Wed, Feb 15, 2012 - Page 8 News List

TV companies have to plan ahead

By Cheng Tzu-leong 鄭自隆

The National Communications Commission has indicated it will issue two licenses for broadcasting high-definition (HD) content. Operators will be able to bid for the licenses, one of which will be for a commercial channel, the other for a public channel. The commercial channel will be able to broadcast ads, but not the latter, which is to focus on educational, health-related, cultural, theatrical and news programming. However, it will be able to accept funding.

Terrestrial TV will switch to digital on July 1, at which point the current number of terrestrial channels, five, will increase to 16. Cable TV will not make the switch until 2014 and if this process is not regulated or a ceiling is not placed on the number of licenses issued, the number of cable TV channels could jump to 500. This could become a problem, both because of the struggling economy and because young people already spend far more time on the Internet than they do watching TV.

We are unlikely to see much growth in TV advertising and NT$50 billion (US$1.7 billion) a year for TV advertising is clearly insufficient to support 500 channels.

Both licenses are for broadcasting in HD, which raises technological issues. Forgetting for a minute the prohibitive costs of producing HD content or purchasing HD productions, there is the technology threshold to consider. HD broadcasts require the correct equipment at both the broadcast end as well as the reception end.

At the moment, the cable TV system is in standard definition. Eighty-five percent of people in Taiwan are unable to receive HD content through the cable system and the other 15 percent do not have cable at all. Also, people in remote areas or low-income households probably still use the older cathode-ray-tube sets. What percentage of these people can afford HD? How can any policy fail to take people in the lower socioeconomic strata into account?

The notion of another public TV station forbidden from broadcasting ads is also laughable. It is creating yet another Public Television Service. One could be forgiven for suspecting some political agenda behind this policy thinking, tailored to specific corporate interests.

Television policy has implications for society and culture. It has to be well thought through. As these licenses will come under a second single-frequency network, it would make sense to allocate them to existing terrestrial TV providers — allowing them to bolster their channels and establish a “terrestrial TV street.”

If they are given to cable providers, it would mean the public would be obliged to pay NT$600 a month to these companies, the vast majority of which are foreign companies without a stake in Taiwan, who will just send the money overseas.

Giving the licenses to the highest bidder is one way to do it. A better way would be to think the policy through.

According to research on viewing habits, Taiwanese generally watch about 10 channels, which have already established a “terrestrial TV street.”

Four of the privately run channels share programming between them, offering a channel featuring news, business, education and arts, movies and sports, as well as a joint HD channel. They have also taken into account popular satellite TV programming, such as HBO, and broadcast them on the terrestrial channels. There are also about 20 family channels catering to most needs, which can be watched for free.

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