Since  the development  of a political  movement by opposition parties, principally the Democratic Progressive Party (OPP), in the early 1980s, the KMT government has been under pressure to begin relaxation of its media monopoly. Opposition leaders fought for alter­ native 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 OPP leader, fought for a 30 percent share of TTY by threatening to block a signal license renewal. Ultimately, the attempt was dropped in exchange for a goodwill promise on the part of TTY to tone down its political partisanship. Furthermore, the legislature passed a regulation in 1996 that  raised  every  terrestrial  station's  annual license fee from TWD $60,000 (approximately US $2,000) to TWD $10 million (approximately US$330,000), effective immediately.

These developments signal a passing of a television monarchy controlled by the three networks, which coincides with the emergence of the Fourth Channel, a catch-all name for all underground cable systems and channels. This Fourth Channel surfaced as a powerful media alternative in 1994 with the official launch of TYBS 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, OPP. It  is scheduled to be on air in February 1997, one year earlier than originally planned.

When the fourth channel begins programming, like the other broadcasters, it 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 ruled that foreign imports should not exceed 30 percent of the total daily programming hours, and all foreign programs are required to use either Man­ darin voice-over or Mandarin subtitles. CTS is particularly known for its effort in localizing its entertainment programming; 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 dramatic genre new to Taiwanese television, in which real-life conflicts were recreated 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 were allowed on cable after 9:00 P.M.

Such regulations are truly significant in economic terms. While 99.9 percent of the country receives broadcast television and 67 percent of homes own at least two television sets, cable has penetrated 76 per­ cent of the 5.6 million television households, according to Nielsen-SRT's second quarterly Media Index Report, released in July 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 percent of market penetration in 1991 to 50 percent in 1993 and the 76 percent of 1996 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 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 percent 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 percent 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 U.S. copyright organizations. Cable operators engaged in extreme violations of copyright laws, airing 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 on 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 financially dominated by the various government offices, they are  essentially commercial rather than public stations. In 1995, they garnered 5 percent of the total TWD$29.6 billion (US$985 million) advertising revenues, with TTY slightly edging ahead of CTS by 3 percent and CTV by 6 percent. In the same year, television advertising revenues accounted for approximately 40 percent of total advertising expenditures, topping newspapers by nearly IO percent. With significant cable growth, 90 percent of the top 300 advertisers replied in a 1995 survey that they were prepared to invest 15-20 percent of their advertising budget in cable. Essentially, the TV-advertising market has changed from a sellers' market to a buyers' 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 is expected to go to the terrestrial systems. On the other hand, TV advertising is predicted to nearly double between 1995 and 2000 to US$1.8 billion, and will almost triple to US$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 some TWD$1.592 billion (US$53 million), followed by Procter and Gamble with TWD$ 1.l03 billion (US$37 million), Toyota with TWD$ 1.005 billion (US$33.5 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, multicultural media environments in the world. In a country with a population of more than 22 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 was, in fact, launched as an attempt to use the Taiwan market as a testbed 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' Corporation announced the launch of a five-channel package in May 1996; a very popular local channel, SanLi, was preparing for the release of its third channel; the Videoland Group was getting ready for its fourth channel; and the general-interest Super Channel, which came on the scene in October 1995, 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 program ratings among viewers aged four and above have generally declined among all program genres.

On the other hand, almost every regional satellite channel and cable station has 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: (I) 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 types of programs and move among channels to do so. (3) Related to this development, a cable channel is often recognized because it carries a few popular programs. It is programs that 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. slot for the daily drama series. (5) The new television ecology has gradually given rise to new sales and marketing concepts. Program suppliers can no longer simply emphasize "how many" viewers are watching; instead, it is the determination of "who" is watching that helps deliver the audience to the advertisers, who have been obliged to follow the same trend as program-makers in tailoring their advertisements to ever-more carefully targeted niche audiences.

Behind this multi-channel, multicultural viewing environment is a series of questions baffling the policy­ makers. The seemingly vast program choices conceal the reality that programming homogeneity still outweighs its heterogeneity . Not only are schedules for the three terrestrial networks similar across all parts of the day, but the same high level of repetition is also frequently observed within and among the cable channels. The 130 cable operators have spent a great deal of money buying channels only to find that such operations are virtually the opposite of the principle of a "natural monopoly" normally used to describe the cable industry. The government, for its part, is busy making cable laws only to find that participants in the industry have invented new games that defy the regulations . While new channels continue to be rolled out on a monthly basis, new communications 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.