The birth of the television era in Taiwan began when China Broadcasting Corporation (CBC) brought the Presidential Inauguration live to 50 television screens in May of 1960. This event also began the extensive political influence of the three terrestrial broadcasting systems on all facets of life in the country. Taiwan Television Enterprise (TTV), the first network, was established in 1962 with a significant transfer of Japanese expertise and an initial 40% investment by the four leading Japanese electronic firms. China Television Company (CTV) was launched with exclusively domestic financing in 1969, and Chinese Television System (CTS) was transformed from an educational to a general broadcasting service in 1971. Two and a half decades later, these three networks remain dominated by their stockholders which are, respectively, the Taiwan Provincial Government, the political party Kuomintang, and the Ministries of Defense and Education. Ideological control, exercised by these major underwriters, remains apparent in both news and entertainment programming. In order to claim its political legitimacy over local Taiwanese politics, for example, the KMT government pronounced Mandarin as the official language in Taiwan end restricted the use of Fukienese to only 20% of television programming, despite the fact that it was used by the vast majority of the population in the 1960s.

Since the development of a political movement by the opposition party in the early 1980s, the KMT government has been under pressure to begin relaxation of its media monopoly. Opposition leaders fought for alternative voices with a massive wave of print media publications, followed by the creation of numerous underground radio broadcasting stations. Government crackdown on these activities proved ineffective when many opposition party members were voted into the Legislature and the movement was backed by a significant number of intellectuals. In 1995, the Taipei City Government, headed by a renowned Democratic Progress Party (DPP) leader, fought for a 30% share of TTV by threatening to block a signal license renewal. Ultimately, the attempt was dropped in exchange for a good-will promise on the part of TTV to tone down its political partisanship. Furthermore, the Legislature passed a regulation in 1996 which raises every terrestrial station's annual license fee from NT $60,000 to NT $10 million (exchange rate USD=NT $27.5) effective immediately.

All these recent developments signal a passing of a television monarchy controlled by the three networks, which coincides with the emergence of the Fourth Channel, an abbreviated name for all the underground cable systems and channels. This Fourth Channel surfaced as a powerful media alternative in 1994 with the official launch of TVBS and its landmark call-in program 2100 All Citizens Talk. A fourth official national television network is also in development, its license granted to People's Broadcasting Corporation, which consists largely of supporters of the opposition party, DPP. It is scheduled to be on air in February of 1997, one year earlier than originally planned.

When the fourth channel begins programming it, like the other broadcasters, will turn to one of three types of sources for content: internal production by the networks, contracted domestic production by independent production companies, and foreign imports. The Government rules that foreign imports should not exceed 30% of the total daily programming hours and all foreign programs are required to use either Chinese voice-over or Chinese subtitles. CTS is particularly known for its effort in "localizing" its entertainment programming and the network wrote television history in 1994 when it first mixed Mandarin with Fukienese in its 8:00 P.M. prime-time drama series, When Brothers Meet. Instead of the never-ending Romeo and Juliet-style of love and hate romance, this program established a brand new drama genre in which real-life conflicts were re-created in the context of real-life societal events. When Brothers Meet not only took the lead in the television prime-time ratings, it also began a continuing success in television drama for CTS.

With the exception of news, all television programs are subject to review by the Government Information Office (GIO). Even in newsrooms, however, self-censorship is practiced. Commercial air time--advertising--is limited to ten minutes per hour on terrestrial systems. Cable systems are limited to six minutes per hour and coalition efforts are underway for some regional satellite broadcasters to unite in protesting the government's preferential treatment of the free-to-air terrestrials. In other areas, however, cable has its own advantages. Cigarette and liquor commercials are barred from free-to-air stations, yet in 1996 commercials for liquor have been allowed on cable after 9:00 P.M.

Such regulations are truly significant in economic terms. While 99.9% of the country receives broadcast television and 67% of the homes own at least two television sets, cable has penetrated 76% of the 5.6 million television households, according to Nielsen-SRT's second quarterly Media Index Report released in July of 1996. It is receivable in over 4.4 million homes and since 1994, the channel share of all cable stations has surpassed the combined share of the three terrestrial systems. As of June 1996, cable homes or cable individuals spent two-thirds of their viewing time with cable. Certainly, the phenomenal cable growth in Taiwan from 18% of market penetration in 1991 to 50% in 1993 and the current 76% coincides with the economic well-being of the country.

Not surprisingly, the cable industry has been considered a highly lucrative market by both domestic and foreign investors. The Cable Law, however, passed in August of 1993, explicitly outlawed foreign shareholding. Cross-media ownership is disallowed between newspaper owners, free-to-air broadcasters, and cable operators and programmers. Further regulations restrict any shareholder to no more than 10% of the total assets value.

Other regulations focus more precisely on cable systems. In the area of programming, for example, domestically produced programs must represent at least 20% of the total programming hours. Nevertheless, in light of the fact that the Cable Law is designed exclusively to bring the system operators under control, cable programmers have often tested the limit of the Law and frequently go their own way. The constant power struggles between system operators and cable program suppliers have left the GIO powerless most of the time.

In one area, however, the cable industry finally came under restriction in the fall of 1994 after severe protests by the U.S. copyright organizations. Cable operators engaged in extreme violations of copyright laws, airing literally everything from movies to sitcoms and variety shows without payment, which resulted in substantial revenue loss to the program copyright owners. Under threat from the U.S. government, authorities in Taiwan finally began an all-out effort to crack down the illegal cable operators. The resulting rising costs for program purchases drove some operators out of business and contributed to a significant consolidation of cable systems in recent years.

Financial concerns also affect the terrestrial systems. Despite the fact that all three are all financially dominated by the different government offices, they are essentially commercial rather than public stations. In 1995, they garnered 5% of the total NT $29.6 billion (or U.S. $1.1 billion) advertising revenues, with TTV slightly edging ahead of CTS by 3% and CTV by 6%. In the same year, television advertising revenues accounted for approximately 40% of the total advertising expenditures, topping newspapers by nearly 10%. With the significant cable growth, 90% of the top 300 advertisers replied in a 1995 survey that they were prepared to invest 15-20% of their advertising dollars in cable.

Essentially, the TV-advertising market has changed from a seller's market to a buyer's market. The three terrestrial networks are predicted to lose a quarter of net television advertising to other channels in 1997 and by 2005, less than half the net total will go to the terrestrial systems. On the other hand, TV advertising is predicted to nearly double between 1995 and 2000 to U.S. $1.8 billion, and will almost triple to U.S. $2.7 billion in 2005. International advertisers dominate the top 20 list of largest advertisers in Taiwan. Ford leads the category with total annual billings of NT $1,592 million, followed by Proctor & Gamble with NT $1.103 million, Toyota with NT $1,005 million and Mavibel, Kao, Matsushita, Hong Kong Shanghai Bank, AC Johnson, and Nestle among the biggest spenders.

These advertisers present their products in one of the most complex, multi-cultural media environments in the world. In a country with a population of 21 million, more than 180 satellite channels and 130 cable operators compete for audiences. A typical cable household receives 70 channels, all as part of the basic tier. In the movie category alone, more than 12 channels show movies originating from the United States, Spain, France, Italy, the United Kingdom, Russia, Japan, China, Hong Kong, and other countries.

In the face of this 70-channel environment, all regional satellite channels have made "channel localization" an integral part of their programming effort. They have created specific channel "identities" related to specific Asian countries and regions. Such localization has gone beyond the use of specific languages and has led regional broadcasters to produce "locally correct" cable content by teaming up with the local production entities or houses in the various Asian countries. The Discovery Channel, HBO, ESPN, MTV, and Disney are all prime examples of entities competing against these local cable channels and their localized content. Much of the programming effort by these "global" suppliers is in fact launched as an attempt to use the Taiwan market as a test for eventual programming in China.

The influx of new local and international cable channels is far from over. For every type of channel already in place, another is in formation. The Scholars' Corp. announced the launch of a 5-channel package in May of 1996; a very popular local channel SanLi is preparing for the release of its third channel; the Videoland Group is getting ready for its fourth channel; and the general-interest Super Channel, which came on the scene as late as October 1995, has added another channel devoted to sports.

The cable attraction has resulted in a large decline of viewership on the three terrestrial networks. Even the 7:00-8:00 P.M. news hour on the networks, dominant for almost three decades, is losing audience share to cable. Individual ratings among all viewers age four and above have generally declined among all program genres.

On the other hand, almost all regional satellite channels and cable stations have steadily gained viewership and momentum. Cable's niche programming orientation has led to the creation of many channels with clearly definable audience profiles. When analyzed within target audiences, some cable channel ratings even surpass those of the three networks. The current television climate may be summarized as follows: (1) A typical viewer spends an average of 2.2 hours daily watching television. Individuals with cable spend more time watching television than their non-cable counterparts. (2) "Program loyalty" has replaced "channel loyalty" in describing the viewer's logic of television choice. Viewers select specific programs and move among channels to do so. (3) Related to this development, a cable channel is recognized oftentimes because it carries a few popular programs. It is "programs" which define the character of any channel, not the channel itself, even for the 24-hour news channel. (4) Prime time on cable is virtually 23 hours a day; the only hour excluded is the 8:00-9:00 P.M. daily drama series time. (5) The new television ecology has gradually given rise to new sales and marketing concepts. Program suppliers can no longer emphasize the reality of "how many" viewers are watching; instead, it is the determination of "who" is watching that helps deliver the audience to the advertiser.

Behind this multi-channel, multi-cultural viewing environment is a series of questions baffling the policy-makers. The seemingly vast program choice conceals the reality that programming homogeneity still outweighs its heterogeneity. Not only are schedules for the three terrestrial networks similar across all dayparts, the same high level of repetition is also frequently observed within each cable channel and among channels. One hundred and thirty cable operators spend a great deal of money to buy channels only to find that such operations are virtually the opposite of the principle of "natural monopoly" normally used to describe the cable industry. The government is busy making cable laws only to find that participants in the industry have invented new games which defy the regulations. While new channels continue to be rolled out on a monthly basis, new communication technologies such as the Internet are aggressively pursued and applied by many programmers to add to their marketing effort and competitive edge. The television market in Taiwan is far from saturated. It is instead loaded--with selection, repetition, excitement, energy, and challenges.

-Zoe Tan