US embassy cable - 05TAIPEI3715

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, Finance 
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.