By Kim Tong-hyung
Staff Reporter

Who are the biggest winners from the passage of media-related bills railroaded by the governing Grand National Party (GNP)?

Three big conservative dailies are expected to enjoy big windfalls, but not exactly in the way that is widely believed.

The new rules will ease cross-ownership restrictions on newspapers and television stations. The three daily newspapers ― the Chosun Ilbo, JoongAng Ilbo and Dong-A Ilbo ― are considered the main beneficiaries.

The three, which combine for about 70 percent of newspaper readership, have been looking to leverage their dominance to other markets as the traditional newspaper market is shrinking with the rise of the Internet and other new media.

All three papers are distinguished by their conservative outlook and often are believed to be "uncritical" of the Lee Myung-bak government. Seeing the latest change as payback of sorts, the largest opposition Democratic Party as well as media outlet unions and the liberal base are arguing that the three newspapers will take control of national television stations and create the worst kind of government-media collusion.

MBC, one of three big television networks, is most talked about as the target of a takeover. It is 70-percent owned by the state-run Broadcast Culture Foundation. The Jeongsu Scholarship Foundation, led by former GNP Chairwoman Park Geun-hye, holds the remaining 30 percent.

The current board members of the foundation end their three-year terms in August, and critics of the new media law claim that they will be replaced by pro-government figures in an upcoming reshuffle. They say the step will eventually lead to the "gift-wrapping" of the television station for one of the three leading newspapers.

Industry watchers, however, see this scenario as unlikely. Despite their clout as major news outlets, it would be hard for any of the "big three" to cough up the several trillions of won required to operate a terrestrial channel, no matter what form of consortium they could create.

Besides, the traditional television market is also being pummeled by the rise of online media and other new pay TV alternatives.

In addition, it is unlikely that any of the three would want to take over terrestrial television stations, considering the expensive digital transition slated for 2012.

Obviously, the newspaper giants are more interested in finding a cheaper alternative in cable news and entertainment channels, which will help them win a significant television audience and advertiser pool.

The Dong-A, the smallest of the three, even used an editorial to declare that it was not interested in MBC.

"The Chosun posts 500 billion won in annual revenue, and it's hard to imagine it will be forming a big consortium to gobble up MBC or KBS2," said a KCC official.

"We have yet to see a big cable television channel competing with national television networks in influence, and this is what the newspapers are more likely thinking about. They will be competing with terrestrial networks over the same group of advertisers."

Among the big three newspapers, the JoongAng seems the most obvious about its interest in cable television. The newspaper has extensive pay TV experience, operating its first cable channel in 1999, and recently launching entertainment channel QTV.

Sources are also saying that the Dong-A is currently recruiting television program directors, while the Chosun, which has been toying with the idea of making a business news channel for years, is also likely to have its own television blueprint.

It remains to be seen whether the newspapers, which apparently don't have enough resources on their own, would be able to find the right business partners to fulfill their television dreams.

Industry watchers say the newspapers will likely have to raise at least 500 billion won to launch a comprehensive programming channel and 100 billion won for a news-only channel.

Cable TV operators are struggling to stay alive in a saturated pay TV market, although 15 million households are subscribers. It is still unclear whether the newspapers will find enough interest in other parts of the corporate world.

The country's biggest family-owned conglomerates, such as Samsung, Hyundai, LG and SK, have also yet to show any interest in television.

CJ Group, which is in talks to acquire ON Media, a major cable television company that operates a variety of popular movie and entertainment channels, is likely to go its own way.

CJ owns CJ Hello Vision, which has more than 2.52 million subscribers through 14 system operators, and controls CJ Media, the No.2 program provider that has popular channels tvN, CGV and Mnet.

The absorbing of ON Media, which has 10 channels including OCN and ON style, will result in the birth of a mega pay-TV network that could rival terrestrial networks in influence

"If there is a private company that could actually have a piece of MBC or KBS2, it is much more likely to be CJ than any of the big-three newspapers," said an industry analyst, who asked not to be named.

thkim@koreatimes.co.kr