Southern Taiwan's Crippled Newspaper Industry

UNCLAS SECTION 01 OF 02 TAIPEI 003715

SIPDIS

DEPT PASS AIT/WASHINGTON
DEPT FOR EAP/RSP/TC, INR/EAP, EAP/PD

FROM AIT KAOHSIUNG BRANCH OFFICE

SENSITIVE

E.O. 12958: N/A
TAGS: SENV ECON TW ESTH
SUBJECT: Southern Taiwan's Crippled Newspaper Industry


1. (SBU) Summary. Over the past five years, branch offices
of national Taiwan newspapers as well as local Kaohsiung-
based newspapers have suffered financial losses that have
crippled operations in southern Taiwan. Local newspapers
have been unable to maintain any semblance of their original
ideals of "independent reporting" if they hope to survive.
End Summary.


2. (U) On August 24, 2005, Taiwan Hsin Wen Pao, a Kaohsiung-
based newspaper, went out of business after having suffered
from huge financial losses over the past decade. The paper
had an advertising revenue advantage over its two major
competitors, the Taiwan Times and the Commons Daily, both
Kaohsiung-based papers, when it was affiliated in its early
years with the then-Taiwan Provincial Government. When the
Taiwan Provincial Government was abolished in 1999, the
Executive Yuan Government Information Office took control of
the newspaper company and leased its operations to Kaohsiung
City Councilor Chang Jui-teh in 2000. Chang fled the
country after failing to win his reelection bid in 2002
because he was bankrupt and was involved in a vote-buying
scandal. According to journalist Tsui Chia-chi, the paper's
union was then put in charge and managed to sustain the
paper's operation for another two years under a policy that
stipulated that employees had to earn their salaries by
selling advertising blocks. Facing strong competition from
Apple Daily, Hsin Wen Pao finally closed its business on
August 24, 2005.


3. (SBU) Even though the Taiwan Hsin Wen Pao has ceased its
operations, the two remaining local operations, the Taiwan
Times and the Commons Daily, both far from lucrative
operations, have managed to stay afloat. The Taiwan Times
(which has no relationship with the English-language Taipei
Times, a part of the Ziyou Group) now regards itself as
independent of any political affiliation and has a stated
policy of neutral reporting. However, the paper's stated
policy does not correspond with its reality. Owned by
former Kaohsiung Mayor Wang Yu-yun's brother, Wang Yu-fa,
the publication is seen locally as a means for the Wang
family to pursue its political and business interests. The
family has suffered setbacks both in the political and
business arenas in recent years and uses the paper regularly
to criticize rivals of the family during political
campaigns. It's rumored that the Wang family has been
looking into the possibility of leasing the paper's
operations to an interested investor.


4. (SBU) According to journalist Tsui Chia-chi, who reports
on economics and social issues for the Commons Daily, the
Taiwan Times has been supported by the Wang family's major
moneymaking business, the Hua Jung Cable Company, which uses
the paper to pursue business interests for itself and its
business partners. Tsui noted that the paper, in an effort
to roll with the times, had changed its reporting policy to
embrace the ideal of an independent Taiwan since the DPP
came into power. Last September, the paper also started to
use color prints similar to the Apple Daily in an attempt to
increase its readership.


5. (SBU) Tsui also discussed with AIT/K recent developments
at The Commons Daily. Tsui said the paper began to register
profits a few months ago after having suffered from
financial losses for the past decade. According to Tsui,
the paper established a strategic alliance with ETTV News
Group after it merged with the Rebar Group two years ago.
Under the strategic alliance, the paper downsized its
editing and reporting staff to reduce personnel costs. In
addition, the paper began to cooperate with public relations
companies to sponsor public events for government agencies
in order to increase its revenue. Tsui bemoaned that the
paper no longer insists on its political stance for an
independent Taiwan nor does it insist on adhering to its
ideal for an independent press, which is the principle the
paper was founded on in early 1978. Tsui said that in order
to receive government financial support, the paper must
tailor its editorial policy to the needs of the ruling
party. Tsui also pointed out that the elections in Taiwan
have helped sustain local press to some extent because
elections have brought tremendous advertising revenue.


6. (U) The national China Times closed its editing office
in Kaohsiung three years ago as the newsgroup began to
suffer financial losses. China Times authorities also
decided not to hire any replacements in order to cut
personnel spending. China Times readership remains in
fourth place, after the Liberty Times, Apple Daily and the
United Daily.


7. (SBU) According to Tsui, the United Daily Newsgroup
launched a local weekly journal in April this year. The
journal, entitled Kaohsiung Metropolis Times is designed as
a subway paper to serve the city's commuters on the future
Kaohsiung Mass Rapid Transit System. It is being distributed
to subscribers of the United Daily News for free. According
to Tsui, the United Daily Newsgroup is using the Kaohsiung
Metropolis Times to increase its readership and advertising
revenue. Tsui estimated that the Kaohsiung Metropolis Times
would help boost the United Daily News readership by 20%
once the KMRT begins to operate.


8. (SBU) Comment. Reporters around Kaohsiung have recently
been very critical of the media's "survival politics," which
is forcing the suppression of independent reporting.
Government support or subsidy for newspapers is now
perceived by journalists as the trump card in ensuring the
ruling party's particular approach to controversial issues
gets high profile play. End comment.