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Cost of set-top boxes a sticking point
DIGITAL DELAY:
The introduction of DTV to Taipei viewers has been held up by disagreement over how much customers should pay for the privilege
By Debby Wu and Annabel Lue
STAFF REPORTERS
Saturday, Jun 14, 2003, Page 2
The price of digital TV set-top descramblers has become an issue in the last few days, and the disagreement between government and industry lingered yesterday.
The Government Information Office (GIO) originally approved seven companies to provide 16 new digital TV (DTV) channels via a descrambler and it has placed a ceiling of NT$6,000 for the device, which can be paid for by monthly installments of NT$200.
The service is already up and running in Keelung and Changhua counties, but these two areas are already charging considerably less for the box.
In Taipei the service is to be launched in July and there has been heated debate over the box fee.
Two ago, the Cable TV Fee Review Committee, assembled by the Taipei City Bureau of Information, rejected the NT$5,000 suggested retail price proposed by two channel providers, Eastern Multimedia Corporation and China Network Systems, saying that the price is too high.
The committee, consisting of three Taipei City Government officials and eight industry experts, found the descrambler fee unreasonable and decided to review the matter before settling on an acceptable price. Providers can roll out the service only after receiving the green light from the committee.
Bureau Wu Yu-sheng (§d¨|ª@) said yesterday that, "the providers said production costs of the boxes are high, but what if we can find a manufacturer who can provide a box for NT$2,000? Surely we can ask these two companies to reduce the price."
Officials said that DTV operators should follow the example of Britain and the US and offer the boxes for free. In response, DTV operators said it would be difficult to bring the price down to nothing.
"Taking the cost of set-top boxes into consideration, operators can't get reasonable returns if they just give the set-top boxes away," said Judy Chiang (½±´f«F), public relations manager at China Network Systems.
The company has ties with 12 regional cable-TV system partners and has access to more than 1 million households throughout Taiwan, according to Chiang.
On June 1 the company began to offer DTV service and 16 pay channels in Keelung County. Each channel is priced at NT$50 to NT$300 per month, depending on content.
For example, music channels are NT$50, while adult channels are NT$100 and language-learning channels cost NT$300.
Agreeing Chiang, rival Eastern Multimedia Co said cable operators have invested a lot in building networks and can't afford not to charge for set-top boxes.
"The wholesale cost of each set-up box is NT$4,850 and we sell it for NT$5,000 retail," Wang Shih-ming (¤ý¥@»Ê), a senior official at Eastern Multimedia said yesterday.
The Eastern Multimedia Group has invested more than NT$1 billion in the project. Eastern Multimedia kicked off its pay DTV channels in Changhua County on May 2 and has 20,000 subscriber, Wang said.
Meanwhile, an academic said that service providers should be more generous in order to introduce the new technology.
"As most members of the public have no idea what they can watch on DTV, operators are advised to lure customers with lower prices," said Yu-Li Liu (¼B¥®«W), a professor at National Chengchi University's Department of Radio and Television.
Producing requires a long-term investment and operators should not expect to make quick money from it, Liu said.
"The migration from analog TV to DTV service is a global trend, and it needs some help from operators, government and the public to make it come true," she said.
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