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Taiwan's Media Shake-up

Next Media Gets into TV, Hires Spin Doctor


Just as his flagship Apple Daily has begun to lose money, Hong Kong media baron Jimmy Lai has boldly entered Taiwan's highly competitive cable-TV business, hiring PR veteran King Pu-tsung. What does Lai have up his sleeve?



Next Media Gets into TV, Hires Spin Doctor

By Yueh-lin Ma
From CommonWealth Magazine (vol. 416 )

During the recent Lantern Festival, Taiwan's political establishment and media circles crackled with the explosive news that King Pu-tsung, the journalism professor and former spokesman for erstwhile Taipei City mayor Ma Ying-jeou who later went on to serve as deputy mayor and also played an instrumental role in Ma's successful presidential campaign, had accepted Next Media mogul Jimmy Lai's offer to serve as the CEO of his planned TV station.

Like the firecrackers that were set off to mark the end of the Lunar New Year holiday, the announcement resonated loudly, causing an uproar. Yet King was eager to declare that he was joining hands with Lai to create a "dream TV station" with a good image and high credibility in the eyes of the public.

Why does Lai want to enter the TV business? And why is he making a big splash hiring this media mastermind just as his Apple Daily has begun to operate in the red?

Lai, known as a shrewd businessman, certainly has an agenda.

Although "Next TV" is still on the drawing board, the news that King had joined the team caused Next Media's stocks to soar on the Hong Kong stock exchange. On the day of the announcement, the share price almost doubled during the trading session, and volume exploded to nearly 115 million shares for a total turnover of HK$114 million. The group's share price had been depressed since early November last year, when Next Media lost its takeover bid for Taiwan's China Times Group to rival Tsai Eng-meng, chairman of Want Want Holdings. But the "King effect" immediately boosted the personal wealth of Lai, who holds a 74-percent stake in the media conglomerate, by almost 30 percent. Shocked by the sudden spike in turnover, the Hong Kong stock exchange demanded that Next Media announce material information to explain the share price spike.

Over the following three days, the share price returned to normal, and trading volume stabilized. Obviously, certain shareholders had seized the opportunity to play out the "King Pu-tsung card" to make a quick buck, although it is not even known yet whether the planned TV station will materialize.

Strict Cost Control

In fact, the Next Media Group has always been known for being good at doing its math.

As a metropolitan tabloid, Apple Daily is mainly sold via newsstands. When the economy began to spiral downward in the latter half of last year, advertisement revenue plummeted, and printing costs soared. With profits dwindling Lai implemented a strategy of strictly controlling distribution, to avoid "losing the price of one paper for every copy sold."

This also meant limiting the daily circulation to around 500,000 copies and keeping the return rate for unsold newspapers below 0.5 percent. Lai would rather risk having readers complain that Apple Daily was sold out than incur higher costs by boosting circulation. 

"Apple Daily began to operate in the red in September last year, a high-level Apple Daily manager, who requested anonymity, notes. "Advertisement revenue began to plummet 30 to 40 percent in August and September last year. So we strictly controlled distribution costs. If the return rate for unsold newspapers reached 20,000 copies on a certain day, we would get very nervous and would immediately review the circulation."

Working under the business-oriented Lai, how can politician–cum-journalist King ensure that the new TV station will be able to distinguish itself from the sensationalist style of Apple Daily and the tabloid weekly Next Magazine?

Before the TV station has even be established, the Taiwan branch of Next Media Animation, which has been quietly expanding over the past year, is already posing a challenge to traditional media.

Apple Daily now frequently illustrates its city news by recreating the scene of a crime, event or incident. These cartoon-like pictures have become the trademark of all Next Media publications. Lai early on had the idea of supplementing news with animated pictures and recreated news scenes. Since he liked the animation talent that he found in Taiwan, he once even poached a group of skilled animators to work for him in Hong Kong. However, the project failed because back then animation technology was not mature yet.

Computer-simulated TV News?

Next Media Animation Taiwan has been extremely low-key, although it is likely the island's second largest specialist animation company. Despite employing more than 100 R&D personnel, animators, art directors and other technical talent, the company has still not formally registered as a business. Since its founding more than a year ago, its mission has been to find out "how to apply animation very efficiently in television news."

Over the years Apple Daily and Next Magazine have accumulated a huge stockpile of images of breaking news and natural disasters, which have always been the forte of Next Media coverage. Once these photos can be turned into three-dimensional images and animated using advanced visual effects, real and virtual images can be combined. The result is bound to far exceed the visual effects that we know from current TV news production. Shih Wen-hsiang, general manger of CGCG, Taiwan's largest specialist 3D animation company, muses that in the future TV news special effects may be as realistic as Playstation 3 computer games, which would make them very attractive for a young audience.

After more than a year of honing their skills, the animators are already able to represent nearly half of every minute of TV news reporting through animated images, which means that in terms of skill, speed and capacity they are already able to meet the needs of today's daily TV news reporting. Within two hours after a news incident, animation can be used to recreate the scene. Moreover, animation applications are not restricted to breaking news. Computer simulation can be used to illustrate news in almost any field, including sports, finance and courtroom litigation.

Ready to team up with Lai for his next battle, King does not mind that his boss has preemptively interfered in the new TV station by starting to build its basic infrastructure.

"People watch TV with their gut. It's very important that they feel comfortable. I feel Lai and I agree on this point: Television is a dream. When people watch TV they hope to see something beautiful," King declared optimistically in an exclusive interview with CommonWealth Magazine.

Yet it remains to be seen how King will set the news yardstick for his TV station when it starts broadcasting in a year or so, given that Next Media is already able to do a simple, CSI-style crime scene re-creation. The businessman and the politician will still have a long way to go before the actual nature of their cooperation becomes clear. 

Translated from the Chinese by Susanne Ganz

Chinese Version: 金溥聰效應 黎智英打什麼算盤