Telematics and Informatics xxx (2017) xxx–xxx

Contents lists available at ScienceDirect

Telematics and Informatics

journal homepage: www.elsevier.com/locate/tele

Television media old and new: A niche analysis of OTT, IPTV,

and digital cable in Taiwan q
Shu-Chu Sarrina Li 1
Institute of Communication Studies, National Chiao Tung University, 1001 University Road, Hsinchu City, Taiwan ROC

a r t i c l e i n f o a b s t r a c t

Article history: Adopting Dimmick’s niche theory as its theoretical framework, this study used gratifica-
Received 16 November 2016 tions obtained and gratification opportunities to examine the competitive relationships
Received in revised form 31 March 2017 among three television media—OTT, IPTV (MOD), and digital cable. Two research methods
Accepted 26 April 2017
were employed, the first of which was to conduct 20 intensive interviews. The second
Available online xxxx
method was to adopt a nationwide telephone survey that resulted in 1015 valid question-
naires. The data analysis yielded three conclusions. (1) Among the three media, OTT was
Keywords:
the most competitive, while digital cable and MOD were almost equivalent in terms of
OTT
IPTV
their competitiveness. (2) The highest competition occurred between MOD and digital
Digital cable cable because the respondents perceived the two media to resemble one another more
Niche theory than OTT. (3) This study found OTT to be a generalist, while MOD and digital cable were
Gratifications obtained specialists.
Competitive relationships Ó 2017 Elsevier Ltd. All rights reserved.

1. Introduction

The rapid development of Internet technology has introduced new types of television into society, including over-the-top
television (OTT) services. OTT services, defined by U. S. Federal Communication Commission, are as video services that
broadcast via the Internet (Kim et al., 2016). Building on the popularity of its self-produced drama, House of Cards, Netflix
has become able to successfully operate its OTT media globally and established branches in more than 130 countries. Tai-
wan’s OTT services are at the beginning stages. Most of the services originate in Mainland China. However, several large
OTT media companies have established branches in Taiwan. For example, Netflix entered Taiwan’s market in January
2016. In addition, iQIYI.com, the largest OTT operator in China, establish a branch office in Taiwan in March 2016 (Wang,
2016). OTT is characterized with flexible scheduling and a wide variety of content. Thus, scholars predict that OTT services
will become strong competitors for digital cable, which has been the dominant medium in Taiwan for the past 20 years (Hsu
et al., 2015).
According to a project sponsored by NCC (Hsu et al., 2015), seven types of OTT exist in Taiwan: (1) Network Operators:
these OTT channels are operated by Taiwan’s telecommunication companies, which are paid channels. For example, Chung-
Hua telecomm operates HiChannel TV and Hami TV. Half of its channels are sports-related channels. (2) Content Retailers:
these OTT channels provide pay-per-view service that is similar to DVD renting. Some operators also own movie theaters,

q
This manuscript was supported by a grant from the Ministry of Science and Technology of Taiwan. MOST 103-2511-S-009-005-MY3.
1
Shu-Chu Sarrina Li (Ph.D., University of Iowa, 1993) is a Professor in the Institute of Communication Studies at National Chiao Tung University, Taiwan,
Republic of China. Her research interests include new media, environmental communication, and the management of media organizations. Some of her recently
published articles appear in Telecommunications Policy, Computers in Human Behavior, New Media & Society, and Telematics and Informatics.
E-mail address: shuchu@mail.nctu.edu.tw

http://dx.doi.org/10.1016/j.tele.2017.04.012
0736-5853/Ó 2017 Elsevier Ltd. All rights reserved.

Please cite this article in press as: Li, S.-C.S. Television media old and new: A niche analysis of OTT, IPTV, and digital cable in Taiwan. Tele-
mat. Informat. (2017), http://dx.doi.org/10.1016/j.tele.2017.04.012
2 S.-C.S Li / Telematics and Informatics xxx (2017) xxx–xxx

which offer users to view movies at home. (3) Traditional Media Operators: newspapers, cable news channels, or terrestrial
television stations adopt various approaches to run OTT channels. (4) Content Aggregators: these OTT operators purchase a
variety of contents including movies, dramas from South Korea, Japan, and China, games, karaoke, weather & traffic informa-
tion, and provide various packages for users to subscribe. One example is LiTV that is quite popular in Taiwan. (5) Illegal
Operators: these OTT channels offer movies and dramas that they do not own copyrights while using advertising to support
their operations. (6) User Generated Content (UGC): these OTT channels include YouTube, Dailymotion that is from France,
Taiwan locally produced UGC such as I’m TV, Xuite. (7) Hardware Providers: these operators sell equipment to allow users to
project the videos of computers or cell phones into the screen of television such as Chromcast, BenQ (Smart LED Apps). These
operators cooperate with content providers and thus, when users purchase the equipment, they are able to view several OTT
channels.
According to a recent survey in Taiwan (China Times, 2016, Nov. 23), 57% of the 1633 respondents used television to view
programs in OTT services, 21% used cell phones or tablet PCs, 12% used PCs, and 7% of the respondents used smart TV. Fur-
thermore, the data indicated that the most favorite program in Taiwan’s OTT services was YouTube that was viewed regu-
larly by 88% of the respondents, followed by iQIYI and LiTV that were viewed regularly by 41% and 17% of the respondents,
respectively, and Netflix was viewed regularly by 17% of the sample. This survey also showed that among the 1633 respon-
dents, 74% used free OTT services and only 26% used paid services.
Different from digital cable, IPTV (Internet Protocol TV) is another new television medium in Taiwan. There is only one
IPTV operator in the country, namely, MOD (Multi-media on demand), which is operated by ChungHua Telecom, Taiwan’s
largest telecommunications company. MOD began operation in 2003, and the most recent data indicate that it had a pene-
tration rate of 15% in 2015 (NCC, 2016). Cable television has been a major television medium in Taiwan and for the past
20 years, has maintained a penetration rate of approximately 60%. Recently, cable television operators started digitalization,
which was 95% complete at the end of 2015 (NCC, 2016). With digitalization, cable television can provide its subscribers
more functions and channels, thus enabling cable television to fortify its competitiveness in Taiwan’s television market.
The niche theory originates in population ecology and is useful to explain the coexistence of new and old communications
media in an environment with limited resources. The niche theory defines competition as the overlap of resources used by
two or more media. Therefore, when two media use the same resources, they are in competition with one another. As the
degree of overlap increases, these media find themselves in increasingly fierce competition. According to the niche theory,
consumers have limited time and money. Thus, when new media with better functions become available, consumers will be
attracted to use these new media, which leaves less time and money for the old media (Dimmick, 2003; Gaskins and Jerit,
2012). Dimmick (2003: 29–33) identified six types of resources used in the media industry. Among them, gratifications
obtained and gratification opportunities are the most important resources because they automatically direct consumer
spending, consumer time, and advertising spending into the media industry. The sixth resource type (media content) is con-
sidered by certain scholars not to be a limited resource. Thus, it is not applicable to the niche theory.
Adopting the niche theory as its theoretical framework, this study uses gratifications obtained and gratification opportu-
nities to examine the competitive relationships among the three television media—OTT, IPTV, and digital cable.

2. Literature review

2.1. Niche theory

According to the niche theory, the survival of an organization depends more on the resources provided by the environ-
ment than on the organization’s internal operation. This theory also suggests that the fit between an organization or a pop-
ulation and its environment determines how well this organization or population is able to survive. A niche is the resource
utilization pattern of an organization or population, which enables scholars to measure how well an organization or popu-
lation fits its environment. A population is defined as a group of organizations with similar characteristics. Thus, OTT, MOD,
and digital cable are different populations that compete for the same resources in an environment. Populations typically con-
sume more than one resource for survival. Therefore, a niche often possesses more than one dimension (Dimmick, 2003: 23–
42; Gaskins and Jerit, 2012; Min and Kim, 2012).
Three concepts are important to understanding the niche of a population: niche breadth, niche overlap, and competitive
superiority. Niche breadth is the area of a niche, which includes the quantity and the magnitude of resources consumed by a
population. Based on niche breadth, populations can be classified into specialists and generalists. Specialists have a narrow
niche because they use few resources. However, they tend to be efficient resource users. Generalists consume many
resources and thus have a wider niche breadth. However, they do not utilize their resources efficiently. Generalists can easily
adjust when substantial changes occur in the environment. However, specialists have difficulty adjusting when such changes
occur (Dimmick, 2003; Dimmick et al., 2010, 2011). Niche overlap measures the degree to which two populations use the
same resources and competitive superiority assesses the extent to which one population is better than another population
with respect to resource-utilization capability. If the degree of niche overlap between two populations is high, the superior
population will replace the inferior population. The phenomenon of competitive exclusion occurs when a superior popula-
tion assumes the niche space of an inferior population, which is rare in the media industry. A more frequently appearing

Please cite this article in press as: Li, S.-C.S. Television media old and new: A niche analysis of OTT, IPTV, and digital cable in Taiwan. Tele-
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 S.-C.S Li / Telematics and Informatics xxx (2017) xxx–xxx 3

phenomenon is competitive displacement, which occurs when part of the niche space of an inferior population is assumed by
a superior population (Dimmick, 2003; Dimmick et al., 2010, 2011).

2.2. Gratifications obtained and gratification opportunities

The concept of gratifications obtained originates in the uses and gratification theory and refer to the satisfactions derived
from using a medium. According to the uses and gratifications theory, gratifications obtained are why individuals continue
using a medium. Thus, the niche theory suggests that by comparing the degrees of gratifications obtained from different
media, researchers can measure the differences among the capacities of these media to satisfy consumers’ needs. With
greater capacities, a medium stands in a better position to compete with other media (Dimmick, 2003: 30–31; Dobos,
1992; Rubin, 1994). Gratification opportunities are related to temporal and spatial constraints. According to Dimmick
et al. (2004: 22), gratification opportunities are ‘‘properties of a medium that amplify or attenuate the opportunities for
deriving gratifications from the medium.” Therefore, when media enable individuals to eliminate or reduce the constraints
of time and space, these media possess greater gratification opportunities than other media. For example, electronic news-
papers that enable individuals to view news at any time or location have greater gratification opportunities than television
news.

2.3. Niche breadth and competitive superiority among three television media

According to the niche theory, when the competition among several populations is too high, the superior population will
gradually invade the niche space of the inferior populations. Therefore, inferior populations try to differentiate themselves
from the superior population by developing different niches to coexist with the superior population (Dimmick, 2003). Empir-
ical studies confirm this proposition (Li, 2001; Huang and Li, 2013; Dimmick et al., 2000; Dimmick and Rothenbuhler, 1984).
For example, Dimmick and Rothenbuhler (1984) demonstrated that as broadcast television appeared in the 1950s, the com-
petition between broadcast television and radio was fierce. As an inferior population, radio differentiated its niche from that
of television by increasing its local advertising income and gradually relinquished national advertising revenue to television
to coexist with broadcast television. Another example is the study by Dimmick et al. (2000), which demonstrated that their
respondents perceived the telephone to be better than email in terms of sociability, while email was considered to be supe-
rior to the telephone with respect to its gratification opportunities. Additionally, the different features of the two media
explained why they could coexist in the same environment. A 2013 study by the authors of this study examined three types
of OTT—YouTube, PPStream, and TuDo—in Taiwan and found that YouTube and PPStream had similar scores in niche
breadths and competitive superiorities for several dimensions. However, the respondents in this study perceived the two
media to be highly different. Thus, their study predicted that the two media would be able to coexist in Taiwan.
As previously stated, Taiwan’s OTT market is at the beginning stage, with most OTT operators from Mainland China. Sev-
eral operators in Taiwan are legally registered companies, while others operate OTT services using illegal approaches, such as
showing movies or dramas without obtaining permission from the copyright holders. Therefore, OTT system quality varies
from one service to another, with certain illegal OTT services having inferior picture quality and poor Chinese translation but
showing the most recent movies or dramas. Most OTT services in Taiwan rely on advertising to finance their operations.
Thus, most of these services are free to consumers (Hsu et al., 2015). MOD is operated by Chung-Hua Telecom, which has
been using its ADSL (Asymmetric Digital Subscriber Line) to promote MOD subscription. More specifically, Chung-Hua Tele-
com offers special low prices (from US$ 3 to 9 a month) to its more than 4.5 million ADSL subscribers to use MOD services
(ChungHua Telecom Report, 2016). All MOD channels have been digitalized, with most of them in HD quality. Therefore,
MOD system quality, including picture quality, has been good and stable since its inception (Hsu et al., 2015). Regarding
cable television, its digitalization proceeded slowly before 2014, with most systems with digitalization rates below 30%.
The NCC, the organization in Taiwan that governs communications, used a special fund to partially support the digitalization
of cable television. Subsequently, the digitalization rates rapidly increased from 55% in 2014, to 75% in 2015, and to 95% at
the end of 2015 (NCC, 2016). Thus, cable television’s system quality is not as good as that of MOD but better than that of OTT.
Based on this reasoning, the first hypothesis is as follows:

H1a. Regarding the gratification of good system quality, MOD has higher scores of niche breadth and competitive superiority
than digital cable, which in turn has greater niche breadth and competitive superiority than OTTs.

According to a recent survey, the penetration rate of the Internet in 2015 was 80.3%, which indicates that most Taiwanese
are Internet users (TWNIC Survey, 2015). With the prevalence of the Internet in Taiwan, most Taiwanese have become accus-
tomed to using the Internet for daily activities. Thus, Internet users find it easy to use OTT services because they are embed-
ded in the Internet infrastructure. In addition, the strength of the Internet lies in its interactivity, which enables Internet
users to interact with the servers to obtain what they want. Therefore, OTT services that are based on the Internet should
be easy to use and support interactivity. MOD is a type of IPTV whose structure is similar to the Internet. However, MOD
is typically constructed using the intranet of the system operators. Thus, IPTV differs from OTTs because the IPTV platforms
are constructed by IPTV operators who use closed systems that are not accessible to non-subscribers. IPTV, which is also
referred to as ‘‘a walled garden,” differs from OTT because OTT services are constructed on public networks (Liu and

Please cite this article in press as: Li, S.-C.S. Television media old and new: A niche analysis of OTT, IPTV, and digital cable in Taiwan. Tele-
mat. Informat. (2017), http://dx.doi.org/10.1016/j.tele.2017.04.012
4 S.-C.S Li / Telematics and Informatics xxx (2017) xxx–xxx

Chen, 2015). MOD is a closed system. However, its structure is similar to the Internet. Thus, it has the basic features of the
Internet such as interactivity. However, MOD is more complicated to use than OTT because users must first enter the system
and then activate the services. Digital cable has been available in Taiwan for more than 20 years, and more than 60% of Tai-
wanese use it. Most Taiwanese have become accustomed to using remote-control devices to view cable television. Such
devices are simple and easy to use. Therefore, with respect to ease of use, cable television should be better than OTT and
MOD. Regarding interactivity, OTTs should be the best, followed by MOD. Cable television should have the least capacity
in this regard because cable television is designed to broadcast programs to its subscribers. Based on this reasoning, this
study proposes the following hypotheses:

H1b. Regarding the gratification of ease of use, digital cable has higher scores of niche breadth and competitive superiority
than OTTs, which in turn has greater niche breadth and competitive superiority than MOD.

H1c. Regarding the gratification of interactivity, OTTs has higher scores of niche breadth and competitive superiority than
MOD, which in turn has greater niche breadth and competitive superiority than digital cable.
OTT’s strongest point is its wide variety of content. Many Internet users like to use OTT because they can view programs
that are not shown on cable or MOD, such as YouTube videos. In addition, movies or dramas that are produced in China or
South Korea are popular in Taiwan. Thus, Internet users often use OTT to view programs that are concurrently broadcast in
China or South Korea. Sports are another popular program type that Internet users view via OTT (Liu and Chen, 2015). When
MOD began operation in 2003, Taiwan’s cable television system operators regarded it as their strongest competitor because
MOD’s operator is ChungHua Telecom, which possesses powerful resources and capital. Therefore, all cable system operators
have united and boycotted MOD by requiring the 50 most popular cable channels not to sell to MOD. By purchasing popular
sporting events and movies, MOD has tried to compensate for its lack of the 50 most popular channels in Taiwan (Hsu et al.,
2015). Therefore, this study proposes the following hypothesis.

H1d. Regarding the gratification of good program content, OTT has higher scores of niche breadth and competitive
superiority than digital cable, which in turn has greater niche breadth and competitive superiority than MOD.
Taiwan has a population of 23 million inhabitants. However, there are more than 10 news channels in Taiwan. Many
scholars have concluded that Taiwanese like to watch news programs because the 10 cable news channels are ranked among
the 50 most popular channels. Furthermore, most people in Taiwan have had a habit to view news programs in the evening
hours as a means for surveillance (Li, 2017). Therefore, this study predicts that news programs will be an important reason
for Taiwanese to use the three television media. Digital cable includes the 10 most popular news channels. Thus, it should
have the highest scores for the gratification of news programs. MOD has seven news channels whose ratings are not high
because most of these news channels are new and thus unfamiliar to most viewers. OTT enables users to access news pro-
grams of other countries, including China, Hong Kong, and Singapore. However, news is culturally specific. Thus, Internet
users may not be interested in watching news programs via OTT. Based on this reasoning, this study proposes the following
hypothesis:

H1e. Regarding the gratification of news programs, digital cable has higher scores of niche breadth and competitive
superiority than MOD, which in turn has greater niche breadth and competitive superiority than OTT.

2.4. Niche overlap, competitive superiority, and replacement behaviors

Niche overlap measures how much competition exists between two media. According to the niche theory, when the niche
overlap between two media is high, the replacement behaviors will be predicted by the scores of competitive superiority
(Dimmick, 2003; Dimmick et al., 2010; Dimmick et al., 2011). For example, Lee (2011) examined 2G, 3G, landline telephone,
and Internet telephone service in Taiwan and found that the respondents perceived 2G to be better than the other three ser-
vices because 3G was expensive and its quality was not reliable. Therefore, her study predicted that 3G was unable to replace
2G at that time in Taiwan. Ha and Fang (2012) found that because online news and traditional news media were highly over-
lapped, the respondents’ perceived superiority of online news could predict the replacement behavior of traditional news
media by online news. Ramirez et al. (2008) found that there was strong competition among email, cellular telephones,
and instant messaging, with instant messaging having the highest superiority scores. Therefore, their study predicted that
instant messaging would gradually replace email and cellular telephones. Generally, the literature review has shown that
superiority scores are positively correlated with replacement behaviors. Thus, this study proposes the following hypothesis:

H2. The competitive superiority scores of OTT, MOD, and digital cable will be positively associated with the respondents’ use
frequencies of OTTs, MOD, and digital cable, respectively.
Among the three television media, MOD and digital cable resemble one another more than OTT for the following reasons.
First, most MOD and digital cable offerings appear in the form of linear programming, while OTT programs do not. Second,
MOD and digital cable construct their own networks, from which subscribers use services. Thus, subscribers require system

Please cite this article in press as: Li, S.-C.S. Television media old and new: A niche analysis of OTT, IPTV, and digital cable in Taiwan. Tele-
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 S.-C.S Li / Telematics and Informatics xxx (2017) xxx–xxx 5

operators to set up equipment for them when they subscribe, while OTT users access programs via the Internet. Third, view-
ers use television sets to view MOD or digital cable programs. However, most viewers use computers or tablet computers to
view OTT programs. Therefore, the third hypothesis is proposed as follows:

H3. Digital cable and MOD have higher degrees of overlap with one another than with OTT with respect to all gratifications
obtained and gratification opportunities.

3. Research methodology

3.1. Intensive interviews on gratifications obtained from three media

This study needed a uniform set of items for gratifications obtained from the three television media and there are no stud-
ies that investigated what gratifications obtained from OTT in Taiwan. Therefore, this study conducted 20 intensive inter-
views. Before conducting the intensive interviews, this study first reviewed relevant studies (Li et al., 2007; Li, 2003; Hsu
et al., 2015; Huang and Li, 2013) and used some items of past studies as guidelines for intensive interviews. This study
adopted four criteria—age, education, sex, and residential area—to purposely recruit people with different backgrounds
for interviews. Using a snowballing method, this study recruited for interviews ten females and ten males, who had expe-
riences using all the three media. The education levels of the interviewees varied from college to doctoral education and their
age also varied from the youngest at 18 years to the oldest at 46 years. Furthermore, their residential areas varied in terms of
northern, central, and southern Taiwan. This study analyzed the responses of the interviews and used only those items that
were mentioned at least by three interviewees as the questionnaire items for gratifications obtained. This procedure allowed
this study to identify 24 items of gratifications obtained for the telephone survey.

3.2. Telephone survey

The questionnaire for the telephone survey contained four sections. The first section had six questions that asked the
respondents to indicate whether they had used the three media and how long they had used each. The second section
had 72 questions with 24 items on gratifications obtained for each of the three media. The third section contains questions
regarding mass media use, including television, newspaper, radio, magazine, movie, and the Internet. The last section is the
questions regarding demographics including age, education, sex, personal income, and family income.
This study conducted a nationwide telephone survey with a computer-assisted telephone interview (CATI) system in July
2015. To obtain a representative sample, a proportionate stratified random sampling method was adopted. Twenty tele-
phone interviewers were hired and were intensively trained before they conducted the telephone interviews at a central
location supervised by the researchers. A total of 1890 telephone calls were made, from which 1015 valid calls were
obtained. The response rate was 54.7%. This study found that among the 1015 respondents, 786 identified themselves as reg-
ular OTT users, 510 as MOD users, and 1015 as digital cable users. Moreover, 365 of the respondents indicated that they were
both OTT and MOD regular users, 510 were MOD and digital cable regular users, and 786 were digital cable and OTT regular
users.

3.3. Confirmatory factor analysis on gratifications obtained

This study used confirmatory factor analyses (CFAs) to obtain an identical set of factors for the three media. The following
steps were adopted to perform the CFAs; this study first conducted three exploratory factor analyses (EFAs) on the 24 items,
and the results showed that a five-factor model of OTTs had the best results in terms of factor loadings and percentage
explained; therefore, this study used the five-factor model of OTTs as the basis to conduct three CFAs on the 24 items of
the three media with the package of LISREL. Using the following four criteria suggested by several statisticians (Hair
et al., 2006; Wu, 2007), this study measured the goodness of fit for CFAs--RMSEA (<0.10), NFI (>0.90), IFI (>0.90), and CFI
(>0.90). This study kept all the 24 items because the three CFAs met the requirements for goodness of fit, and the data were
summarized in Table 1.
The first factor contained six items, all of which were concerned about system quality such as good picture quality, and
was thus named as good system quality. The second factor was named as ease of use because the three items were about
how easy to use. The third factor had seven items, all of which were related to the function of interactivity, and was thus
named as easy interactivity. The fourth factor had four items that were concerned about the quality of programs, and
was hence named as good program content. The fifth factor contained three items that were about news programs or habits,
and was named as habits & news programs.

3.4. Niche breadth, niche overlap, and competitive superiority

The perceived level of gratifications and gratification opportunities measured by a seven-point Likert scale are interval
data. Thus, this study used the formula (1) developed by Dimmick (2003: 79) to calculate the scores of niche breadth for

Please cite this article in press as: Li, S.-C.S. Television media old and new: A niche analysis of OTT, IPTV, and digital cable in Taiwan. Tele-
mat. Informat. (2017), http://dx.doi.org/10.1016/j.tele.2017.04.012
6 S.-C.S Li / Telematics and Informatics xxx (2017) xxx–xxx

Table 1
Confirmatory factor analysis for three media.

Gratifications obtained OTT MOD Digital cable

Factor 1: Good system quality
Quality of caption is good 0.86 0.92 0.88
Quality of signals is good 0.79 0.90 0.82
Screen is comfortable 0.79 0.89 0.80
Quality of picture is good 0.86 0.93 0.82
Able to view with friends or family 0.68 0.88 0.64
Have copyrights 0.68 0.85 0.71
Cronbach a 0.905 0.963 0.894
Factor 2: Ease of use
Program information is clear 0.78 0.88 0.73
Favorable program formats 0.82 0.89 0.78
Ease of operation 0.78 0.87 0.74
Cronbach a 0.875 0.818 0.804
Factor 3: Easy interactivity
Many interactive functions 0.85 0.89 0.67
No interference from advertising 0.61 0.83 0.61
Easy to carry around 0.73 0.68 0.52
Able to know others’ point of views 0.74 0.86 0.77
View programs that can’t find in other platforms 0.79 0.82 0.74
Easy to find the programs wanted 0.82 0.89 0.76
Program information clearly organized 0.80 0.91 0.76
Cronbach a 0.932 0.944 0.864
Factor 4: Good program content
Greater variety of programs 0.73 0.89 0.71
View programs at any time 0.79 0.87 0.75
Reasonable price 0.65 0.88 0.65
Quick update on programs 0.82 0.89 0.62
Cronbach a 0.877 0.920 0.809
Factor 5: Habits & News program
News programs 0.74 0.82 0.67
Habits 0.53 0.86 0.77
Cronbach a 0.574 0.828 0.682
Goodness of Fit
X2 1486.75 1408.64 1109.80
df 242 242 242
RMSEA 0.071 0.069 0.059
NFI 0.98 0.99 0.98
IFI 0.99 0.99 0.98
CFI 0.99 0.99 0.98

OTT, MOD, and digital cable. A higher score from this formula indicates a wider niche breadth. For niche overlap, the formula
(2) developed by Dimmick (2003: 79) was used. A lower score calculated from this formula indicates a higher overlap
between two media. For competitive superiority, the formula developed by Dimmick (2003: 80) was used, which contains
two sub-formulas, SUPERIORITY S_(i > j) and SUPERIORITY S_(j > i). The first sub-formula is used to measure the extent to
which medium i is better than medium j, while the second sub-formula is used to measure the extent to which medium
j is better than medium i. If medium i is superior to medium j, then two conditions must be met; first of all, the score cal-
culated from SUPERIORITY S_(i > j) must be higher than the score calculated from SUPERIORITY S_(j > i), and the means of the
two media from a t-test must show a significant difference.

3.5. The sample profile

This study found that 55.8% of the 1015 respondents were females. For age, 28% of the respondents indicated that they
were above 50 years old, 21.9% were between 40 and 50 years old, 19.9% were 30–40, 17.2% were 20–30, and the remaining
13% were 16–20. For education, 10.4% of the respondents indicated that they had received graduate school education, 37.5%
college education, 44.7% high school education, 5.7% junior high school education, and the remaining 1.3% elementary edu-
cation. This study compared this sample profile with Taiwan’s population of 2015 and found that (1) females respondents
and the respondents who had college and graduate school education were overrepresented in this sample, and (2) the
respondents who were older than 50 years old were less represented in this sample (Monthly Report from the Executive
Yuan, 2015). This study required that individuals who had used at least two of the three media to be qualified as the respon-
dents. Thus, this sample profile is more similar to Taiwan’s Internet-using population than to Taiwan’s general population.

Please cite this article in press as: Li, S.-C.S. Television media old and new: A niche analysis of OTT, IPTV, and digital cable in Taiwan. Tele-
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 S.-C.S Li / Telematics and Informatics xxx (2017) xxx–xxx 7

4. Research findings

4.1. Niche breadth and competitive superiority

Using the CFAs, this study identified five niche dimensions, which are good system quality, ease of use, easy interactivity,
good program content, and habits & news programs. This study calculated the scores of niche breadth, niche overlap, and
competitive superiority for each of the five dimensions of the three media. The data were summarized in Tables 2–4.
Regarding the data on niche breadth and competitive superiority, MOD had the widest niche breadth for the gratification
of good system quality, followed by digital cable and OTT had the narrowest niche breadth for this gratification (Table 2). In
addition, for good system quality, MOD was superior to digital cable, which in turn was superior to OTT (Table 4). Therefore,
H1a was supported. Regarding the two gratifications, ease of use and good program content, OTT had the widest niche
breadths for the two gratifications, followed by digital cable, and MOD had the narrowest niche breadths (Table 2). However,
the data on the scores of competitive superiority reveal that OTT was superior to MOD, which did not differ from digital cable
for these two gratifications. Therefore, H1b was not supported, while H1d was only partially supported.
Regarding easy interactivity, OTT had the widest niche breadth, followed by MOD, and digital cable had the narrowest
niche breadth for this gratification (Table 2). Regarding competitive superiority, OTT’s score was superior to that of MOD,
which in turn was superior to that of digital cable for the gratification of easy interactivity (Table 4). Therefore, H1c was sup-
ported. Regarding the gratification of habits & news programs, digital cable had the widest niche breadth, followed by OTTs,
and MOD had the narrowest niche breadth for this gratification (Table 2). In addition, regarding competitive superiority, dig-
ital cable’s score was superior to that of OTT, which in turn was superior to MOD for this gratification. Therefore, H1e was
partially supported.

4.2. Niche overlap and replacement behaviors

Regarding the data on niche overlap, MOD and digital cable had the highest degrees of niche overlap on three of the five
gratifications, good system quality, easy interactivity, and good program content (Table 3). For the remaining two gratifica-
tions (ease of use and habits & news programs), the highest degrees of niche overlap occurred between OTT and MOD. Thus,
H3 was only partially supported.
The competitive superiority scores calculated using Dimmick’s formulas are superiority scores for a medium or a popu-
lation, not for individuals. One objective of this study was to examine the relationships between individual superiority scores
and replacement behaviors. This study used formulas that were modifications of Dimmick’s formulas by Feaster (2009) to
calculate individual superiority scores for each respondent. There are two sub-formulas (4), Si>j and Sj>i. The first sub-
formula was used to calculate a score that indicates the extent to which medium i is superior to medium j. The second for-
mula was used to calculate how much medium j is superior to medium i. There were five niche dimensions for each of the
three media. Therefore, this study yielded 15 individual superiority scores. Using individual superiority scores as dependent
variables, this study conducted 15 multiple regression analyses with the use histories of the three media as independent
variables, and demographics as control variables. The data are summarized in Table 5.
Regarding the superiority scores that indicated how much OTT was superior to MOD, OTT’s superiority scores were neg-
atively correlated with the use history of MOD in four niche dimensions (Table 5). Regarding the superiority scores that indi-
cated how much MOD was superior to digital cable MOD’s superiority scores were negatively correlated with the use history
of digital cable in all five niche dimensions, and positively correlated with the use history of MOD in four dimensions
(Table 5). Regarding the superiority scores that indicated how much digital cable was superior to OTT, digital cable’s supe-
riority scores were positively correlated with the use history of digital cable in all five niche dimensions and negatively cor-
related with the use history of OTTs for the gratification of easy interactivity (Table 5). Therefore, H2 was partially supported.

5. Discussion

5.1. Niche breadth and competitive superiority among the three media

As predicted, this study found that the respondents perceived MOD to have the highest degree of good system quality,
followed by digital cable, and OTT to have the lowest degree of good system quality. This finding is consistent with the find-
ings of past studies. For example, Hsu et al. (2015) has showed that some illegal OTT operators from Mainland China often
show movies or dramas that are concurrently broadcast in South Korea or in the U.S. The translation used in the program
captions is Simplified Chinese, which differs from the Traditional Chinese used in Taiwan. Additionally, the translations
are often made in haste. Thus, some of the translations are incorrect. For these two reasons, the captions are difficult to
understand. These illegal OTT operators that target at users of Mainland China rely on advertising to support their operation.
Because of their free of charge, they have attracted many college students or young people to view these programs via note-
books or personal computers. Furthermore, this finding is congruent with the outcomes of the intensive interviews. For
example, 19 of the 20 interviewees indicated that one limitation of OTT was the picture quality that was unstable and often
poor. Another limitation, which was mentioned by 19 interviewees, was OTT’s poor caption quality. A third limitation, which

Please cite this article in press as: Li, S.-C.S. Television media old and new: A niche analysis of OTT, IPTV, and digital cable in Taiwan. Tele-
mat. Informat. (2017), http://dx.doi.org/10.1016/j.tele.2017.04.012
8 S.-C.S Li / Telematics and Informatics xxx (2017) xxx–xxx

Table 2
Niche breadth for OTTs, MOD, and digital cable.

OTTs MOD Digital cable

1. Good system quality 0.578 0.680 0.676 MOD > Digital cable > OTTs
2. Ease of use 0.622 0.579 0.587 OTTs > Digital cable > MOD
3. Easy interactivity 0.750 0.501 0.463 OTTs > MOD > Digital cable
4. Good program content 0.733 0.519 0.557 OTTs > Digital cable > MOD
5. Habits & news program 0.558 0.422 0.656 Digital cable > OTTs > MOD
N of Respondents 786 510 1015

Table 3
Niche overlap values for OTTs, MOD, and digital cable.

OTT/MOD MOD/Digital cable Digital cable/OTT

1. Good system quality 1.768 1.410 1.931
2. Ease of use 1.509 1.538 1.489
3. Easy interactivity 2.270 1.676 2.555
4. Good program content 2.021 1.784 2.022
5. Habits & news program 1.749 1.989 2.070
N of Respondents 365 510 786

Table 4
Competitive superiority for OTTs, MOD, and digital cable.

Dimensions OTT/MOD MOD/Digital cable Digital cable/OTT

1. Good system quality OTT < MOD MOD > Digital cable Digital cable > OTT
2.079/29.737 14.994/10.353 22.952/7.263
t =
19.886***, N = 365 t = 2.497*, N = 510 t = 12.792***, N = 786
MOD > Digital cable > OTTs
4. Ease of use OTT > MOD MOD > Digital cable Digital cable < OTT
6.940/5.597 5.855/5.580 5.823/6.794
t = 2.216*, N = 365 t = 0.608, N = 510 t =
2.563*, N = 786
OTTs > MOD = Digital cable
7. Easy interactivity OTT > MOD MOD > Digital cable Digital cable < OTT
33.619/3.948 18.206/9.533 2.803/35.184
t = 17.523***, N = 365 t = 4.561***, N = 510 t =
31.884***, N = 786
OTTs > MOD > Digital cable
10. Good program content OTT > MOD MOD < Digital cable OTT > Digital cable
17.241/2.942 7.796/9.014 16.517/3.855
t = 14.034***, N = 365 t =
0.984, N = 510 t = 18.314***, N = 786
OTTs > MOD = Digital cable
13. Habits & news program OTT > MOD MOD < Digital cable Digital cable > OTT
4.252/3.233 2.545/5.514 6.121/2.863
t = 3.569***, N = 365 t =
7.670***, N = 510 t = 8.250***, N = 786
Digital cable > OTTs > MOD
*
p < 0.05, **p < 0.01, ***
p < 0.001.

was mentioned by 16 interviewees, was that the signal reception occasionally lagged because of insufficient Internet band-
width, which often occurred when mobile devices were used to receive OTT programs. In contrast, MOD and digital cable do
not exhibit the noted limitations because these two media do not use public networks but their own private networks to
deliver programs. In addition, for both media, caption quality is verified before programs are delivered to subscribers.
Unexpectedly, this study discovered that the respondents perceived OTT to be the best with respect to the gratification of
ease of use, while MOD and digital cable were perceived to have no differences for this gratification. There are two possible
explanations for this unexpected finding, the first of which is that more than 80% of Taiwan’s people were Internet users who
had been accustomed to using the Internet for daily activities, and thus, using the Internet to view programs in OTT services
was an easy task for them (TWNIC Survey, 2015). In contrast, remote-control devices after cable digitalization become com-
plicated because many interactive functions are built into these devices (NCC, 2016). Another possible explanation for this
unexpected finding can be found in the intensive interviews. (1) Ten of the 20 interviewees stated that OTT was better than
digital cable or MOD because OTT is easy to transport. In particular, when one was on the move, one could use mobile devices
to view OTT programs. However, digital cable and MOD did not offer this capacity. (2) Another strength of OTT, which was
mentioned by eight interviewees, was that no disruptions by advertisements occur when viewing programs. Most OTT pro-
grams present advertisements that last no longer than 60 s at the beginning of the programs. Thus, unlike MOD or digital
cable users, the OTT users could view an entire program without the advertising disruptions. (3) Sufficient information
regarding a program was provided in advance, and it was easy to search for the desired programs. Seven interviewees indi-

Please cite this article in press as: Li, S.-C.S. Television media old and new: A niche analysis of OTT, IPTV, and digital cable in Taiwan. Tele-
mat. Informat. (2017), http://dx.doi.org/10.1016/j.tele.2017.04.012
mat. Informat. (2017), http://dx.doi.org/10.1016/j.tele.2017.04.012
Please cite this article in press as: Li, S.-C.S. Television media old and new: A niche analysis of OTT, IPTV, and digital cable in Taiwan. Tele-

Table 5
Regression analyses on individuals’ superiority scores and use frequency of three media.

S.-C.S Li / Telematics and Informatics xxx (2017) xxx–xxx

OTT/MOD OTT/MOD OTT/MOD OTT/MOD OTT/MOD MOD/TV MOD/TV MOD/TV MOD/TV MOD/TV TV/OTT TV/OTT TV/OTT TV/OTT TV/OTT
(1) (2) (3) (4) (5) (1) (2) (3) (4) (5) (1) (2) (3) (4) (5)
Demo
Age 0.082 0.002
0.039
0.053 0.082
0.050
0.109*
0.064 0.022
0.035
0.069 0.104** 0.071 0.037
0.021
Edu
0.190**
0.080 0.062 0.089
0.037 0.074 0.014 0.060 0.012
0.015 0.115** 0.059
0.114*
0.116** 0.050
Gender
0.047 0.006 0.101 0.036
0.060
0.022
0.041
0.080 0.061 0.000 0.054 0.019 0.012
0.003 0.038
Media Use
OTT
0.072
0.014 0.047 0.077 0.070 0.006
0.040
0.039
0.042
0.024
MOD
0.111*
0.143*
0.054
0.203**
0.191** 0.161** 0.134** 0.124* 0.176** 0.234**
TV
0.301**
0.273**
0.229**
0.354**
0.369** 0.311** 0.270** 0.114** 0.235** 0.333**
R 0.265* 0.163 0.147 0.246** 0.200* 0.367** 0.346** 0.301** 0.419** 0.462** 0.344** 0.311** 0.184* 0.266** 0.341**
Adjusted R2 0.057 0.017 0.008 0.047 0.027 0.126 0.111 0.082 0.167 0.206 0.113 0.091 0.028 0.065 0.110
Sample Size 365 365 365 365 365 510 510 510 510 510 786 786 786 786 786

* = p < 0.01, ** = p < 0.001.

OTT/MOD(1) = the superiority score of OTT versus MOD on factor 1.
MOD/TV(2) = the superiority score of MOD versus digital cable on factor 2.
TV/OTT(3) = the superiority of digital cable versus OTT on factor 3.

9
10 S.-C.S Li / Telematics and Informatics xxx (2017) xxx–xxx

cated that they often used keywords to search for programs and then chose what they wanted, which saved them a substan-
tial amount of time. In addition, complete program information was provided by OTT and users used this information to
ensure that a given program was one that they wanted to view.
As expected, this study found that the respondents perceived OTT to be the best with respect to the gratification of easy
interactivity, followed by MOD. Digital cable had the least capacity with respect to easy interactivity. This finding is consis-
tent with past studies (Liu and Chen, 2015), showing that both OTT and MOD are built in the Internet infrastructure that is
good at interactivity, but OTT is better than MOD regarding its interactivity function because OTT services are constructed on
public networks rather than on closed systems. This explanation is also verified by the interview data. For example, 16 of the
20 interviewees indicated that they preferred OTT to MOD or digital cable because OTT freed them from temporal and spatial
constraints. These interviewees mentioned that they could view OTT programs any time or any place and that they could
determine the speed with which the program was shown, which enabled them to view programs efficiently. Another
strength mentioned by six interviewees was the ability to stop, advance, reverse, and record, which provides flexibility in
program viewing. A third strength regarding the gratification of easy interactivity, which was mentioned by six interviewees,
was that users could view the comments or recommendations of others when viewing OTT programs and could share pro-
grams that they liked with friends. MOD was regarded as the second best with respect to the gratification of easy interac-
tivity because MOD possesses several of the previously described strengths, such as the stop, advance, reverse, and record
functions. Digital cable was regarded as having the least capacity with respect to easy interactivity. However, if users sub-
scribe to advanced digital services, digital cable is equivalent to MOD for the dimension of easy interactivity (Hsu et al.,
2015). Therefore, digital cable operators should make efforts to promote their advanced digital services to enable potential
clients to gain a better understanding of its interactivity function.
As expected, this study found that the respondents perceived OTT to be the best with respect to the gratification of good
program content. However, this study unexpectedly discovered that digital cable did not differ from MOD for this gratifica-
tion. A possible explanation for this unexpected finding is that the strategy that ChungHua Telecom has adopted of offering
many sporting events and movies to compensate for its lack of the 50 most popular Taiwanese channels was successful
because the respondents perceived MOD and digital cable to have no differences regarding the gratification of good program
content (Hsu et al., 2015). This explanation is also verified by the interview data. For example, several interviewees men-
tioned that MOD offered a pay-per-view function to its subscribers, with which users can choose the most recent movies
for viewing at an additional charge. These interviewees considered the pay-per-view function to be a strong point of
MOD because it enabled them to view many high-quality movies. However, this function was expensive, which was regarded
as a MOD drawback. ChungHua Telecom may have to consider decreasing its pay-per-view price to enable its users to per-
ceive more clearly the benefits of this function as opposed to its disadvantages.
As expected, this study found that the respondents perceived digital cable to be the best with respect to the gratification
of habits & news programs, which was consistent with past studies’ findings. Past studies have showed that Taiwanese like to
view news and news discussion programs, and they regard viewing daily news programs as a means for surveillance. More-
over, Taiwanese prefer to view news channels in digital cable rather than in MOD because the former news channels are
familiar to them. Taiwan’s cable television includes the country’s most popular news channels (Li, 2017). This past study
has also found that Taiwanese often view news programs, which has become a habit for them. In particular, they favor polit-
ical discussion programs in which controversial political issues are explored with politicians and experts as discussants. This
explanation was also verified with the interview data. For example, several interviewees indicated that they had used cable
television for more than 10 years and that it had thus become a habit for them to view cable television. In particular, several
interviewees mentioned that they tended to turn on cable television when alone at home because they were used to cable
television as a company and the familiar voices assuaged their loneliness. Additionally, a number of interviewees mentioned
that they typically viewed cable television with family members because the television set screen was large enough to facil-
itate communal viewing, while they tended to view OTT programs alone because the personal-computer screen was not suit-
able for more than one person. Several interviewees also indicated that they viewed news channels to learn about recent
events in Taiwan and that the cable news channels were familiar to them. Thus, they felt more comfortable viewing those
news channels than MOD’s unfamiliar ones.
However, this study unexpectedly discovered that the respondents perceived OTT to be superior to MOD with respect to
the gratification of habits & news programs. A possible explanation for this unexpected finding is that although OTT did not
offer the popular locally produced news channels of digital cable, it included several news channels operated by Taiwan’s
newspapers. For example, one of Taiwan’s four major newspapers, United Daily, operates an OTT news channel (Hsu
et al., 2015). Two online newspapers that do not have print versions also operate OTT news channels, which are quite pop-
ular in Taiwan. These OTT news channels only provide a few videos and news in text is the major content of these channels.
Furthermore, several cable news channels operate OTT news programs. However, they do not provide direct broadcasting of
their cable news but newsreels for users to search. All terrestrial television stations have collaborations with MOD and their
channels have been included in MOD and also in the paid packages of HamiTV that is operated by Chung-Hua Telecomm
(Hsu et al., 2015). Therefore, it may be that the respondents preferred the OTT news channels to the unfamiliar MOD news
channels. Another possible explanation for this unexpected finding is that with more than 80% of Taiwanese being Internet
users (TWNIC Survey, 2015), the respondents had become used to viewing OTT programs, a behavior that had gradually
become habitual.

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mat. Informat. (2017), http://dx.doi.org/10.1016/j.tele.2017.04.012
 S.-C.S Li / Telematics and Informatics xxx (2017) xxx–xxx 11

5.2. Niche overlap, individual superiority scores and replacement behaviors

As predicted by H3, this study found that the respondents perceived MOD and digital cable to resemble one another more
than OTT with respect to three gratifications. MOD and digital cable use intranets to deliver their programs to consumers.
Thus, the system quality of these two media is better (because it is more reliable) than that of OTT (Hsu et al., 2015). There-
fore, the respondents perceived the two media to resemble one another more than OTT with respect to the gratification of
good system quality. Regarding easy interactivity, although the respondents perceived MOD to be better than digital cable
for this gratification, they considered MOD and digital cable to resemble one another more than OTT. This finding is also ver-
ified by the interview data. For example, several interviewees stated that MOD was better than digital cable because MOD
provided several functions that enabled them to interact with MOD, including the functions of stop, advance, reverse, and
record or the function for bank-transfer services. However, these interviewees also mentioned that these interactivity func-
tions were not easy to operate. That is, these functions were not user friendly, and when the interviewees used them, they
often became confused. Therefore, it might be that MOD provided more interactive functions to users than digital cable, but
that these functions were not user friendly. Thus, the respondents felt that MOD was more similar to digital cable than to
OTT with respect to the gratification of easy interactivity. Regarding good program content, this study found that the respon-
dents perceived MOD and digital cable to resemble one another more than OTT, which is consistent with the scores of com-
petitive superiority. OTT had the highest score on competitive superiority for the gratification of good program content,
while MOD and digital cable did not differ with respect to this gratification (Table 4). This finding again indicates that
MOD experienced success by offering many sporting events and movies to compensate for its lack of the most popular 50
channels in Taiwan because the respondents perceived MOD and digital cable to be equally good with respect to the grat-
ification of good program content.
This study unexpectedly discovered that OTT and MOD had the highest degrees of niche overlap for two gratifications:
ease of use and habits & news programs. A possible explanation for these unexpected findings is that (1) OTT and MOD
are based on the Internet infrastructure that is good at interactivity, and thus, they were perceived to resemble one another
more than digital cable in the gratification of interactivity, and (2) for the gratification of habits & news programs, Table 2
indicates that digital cable had the highest score of niche breadth, which was much higher than OTT and MOD, while the
latter two had more similar niche breadths than with digital cable. That is, digital cable was regarded as the best, while
MOD and OTT were perceived to resemble one another more than digital cable for the gratification of habits & news pro-
grams. These explanations were also verified by the interview data. For example, MOD has been digitalized since its incep-
tion (Hsu et al., 2015). Thus, a number of interviewees stated that several MOD functions were highly convenient, such as the
function that enables them to know whether a program is about to finish or the function that enables them to access infor-
mation regarding a program before viewing it. After digitalization, digital cable also offers these functions (Hsu et al., 2015).
However, it was obvious that the respondents were unaware of the availability of these functions in digital cable.
As predicted by H2, this study found that the individual superiority scores could predict the replacement behaviors
between MOD and digital cable. Table 5 shows that the individual superiority scores of MOD compared with digital cable
were positively correlated with the use history of MOD but negatively correlated with the use history of digital cable. This
outcome indicates that when the respondents perceived MOD to be superior to digital cable, they tended to substitute digital
cable for MOD. Therefore, this study found significant relationships between individual superiority scores and replacement
behaviors within the dyad of MOD/digital cable. For OTT/MOD and digital cable/OTT, this study only found that the individ-
ual superiority scores were negatively correlated with the use history of the inferior medium. For example, the individual
superiority scores of OTT compared with MOD was found to be negatively correlated with the use history of MOD but
not correlated with the use history of OTT. Similarly, the individual superiority scores of digital cable compared with OTT
were positively correlated with the use history of digital cable but not correlated with the use history of OTT. A possible
explanation for these findings is that the respondents perceived digital cable and MOD to be similar. Thus, when they per-
ceived one medium to be inferior, they tended to use the other medium more frequently. However, the respondents may not
perceive OTT to resemble either MOD or digital cable. Thus, when they perceived MOD to be inferior to OTT, they used other
types of media than OTT more frequently. A possible explanation for this unexpected finding is that OTT services were at the
beginning stages with most of the services being free of charge, and thus, they were more complementary than competing
with digital cable or MOD. In particular, some free services such as YouTube and Dailymotion (similar with YouTube but it is
from France) were ranked among the most ten popular services in Taiwan, while other paid services offered programs that
differed greatly from those provided by digital cable or MOD. For example, one paid service has provided live broadcasting of
online game competition, which is popular in Taiwan (Chang, 2016; Hsu et al., 2015). To better understand the competitive
relationships among OTT, MOD, and digital cable, this study conducted three Pearson product-moment correlations in terms
of the use history of the three media. The results indicate that the use history of digital cable was negatively correlated with
that of MOD (r =
0.110, p = 0.013), but that the use history of OTT was positively correlated with that of digital cable
(r = 0.072⁄, p = 0.042) and that of MOD (r = 0.171, p = 0.001). These findings verified this study’s explanation that OTT were
more complementary than competing with digital cable or MOD. Future studies should be conducted to additionally clarify
the replacement behaviors between OTT and MOD or between OTT and digital cable.

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12 S.-C.S Li / Telematics and Informatics xxx (2017) xxx–xxx

6. Conclusions

Using the niche theory as its theoretical framework, this study examined the competitive relationships between three
types of television media—OTT, IPTV, and digital cable. The data analysis yielded three conclusions. (1) Among the three
media, OTT was the most competitive because the respondents perceived OTT to be the best with respect to three of the five
gratifications, while digital cable and MOD were equivalent in terms of competitiveness. (2) Among the three media, OTT
was superior. However, the highest competition occurred between MOD and digital cable because the respondents perceived
the two media to resemble one another more than OTT. (3) According to the data of niche breadth, niche overlap, and com-
petitive superiority, this study classified OTT as a generalist, while MOD and digital cable were specialists. To increase com-
petitiveness, digital cable and MOD must improve their ease of use and the function of easy interactivity, while MOD has one
more task to improve its news programming.
The strength of this study was to combine a telephone survey with intensive interviews to analyze the competition
among the three media. The niche theory is useful to analyze competition among media. However, this theory is limited
in that the quantitative data calculated from the niche formulas do not enable researchers to explain in depth the compet-
itive relationships among different media. By conducting 20 intensive interviews, this study combined quantitative and
qualitative data, which enabled this study to discuss the findings in depth.
Although there are some illegal Chinese OTT channels, they only constitute a very small portion of the OTT industry in
Taiwan. YouTube is very popular in Taiwan, but Dailymotion that is from France also enjoys a high degree of popularity
in Taiwan. Moreover, most viewers of the illegal Chinese OTT channels are college students who live in dormitory. All the
dramas and movies showed in the illegal Chinese OTT channels will be purchased later by cable operators or terrestrial tele-
vision operators, and most people would like to wait until they are showed in cable or television because the quality is much
higher at that time (Hsu et al., 2015).
When interpreting these findings, caution should be exercised because one limitation of this study is that Dimmick (2003)
identifies six resource dimensions in the media industry. However, this study measured only two resource dimensions: grat-
ifications obtained and gratification opportunities. Future studies should examine more resource dimensions to gain a more
complete picture of the competitive relationships between the three media. Another limitation of this study is a lack of dif-
ferentiation of free OTT services from subscription OTT services. Future studies should be conducted by differentiating free
OTT services from subscription OTT services and compare the two types of services in terms of their gratifications obtained
and gratification opportunities to better understand the competition of OTT services with other types of video services.

Appendix A

(1) Niche breadth

2XK  3
PN GOn
Kl
4 k¼1 5
n¼1 Kðu
1Þ

B¼
N
where: (Dimmick, 2003, p. 79)
u, l = the upper and lower bounds of a scale (e.g., 7 and 1)
GO = a gratification obtained rating on a scale
N = the number of respondents using a medium
n = the first respondent
K = the number of scales on a dimension, k = the first gratification scale.

(2) Niche overlap

qffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi2
PN PK ðGOi
GOj Þ
n¼1 k¼1 K
Oi;j ¼
N
Where: (Dimmick, 2003, p. 79)
i, j = medium i and medium j
GO = a gratification obtained rating on a scale for i and j
N = the number of respondents who use both i and j
n = the first respondent.

(3)
PN PK
k¼1 ðm ¼ i > jÞ
SUPERIORITY Si>j ¼ n¼1
N

Please cite this article in press as: Li, S.-C.S. Television media old and new: A niche analysis of OTT, IPTV, and digital cable in Taiwan. Tele-
mat. Informat. (2017), http://dx.doi.org/10.1016/j.tele.2017.04.012
 S.-C.S Li / Telematics and Informatics xxx (2017) xxx–xxx 13

PN PK
k¼1 ðm ¼ j > iÞ
SUPERIORITY Sj>i ¼ n¼1
N
Where: (Dimmick, 2003, p. 80)
i, j = medium i and j
m i > j = the value of a respondent’s rating for those scale items on which i is rate greater than j (the sum of the actual
values)
m j > i = the value of a respondent’s rating for those scale items on which j is rate greater than i (the sum of the actual
values)
K = the number of scales on a dimension, k = the first gratification scale
N = the number of respondents who use both i and j

(4)

X
K
Si>j ¼ ðm ¼ i > jÞ
k¼1

X
K
Sj>i ¼ ðm ¼ j > iÞ
k¼1

Where: (Feaster, 2009, p. 975)

i, j = medium i and j
m i > j = the value of a respondent’s rating for those scale items on which i is rated greater than j (the sum of the actual
values)
m j > i = the value of a respondent’s rating for those scale items on which j is rated greater than i (the sum of the actual
values)
K = the number of scales on a dimension, k = the first gratification scale

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