Taiwan Sets Three-Year Commitment to 50 Nets

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Taiwan's cable industry greeted the Chinese New Year
with a definitive list of the 50 channels that it will carry in the coming three years.The
final cut has been much anticipated by panregional networks, which have been negotiating
with the nation's powerful MSOs over recent months as the operators reviewed the
channels' strengths and pricing.

Overseas channels that have made it onto the list of 50
include HBO Asia, Cinemax Asia, Discovery Channel Asia, CNN International, TNT &
Cartoon Network, Japan's Jet TV, MTV Asia, Star TV's Channel V and Sony Pictures
Entertainment's AXN.

Out of the picture are Hallmark Entertainment Network, The
Kermit Channel, Star World and BBC World.

Taiwan's Government Information Office, which
regulates cable TV, finally pushed through the 50-channel limit that was established in a
1993 cable-TV law in an attempt to curb commercial wars between the country's
powerful MSOs, which also distribute and produce channels.

In the past, the large MSOs/distributors, which reach 50
percent of Taiwan's 4.5 million cable homes, would renegotiate with channels and
their rivals each year. If they failed to reach an accord, they routinely blacked out
their rivals' channels or switched channel numbers -- a practice that angered
subscribers and programmers.

The new regulations mean that the 50 selected channels will
not have to renegotiate their contracts for three years, and that their channel numbers
will be fixed.

"It gives the channels time to plan and develop.
Taiwan had been a difficult environment for them to invest in and to try to increase their
advertising sales," one Taiwanese industry observer said.

Services outside of the 50 on the list can still be seen on
the 10 to 20 additional channels that the island's 130 local operators have to fill,
but the distributors now have to forge individual agreements with the operators.

Hallmark and Kermit have been at somewhat of a disadvantage
because their local distributor, TV Time, is not one of the MSOs involved in distribution.
"TV Time is going from door to door to sell these channels to operators, and I doubt
that they would be seen in more than 5 percent of cable homes," the observer
speculated.

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