A New Wave in Audiovisual Entertainment--Chunghwa Telecom's MOD Service Begins Broadcasting

With the promise of allowingviewers to freely choose what to watch and when, Chunghwa Telecom's multimedia-on-demand (MOD) services have made their official debut. In addition to driving the convergence of telecommunications and television, MOD services are being closely followed to see if they change the viewing habits of the Taiwanese public, as well as being seen as a barometer for the digitization of audiovisual content.

After several years of trials and application for an operator's license, Chunghwa Telecom (CHT) initiated multimedia-on-demand (MOD) services on March 3 in Taipei County and Keelung City, marking its formal entry into the business of delivering digital TV programming.

These services include two components: television channels, and video-on-demand. In the initial phase, the service will provide the content of Taiwan's five free-to-air television stations, including TTV and CTV, along with more than ten basic channels such as Hakka TV, CTS's educational channel, Da-Ai TV, BLTV, Australia's ABC, and news, sport, drama and variety shows produced by CTS. CHT will also negotiate with broadcasters such as ETTV, Era, and USTV to produce and broadcast program content different from that currently available on cable channels. The video-on-demand service will offer televised educational programs, real-time lifestyle information, stock prices, travel information, shopping, and popular movies. Users will be able to take advantage of multimedia interactivity and digital features to purchase different sets of channels according to personal preferences and needs, as well as to fast forward, rewind, and pause during broadcasts to gain control over the viewing experience.

CHT's MOD services will utilize the company's ADSL lines, with a set-top box (a signal converter that turns digital signals into traditional analog signals) installed to enable customers to receive programming. According to the fee schedules set by Taipei County's Cable TV Fee Review Committee, the cost of accessing basic channels will be NT$150 per month. If other channels are selected, an additional charge will apply. However, the total may not exceed the current maximum for cable television fees of NT$600. As for video services, users wishing to view other movies or videos will be charged extra for these.

In order to attract users to sign up, CHT is offering the first six months of basic channels and installation free, with a charge of just NT$75 per month for basic channels in the second half-year. When the broadcasts began on March 3, there were more than 22,000 users.

With the rise of the Internet and the digitization of audiovisual content, technologies that were originally developed for the two different forms of transmission for video and telecommunications are using digital signal convergence to enable families to enjoy the interactive pleasures of video-on-demand through set-top boxes.

Looking at the world as a whole, the spread of digital content is an unmistakable trend. Still, at present the cost of digital television sets remains high (from NT$70,000 to NT$240,000), and with most of Taiwan's TV channels still using analog signals, it appears that many consumers purchase an LCD television mainly because its flashy appearance and super-thin screen fit in well with the decor in their homes. However, in view of the decision in the US to convert all conventional television broadcasts to digital systems by 2006, digital interactive television services have already become an unstoppable technological trend.

It is expected that interactive services will change the public's passive TV viewing habits, shifting them toward active choice and control over viewing times. They are also likely to allow audiences to pay for programming according to what they wish to watch. However, the key to success is that the content delivered must be varied and extensive.

Currently, CHT's roster of MOD services is somewhat thin. Moreover, its charge scheme, in which there is a fee for basic channels plus pay-per-view charges, may result in customers having to pay more than they do for cable television at present. It is an open question whether consumers who are highly cost-conscious and already accustomed to paying just once to have access to more 100 channels will be willing to change their viewing habits.

Quite a few cable TV operators note that although CHT's current customer base of 20,000-plus for its MOD services does not yet amount to a threat, should it use its enormous financial muscle by shifting resources into buying channels, this would inevitably impact the state of the cable TV market. Therefore, cable TV operators are also aggressively seeking entry into the MOD business. Whether the entry of cross-industry operators and the subsequent market competition will give customers better service quality and programming content remains to be seen.

CHT chairman Ho Cheng-tan stated that the company would use its multimedia platform to add content produced by domestic audiovisual content providers to its roster of offerings. In this scheme, content providers decide on content and prices based on viewer response, with CHT collecting fees and distributing a share back to the vendors. Through this approach, not only can local creative professionals be encouraged to concentrate on content development, but they no longer need be restricted to current means for getting their programming broadcast. Consumers, meanwhile, will be able to obtain new content that differs from what they have had in the past, allowing all three parties to win.