Next Media to sell off TV arm, lay off hundreds of employees
The China Post news staff
October 2, 2012, 12:05 am TWN
The China Post news staff--Next Media Group has signed a deal to sell its TV arm to the chairman of ERA Communications Co., a local cable and satellite TV company, and will lay off 504 employees in the process, according to a statement issued by the group's executive director.
Cassian Cheung said in the statement that the group has inked a memorandum of understanding with ERA Chairman Lien Tai-sheng to sell Next TV Broadcasting Ltd. to Lien.
The Hong Kong-based group will on Oct. 31 also terminate its video-on-demand (VOD) services, which are currently operated by subsidiary Next Multi-media Entertainment Services Ltd., Cheung added.
He said the group has invested heavily over the past three years in building a world-class, high-quality digital TV service and a VOD platform in Taiwan, but could not overcome regulatory and market access obstacles.
The group was plagued by the National Communications Commission's lengthy approval process and the platform's inability to penetrate local TV and cable network markets because of opposition from domestic media companies fearful of increased competition, the statement said.
As a result, many Taiwanese viewers were unable to watch Next TV, but the group is quite proud of having generated high-level quality TV and multimedia services in Taiwan, the statement said.
Because of Next TV's lack of access to mainstream TV networks, the company decided its next best option was to merge its TV arm with an existing TV network operator, the statement said. Therefore it's also necessary for the group to terminate Next Multi-media Entertainment, a supporting affiliate of Next TV.
The group's decision to sell Next TV and close Next Multi-media Entertainment was made after an evaluation of the future development of the two business entities, the statement said.
Jimmy Lai, chairman of Next Media Group, apologized in a short message to employees of both subsidiaries for letting them "waste" three years at the companies.
Meanwhile, the Department of Labor under the Taipei City Government yesterday confirmed that Next Media Group will lay off 504 employees from the two subsidiaries, citing a layoff plan filed by the group with the department.
Chen Yeh-shin, commissioner of the labor department, said at an emergency press conference held yesterday afternoon that 300 out of a total of 990 employees at Next TV will be laid off in three stages, with 100 on Oct. 1, another 100 on Oct. 31 and the last 100 on Nov. 30.
Chen continued that as many as 204 out of a total of 256 employees of Next Multi-media Entertainment will be let go in six stages, including 95 on Oct. 1, 14 on Oct. 17, 57 on Oct. 31, 17 on Nov. 1, seven on Nov. 16 and 14 on Nov. 30.
The city labor department chief said that although the two subsidiaries had worked in accordance with labor laws by submitting their layoff plans to the department, they had yet to provide solid justification for the layoffs. In order to safeguard the interests of the employees, the department will request that the two firms offer additional information regarding the need for the layoffs. Follow-up inspections will also be undertaken, Chen said.