers. However, the installation of set-top boxes cannot be handled by terrestrial TV operators alone. It requires clear and cogent government policy and decisiveness.

The government’s current solution is geared more toward subsidizing set-top boxes for low-income families and those who live in remote areas.

In the past, it has asked that TV set manufacturers build set-top boxes into televisions before they leave the factory. However, the commission’s current timetable for digital TV is to terminate the analog signal for terrestrial TV and complete the transfer to digital TV by 2013. This makes it unlikely that set-top boxes will have become universal by that date, discouraging operators from investing and stopping viewers from watching TV.

If this transpires, the government, service providers and viewers will all lose out.

The only solution to this dilemma is for the government to subsidize set-top boxes for all of Taiwan’s 7 million -subscribers. If we estimate the cost to be NT$1,500 (US$50) per household, then the overall cost would be more than NT$12 billion. While this is certainly a large sum, building a digital TV environment is an important part of national infrastructure.

Many countries have spent huge sums of money launching digital TV. Over the past two years, the US has spent US$80 per subscriber nationwide with a total budget of approximately NT$40 billion to subsidize digital set-top boxes and establish a fully digital terrestrial TV environment. Japan and European countries have also resorted to government subsidies to accomplish the task.

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