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Posted : 2011-12-01 16:47
Updated : 2011-12-01 16:47

Big Bang or big bust?


Members of the National Union of Media Workers hold placards that read ``No New Pay-TV Channels for Major Local Dailies’’ during a demonstration in downtown Seoul, Thursday. The four new channels ― Channel A run by the Dong-A Ilbo; JTBC by the JoongAng Ilbo; TV Chosun by the Chosun Ilbo; and MBN by the Maeil Economic Daily ― have begun airing services after the government took steps to relax Korea’s traditional restrictions on newspaper-broadcasting cross-ownership despite a severe controversy.
/ Korea Times photo by Kim Ju-young

Cable TV channels owned by big newspapers on air with great fanfare

By Kim Tong-hyung

After years of debate, division and cross-industry bickering, the country’s big conservative newspapers finally saw their new pay-television channels on air Thursday.

The four national dailies — the Chosun Ilbo, JoongAng Ilbo, Dong-A Ilbo and Maeil Business Daily — have been desperate to leverage their print dominance to television ever since the Lee Myung-bak government took steps to relax Korea’s traditional restrictions on newspaper-broadcasting cross-ownership, despite concerns over diversity and discourse.

The companies claim their television debut as the media industry’s equivalent of the “Big Bang,” a massive event set to create a wonderful new universe for the market.

Critics, however, point to the thinly-stretched budgets of advertisers to suggest that the channels have bust written all over them.

Of course, the television business is all about instant gratification — you have only a few seconds to impress viewers or be victimized by the tyranny of the remote.

The four new channels — Chanel A (Dong-A), JTBC (JoongAng), TV Chosun (Chosun) and MBN (Maeil) — have engaged in a cut-throat battle for creative talent and entertainers in the past months. It remains to be seen whether their intense competition will open the floodgates for sex, profanity, violence and other predictable flash-and-trash content.

It’s hard to say which channels are most likely to sizzle or fizzle. SBS, the country’s newest terrestrial channel that went live in 1991, toiled with poor viewership for years and was taken seriously only after its 1995 miniseries, “Hourglass,” became a massive hit.

The fate of the new pay-television channels and the hierarchy between them will depend on which network manages to make a content breakthrough first, observers say. And any prediction beyond such obvious assumptions would be considered as a crapshoot at this point.

“The four channels licensed by regulators represent a larger number than the market expected and probably can digest, and it’s easy to imagine one or two of these channels suffering and eventually derailing,” said Hwang Seong-jin, a television industry analyst from HMC Investment and Securities.

“The government has unveiled plans to expand the market by deregulating the advertising industry, though whether the ad market can grow quickly enough to sufficiently support all these new channels before they face crises is far from assured.

The Korea Communications Commission (KCC), the country’s converged telecommunications and broadcasting regulator, licensed a number of new pay-television channels last year in executing its ambitious plans to deregulate the media marketplace.

After competitive bidding, the four newspapers landed the rights to operate channels with “comprehensive” programming, providing original news content atop entertainment, sports and documentaries. Yonhap News Agency, the state-run wire agency, won the license to air a news-only channel to complement the existing YTN.

The four comprehensive programming channels will provide nationwide coverage in a country where more than 80 percent of households have cable or some kind of pay-television connection.

This theoretically provides them with a platform to compete with national open-air broadcasters like KBS, MBC and SBS over viewership and influence.

The aforementioned newspapers combine to control more than 70 percent of the country’s newspaper market by circulation.

Room for more channels?

In pushing forward its controversial plans to license new pay-television channels, the Lee Myung-bak government claimed that encouraging consolidation within the industry was Korea’s only chance at fostering “national champions” that could hold their own against global media giants like Fox and Disney.

However, it’s debatable whether the country has room for more television channels, when the existing national networks and some 200 pay-television outlets are close to sucking dry an annual 8 trillion won (about $7 billion) advertising market.

Each new general programming channel would need to generate advertising revenue of at least 130 billion won per year to survive, according to industry insiders.

But it is questionable whether the market can milk an additional 500 billion won from advertisers, especially when the heightened uncertainty surrounding the world economy is kicking the export-dependent country in the teeth.

In a recent report, Korea Broadcast Advertising Corp. (KOBACO) researcher Park Won-ki claimed that the four comprehensive programming channels and Yonhap’s new news channel would combine for ad revenue of 603.8 billion won next year.

This will come at the expense of newspapers, which will have 46.9 billion won less in advertising money, magazines and radio broadcasters, Park forecasted.

There are signs at least some of the four big newspapers are in over their heads financially in their moves to enter the television business.

During the licensing competition, the KCC had required the bidders for the comprehensive programming channel licenses to provide a minimum of 300 billion won in capital to ensure the financial capacity of the candidate companies. However, the regulator was forced to delay the payment deadline in March after Dong-A and Maeil failed to raise the money in time.

“Should the comprehensive programming channels, backed by the major newspapers, begin to hog a significant part of the advertising market, this would pose a direct threat to the existence of smaller outlets that have been representing a broad range of people and opinions. This would bring a crisis to the level of journalism here by sacrificing diversity,” said Lee Kang-taek, who heads the National Union of Media Workers.

Perhaps, the biggest strength of the new pay-television channels has been the unwavering support of the government. This obviously could turn into a glaring weakness depending on the results of the parliamentary and presidential polls next year.

The big-four newspapers, distinguished by their conservative and corporate-friendly viewpoints, have been the biggest supporters of the Lee Myung-back administration, which have been blasted by the liberal media over the Korea-U.S. free trade talks and other sensitive issues.

And the KCC has been fully behind the four papers as they bumble their way into broadcasting. Compared to their terrestrial rivals, the comprehensive programming channels will be permitted to use more minutes on commercials and enjoy a larger allowance of outsourced content. The new channels will also be allowed to insert ads in the middle of a program, which terrestrial broadcasters haven’t been able to do since the 1970s.

The KCC even went out as far to pressure cable system operators to allocate lower numbers for the new comprehensive programming channels, preventing them from being lost in the land of triple-digits.

It bears further watching if they will continue to be coddled as much by the next administration.
관련 한글 기사

종편, 정말로 빅뱅인가?

수년의 논쟁과 잡음 끝에 한국의 대형 신문사가 만든 종합편성채널이 1일 개국했다.

조선일보, 중앙일보, 동아일보, 매일경제는 2008년 국회에서 신문과 방송 겸영을 전면 허용하는 언론법 개정안이 통과된 이후 신문지면에서 그들이 누려왔던 영향력을 방송영역에서 확장하기 위해 절박하게 노력해왔다.

이들 신문사들은 그들의 방송진출이 국내 미디어시장의 새 지평을 여는 소위 `빅뱅’이 될 것이라 주장한다. 그러나 이미 포화된 미디어광고시장은 이들의 실험이 처참한 실패로 끝날 수 있음을 시사하고 있다.


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