Cable channel operators yesterday urged the National Communications Commission (NCC) to be aware of the possible consequences of introducing a tiering system for cable TV subscriptions, adding that the policy should not be enforced at the expense of operators.
Operators issued the statement after the NCC yesterday approved a cable service subscription fee proposed by four operators in Tainan and three operators in Penghu, Kinmen and Lienchiang counties that would be introduced next year.
Four cable operators in Tainan have proposed using a tiering system to charge subscribers.
The commission approved their rates for basic channel packages that have between 22 and 24 channels, for which subscribers are to pay between NT$188 and NT$200 per month.
It also approved channel packages for between 131 and 137 channels that would cost between NT$535 and NT$590 per month.
However, the commission rejected packages that would charge between NT$388 and NT$400 per month.
“We have received the comments from the Tainan City Government about these medium-priced channel combinations. They said that the channels are not bundled in ways that are in sync with the viewing habits of local residents and neither do the prices accurately reflect the value of the channels. Meanwhile, cable operators have not reached an agreement with some of the channel operators on content authorization fees,” NCC spokesperson Weng Po-tsung (翁柏宗) said, adding that the channels in these packages generally have lower viewer ratings.
In addition to religious programming and those owned by cable system operators, the basic channel group also contains Taiwan Television, China Television Co, Chinese Television System, Formosa Television, Indigenous TV, Public Television Service and Hakka TV channels, Weng said.
Despite the lack of a medium-priced package, these operators have also put together different packages that include offshore channels, such as the BBC, HBO and the Discovery Channel.
Subscribers can choose any of these packages, which cost between NT$99 and NT$400 per month, in addition to the basic channel group rate, the commission said.
If subscribers only want one or two offshore channels from any of these packages in addition to the basic channel group, cable operators cannot refuse, the commission added.
Weng reiterated that it is not the commission’s purpose to lower the price of cable TV services.
“It is our intention that consumers can have more options and the industry can grow healthily,” he said.
Satellite Television Broadcasting Association (STBA) secretary-general May Chen (陳依玫) said that the association, whose members are channel operators, was concerned that the tiering scheme might become an evil policy, despite good intentions.
“We did not know about the schemes proposed by cable operators until we read about it in newspapers. Otherwise, we would have had no idea about the types of channels that would be included in different packages and their prices,” Chen said. “Despite being major stakeholders that would be deeply affected by the policy, we were never consulted about the major policy change. This is unacceptable.”
The association supports the tiering scheme on the condition that it should treat all parties fairly and respectfully, and allow channel operators to receive the content authorization fees they deserve.
Now that cable television systems across the nation have come close to being fully digitized, Chen said it is time to consider changing how operators and content providers divide subscription fee revenue.
Cable system operators collect 75 percent of the service fee revenue and the remaining 25 percent goes to channel operators, she said.
Cable system operators can gain additional revenue from offering broadband or other value-added services and should only charge platform access fees, she said, adding that channels as content providers should get a bigger portion of the service subscription fee than they do now.
“If this fundamental issue remains unresolved, introducing a tiering system would only hurt channels,” she said.
Chen said that channels were asked by the NCC to authorize their content to be aired by new cable operators that charge subscribers by the tiering scheme, because this would facilitate competition in the cable service market, which has been criticized for lack of competition.
“We agreed to the request and believed this would bring positive change to the market, but now cable operators that have been in the market for a long time are also allowed to use the tiering scheme to charge their customers. We fear that these operators would retaliate, because we have allowed our content to be aired by their competitors in the market,” she said, adding that the commission must monitor potential problems.
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