Low investment and lax regulation threaten the long-term survival of the domestic television industry.

In January, the celebrated Taiwanese talk show Here Comes Kangxi went off the air after 12 seasons. Driven by the witty banter between hosts Dee Hsu (“Little S”) and Kevin Tsai, the program was one of the most popular talk shows in Taiwan during its time on the air. It had more than a million Facebook fans and won numerous Golden Bell Awards – the Taiwanese Emmys. Here Comes Kangxi also gained a strong following in China and Hong Kong over the years, making its hosts household names throughout Greater China.

Twelve seasons is a long time for any television program, but there’s more to the show going off the air than that timespan. It’s the latest chapter in the long-term decline of Taiwan’s television sector, which has been steadily losing its producers, hosts, actors, and viewers – in many cases to China. “There’s a bit of a brain drain occurring,” says Ming-Yeh Rawnsley, a professor at the Centre of Taiwan Studies at London’s School of Oriental and Asian Studies (SOAS). The trend dates to the early 2000s, but has accelerated in recent years, she adds.

In October 2015, Taiwanese media reported that China’s Hunan TV had plans to make Kevin Tsai a top host at the station, for whom he was co-hosting the talk show U Can Bibi. Tsai reportedly is paid NT$20 million to host two episodes a week. As a result, he can earn more in one season working for Hunan TV than he did in a dozen years hosting Here Comes Kangxi.

Meanwhile, Dee Hsu also is launching a career in mainland China. In July, she began a hybrid cooking-talk show called Big Sister is Hungry (姐姐好餓), which airs online.

“China is providing much better opportunities these days for people in the television industry than Taiwan is,” says Feng Jiansan, a professor of journalism at National Cheng Chi University (NCCU). “China is willing to invest heavily in content, and Taiwan is not.” Investors in Taiwan aren’t willing to take a risk on a show that might not be a success, he notes, adding that several of Taiwan’s largest television companies have been losing money since 2002.

To be sure, TV censorship in China is tightening, constraining creative space. A March report in The Wall Street Journal noted that fantasy or historic costume dramas comprised more than half of the10 highest-rated dramas on Chinese satellite TV in 2015.

Yet those costume dramas produced in authoritarian China are finding a receptive audience in freewheeling Taiwan. On multiple trips to a dry cleaner near Taipei’s Dongmen MRT Station this year, the writer has observed the staff engrossed in costume dramas imported from China. The shows “are a good way to pass the down-time here,” the manager says.

Mindy Lee, vice president at Fox International Channels Taiwan, says Fox features Chinese costume dramas as part of its regular programming. “The Chinese programming we run gets very good ratings,” she says.

Roger Christiansen, a veteran Hollywood television director (he was on the directing team of the U.S. sitcom Friends from 2000 to 2004) and a professor at Shanghai’s Songjiang University since 2013, says China’s costume dramas are notable for their production value. “They have to compete with Korea and Japan so I am seeing overall improvements in the production quality: camera work, lighting, sound, editing, acting, directing and even producing,” he says.

Taiwanese “have some curiosity to see what kind of stories are coming out of China,” says Christiansen, who as a Fulbright recipient taught at Taipei’s National University of the Arts in the mid-2000s. “Since production and story-telling are improving, more people are interested in watching.”

A market that’s too free

Compared to the content restrictions in China or Korea – another flourishing television market where the government plays a decisive role – the government’s attitude toward Taiwan’s television sector tends to be laissez-faire. That lack of guidance is hurting the industry, experts say. “There is no true market leader – the sector is too fragmented,” says Fang of NCCU, noting that HK TV B has the largest market share with just 17%.

“People do not crave such an unregulated free-for-all,” says SOAS’s Rawnsley. She traces the problem back to Taiwan’s martial law era (1949-1987) when the government tightly controlled the flow of information. For decades, Taiwan’s only television stations were run by the government or the ruling Chinese Nationalist Party or Kuomintang (KMT). Towards the end of that period, underground pirate TV channels began to flourish as a trusted content source, “providing people with the information the government wouldn’t provide,” adds Rawnsley.

As a result of that legacy, Taiwanese are suspicious of any state involvement in media, and the government takes a generally hands-off approach. That policy has meant no restrictions on the amount of foreign-produced content that can air in Taiwan, as well as little government investment in public television. “Regulation doesn’t necessarily mean censorship,” Rawnsley says. “Democratic countries such as Korea and France have requirements for locally produced content, and their governments invest heavily in public television.”

Still, she concedes that the public is unlikely to welcome government involvement in television in the short term. “It’s a thorny issue,” she says. Noting that the environment did not change during former President Ma Ying-jeou’s eight years in office (2008-2016), she points out the KMT has supported the free market in Taiwan’s media since the nation’s democratization. “Since they used to control the media, they play it safe now,” she says. “The KMT didn’t want to be seen as advocating for more state control.”

In Korea’s case, heavy government investment has helped its TV dramas to become a massive hit across Asia and even in the West. “Korean TV uses all the right ingredients to make successful TV programs,” says Songjiang University’s Christiansen. “The stories are great, the actors are attractive, and the production value is high. People now expect quality work from Korea.”

The South Korean government’s aggressive anti-piracy measures have also been a big help to its content producers, notes a veteran of Taiwan’s television industry who spoke on condition of anonymity. “South Korea is a free country, just like Taiwan, but that doesn’t stop the Korean government from blocking websites that illegally broadcast pirated content,” the source says.

The person notes that 32 European nations also have legislation that includes provisions to block infringing overseas websites. “The Taiwan government likes to tell us that the U.S. doesn’t engage in any Internet censorship, so we should not. That’s just an excuse to do nothing.”

Fox’s Lee agrees that piracy is undermining Taiwan’s television sector. The problem has grown acute in the past two years, she says, noting that advertising and monthly cable revenue have fallen over that period as consumers increasingly tune in for free on the Internet. “The government is focused on the opinions of Internet users because it’s afraid of losing votes,” she says.

In the year that has passed since Taiwan Business TOPICS last reported on the piracy problem, there has been no improvement in the situation, Lee says. She faults the National Communications Commission under former chairman Howard Shyr for failing to tackle the problem, instead taking the position that it should be the responsibility of the Taiwan Intellectual Property Office (TIPO).

If online piracy can be brought under control, experts say Taiwan should redouble its efforts to develop over-the-top content (OTT). “The best way for Taiwan to inject new life into the television market is to start developing Web-based TV series,” says Songjiang University’s Christiansen. “Everything we are watching on TV these days is coming from streaming services on the Internet.”

He concedes that competing with Chinese, Korean and Japanese programming will be a challenge because of their greater resources. Instead of trying to vie with them head on, Taiwan should “try a different, less expensive route,” he suggests. “Make interesting short series and then try to develop them into longer and better series and find an audience. Once there is an audience watching, then you can attract investors and sponsors to support the project and take it to a higher level.”