An anonymous 4A agency source said Next Media decided to leave Taiwan purely for financial reasons and not because of Taiwan-China politics. The real reason stemmed from Next Media's investment in cable TV three years ago — subscriptions were poor and the investment was too big, which ate into revenues from its print media.
Robert Hsieh, CEO of ZenithOptimedia Taiwan told Campaign Asia-Pacific: "It’s big news for the media industry."
He pointed out that Next Magazine has the largest circulation of all magazines in Taiwan. Next Magazine was launched in Taiwan in 2001, and Apple Daily in 2003. "Both are definitely leaders in the newspaper and magazine segment in Taiwan for many years," he said, citing the latest circulation figures for Next Magazine as 120,000 copies, with 500,000 copies for Apple Daily.
Hsieh said he had heard rumours that Lai wanted to sell all of his Taiwan media (including Next TV, Next Magazine and Apple Daily ) around May, after Next Media lost around US$342 million from its TV investments.
Next TV failed to penetrate the local TV market due to an inability to forge partnerships with the 51 local system operators in Taiwan, which boycotted his programmes.
In May, Lai indicated his intentions to sell Next Media Taiwan, but there were no buyers. Recently, rumours emerged of a bid by Fubon Group founder Tsai Wan-tsai, who holds one-third of the market share of the local system operators.
Since then, the buyout has experienced a number of twists and turns. On 4 October, Cassian Cheung (張嘉聲), Next Media Group executive director, said in a written statement that Next Media and Era Television (年代電視) chairman Lien Tai-sheng (練台生) had signed a letter of intent, in which Next Media agreed to sell all its shares in Next TV to ERA for US$48 million.
However, on 16 October local news reported that Chinatrust Charity Foundation chairman (中信慈善基金) Jeffrey Koo Jr (辜仲諒) had invited William Wong (王文淵), chairman of Formosa Plastics Group (FPG, 台塑集團) and a Singapore-based private equity fund to jointly bid for Apple Daily, Next Magazine and Next TV (壹電視) for US$600 million. Lai faces a penalty for breaking the MOU with Era TV, it was reported.
Hsieh believes that Next TV had refreshed the Taiwan TV market; all its equipment is state-of-the-art, it had hired many high quality journalists from its competitors, and introduced animated and high-resolution news, variety and drama programmes. This is good news for everyone — the audience, the employees and advertisers — especially when TV viewership in Taiwan is declining by five per cent every year, he said.
Sean Chang, managing director/partner of 3-in-1 Advertising (石意廣告) said that many people believe that Lai had been too optimistic in moving into TV. "It ended up with TV becoming a black hole burning lots of the money that other media in the group could have made, not to mention that Apple Daily and Next Magazine’s sales were falling in the past few years," he said.
What is the impact of Lai's departure after 12 years on the advertisers and media agencies in Taiwan?
Hsieh pointed out that unlike other Taiwan media, it is very difficult to influence Lai's editorial direction, while his paparazzi were very annoying to celebrities, but good for readership. He added that if the new owners change the management style it would be to more like other media in Taiwan.
Chang does not think there will be any big impact on advertisers and agencies, as there are many alternatives. "Lai is pulling out of the Taiwan market, but Next Media may still remain, since we do not know if the new owner wants to keep everything the same, including the names and the style of each medium."
He does not think the move will have too much of an impact on the advertising industry, adding that most did not see Next Media as introducing innovative media or new media solutions.
"Instead, they just overthrew the way of reporting news. They brought in 'tabloidised' news reporting. They were wild and outspoken, but not necessarily innovative or helpful in media development. In order to compete with them, most of the media began transforming into a paparazzi type of culture," Chang added.
On the business side, Chang said Next Media gave advertisers a great choice for a high-readership medium, regardless of whether the content was suitable or not.
"I don't know how the management style will change after the sale," an anonymous 4A agency head said. "I care because Next Media is pretty political neutral and they play a role of exposing the dark side of the government and corporates. Nobody did the job as hard as they did. Agencies do really care in terms of media placement."
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