CASBAA Taiwan in View 2017 – Taiwan digital video still underperforming

TAIPEI, July 3, 2017 – (ACN Newswire) – A key
meeting of government officials, political leaders, industry regulators,
business heads and international and local experts in Taipei has called for
removal of investment constraints in the multichannel video industry, and
increased attention to online piracy, as the Taiwan market reshapes itself as
an all-digital (and often mobile) regional communications hub.Participants in the meeting, convened by
regional industry body CASBAA on June 22nd, heard that a major hurdle blocking
further development of the Taiwan digital video industry is the rigid
application of the “No state/No party ownership” rule prohibiting any
“government official, political party, or elected official to invest,
directly or indirectly”, in cable system operators.** The meeting heard
that the rule is interpreted to prohibit acquisition of cable equities by
companies where their corporate parents, several levels up, have even a single
share owned by a government entity.

“Because of these rigid restrictions, only
introduced in 2005, urgently needed mergers between telecom carriers
(fixed-line and mobile) and cable TV operators have proved almost
impossible,” said Christopher Slaughter, the CEO of CASBAA at the end of
the meeting.

Slaughter added that the “No state/No
party” investment rule flies in the face of global industry experience
over the past 20 years. “This is preventing Taiwan from enjoying the most
compelling aspects of the twenty-first century media revolution,” he said.

Proliferation of online piracy networks were
cited as another major problem. Representatives of start-up OTT operators
trying to market bouquets of programming to Taiwan consumers observed they
faced huge obstacles, as long as pirate networks based offshore were free to
steal the programs and distribute them for free. They warned that the
development of innovative, indigenous Taiwan programming was at risk.

Earlier points made during the packed agenda for
the 130 Taiwanese government and media-industry decision makers included lively
discussion of pay-TV pricing issues (the basic tier programming package is
tightly controlled) and the desire of the government to promote broadcast of
more Taiwan programming.

By Y/E 2017, online video in Taiwan should
attract 15% of US$120 billion in revenues accrued by TV/telecoms industry from
traditional free-to-air TV, pay-TV and OTT services, according to research
house MPA.

In the meantime, the rising level of mobile
broadband penetration in Taiwan is benefitting cable TV and IPTV operators such
as the dominant state-owned telco Chunghwa Telecom as they develop their own
local-language, multiscreen services.

No longer limited to traditional TV viewing,
Taiwan’s mobile broadband subscribers are downloading apps and logging-in to
pay-TV programming of all kinds. The largest group of OTT followers in Taiwan
are young women aged 18-34, some 42% of the total. Together with 18-34 year-old
males, almost 70% of OTT subscribers are “binge” viewers.

While the CASBAA meeting was generally upbeat,
warnings of the cost of revenue leakage (i.e. piracy) were a recurring theme.
“The hugely damaging level of content piracy is not only holding back
growth of both traditional pay-TV and innovative OTT offerings, but also the
overall economic development of Taiwan as a whole,” said John Medeiros,
Chief Policy Officer, CASBAA.

“Living with massive revenue leakage from
piracy while blocking sufficient investment in the digital economy, Taiwan is
falling behind its natural potential as a regional communications hub,”
added Slaughter.

** The island of Taiwan and its 23 million
people are served by 61 cable operators, 36 of which are controlled by five
Multi-System Operators, plus 25 smaller independent providers. As of Y/E 2016,
the five MSOs controlled 73% of Taiwanese cable subscriptions.

The CASBAA Taiwan in View event 2017 also
appreciates the generous support of the presenting sponsor, Verimatrix and
other sponsors including China Network Systems (CNS), Nagra, SES, Taiwan
Broadband Communications (TBC), Vindicia.

About CASBAA

CASBAA is the Asia Pacific region’s largest
non-profit media association, serving the multi-channel audio-visual content
creation and distribution industry. Established in 1991, CASBAA has grown with
the industry to include digital multichannel television, content, platforms,
advertising, and video delivery. Encompassing some 500 million connections
within a footprint across the region, CASBAA works to be the authoritative
voice for multichannel TV; promoting even-handed and market-friendly regulation,
IP protection and revenue growth for subscription and advertising, while
promoting global best practices. For more information, visitwww.casbaa.com