The nation’s cable television industry is facing challenges with the advance of the digital television age, a media expert said.
Despite the increasing popularity of over-the-top (OTT) services, the nation has yet to see a significant migration from cable TV to OTT platforms, 21st Century Foundation deputy director Jessica Chou (周韻采) told a Cable and Satellite Broadcasting Association of Asia conference.
Citing National Communications Commission statistics, Chou said the number of cable TV subscribers rose from about 5 million in 2014 to 5.07 million in 2015 and to 5.2 million last year, reversing a slight decline between 2011 and 2013.
One of the main reasons people prefer cable TV is the low subscription fee, she said, which enables subscribers to access a basic cable service with more than 100 channels for only about US$17 per month.
The number of digital cable subscribers also rose from 257,727 in 2009 to 4.98 million last year, Chou said.
There are challenges ahead for cable TV operators, despite the increase in subscribers, she added.
The digital cable service does not attract enough subscribers to premium services, which only account for about 28 percent of digital cable subscribers, Chou said.
The majority of digital cable subscribers continue to use basic cable that costs less than US$20 per month, she said.
The problem is that the nation’s pay-TV industry, including Internet protocol television (IPTV) services, lack the necessary content and services to attract premium subscribers, Chou said, adding that this would hold back growth in cable service revenue.
Netflix shows that a successful service provider must either have mass content or must-have content, Chou said, but added that the business model could be affected by piracy.
Increasingly expensive content authorization fees would encourage more cable or IPTV operators to produce their own content, which would also protect them against piracy, she said.
About two-thirds of OTT service users are between the ages of 18 and 34, whereas a majority of cable TV subscribers are middle-aged or elderly people, Chou said.
The latter group is accustomed to watching basic cable content at fixed times, which explains why there has not been a significant migration to OTT in the short term, she said, adding that the situation explains the lack of subscribers to digital premium services.
However, the challenge for cable TV operators stems from polarized viewing habits, as the industry’s development necessitates a change to how TV channels produce content and how sponsors place advertisements, she said.
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