[Editorial] New cable broadcasters

From sometime in the latter part of this year, Koreans will have four new cable TV broadcasters of general programs and a news cable channel, all of which will be owned by newspapers and a news agency. The Korea Communications Commission says that the media restructuring will contribute to improvement of broadcasting content and globalization of the TV industry as well as diversification of information and opinions.

The authorities call it a big bang in the media industry, but concerns are expressed over the expected life-and-death competition between the old and new broadcasters in the already saturated advertisement market. Originally only one or two newcomers were to be chosen through the examination of capital soundness and technical qualifications. Yet, it turned out that all three major dailies and the largest business newspaper were selected to operate the general programming channels, and none of the successful applicants was particularly happy.

The KCC chose the easy way, licensing almost all bidders for the general programs sector so as not to disappoint any of the big newspapers. Opposition parties instantly pointed out that the supposedly independent but practically government-controlled communication watchdog offered favors to the major conservative dailies, which happen to have readerships that are generally supportive of the government.

Now the blessing could be a curse as the newcomers have to struggle hard in the limited advertisement market for survival. The nation’s ad market stood at the level of 3.2 trillion won ($2.8 billion) in the mid-2000s and fell to 2.8 trillion won due to the global financial crisis. Ad revenues are growing steadily but not as substantially as to nourish all the new cable broadcasters joining the market.

The new broadcasters were required to prepare paid-in capital to the tune of 300 billion won. Under heavy financial burdens, they will pin much hope on the KCC’s plan to increase the overall scale of advertisement market to 1 percent of GDP from the present 0.7 percent by 2015. To achieve this goal, the communications authorities are expected to lift the ban on the TV advertisement of drugs and some other items but the new cable channels will have to fight fiercely with terrestrial broadcasters to secure a share of the market.

Under the new media laws enacted in 2009, station operators across the country have to include the general programming channels for compulsory transmission, a great privilege considering the large number of the providers of specialized programs. In addition, the new broadcasters will be pressuring the KCC to secure lower channel numbers for them to ensure easier viewer access.

The new entrants already have a combined 70 percent control of the print media market. Confident of increased political and social influences, the new newspaper-broadcasting media groups will now be seeking to gain more favors from the government under the excuse of tough business circumstances during the early stages. But the authorities should be careful in pursuing the goal of fostering “globally-competitive” media organizations, as privileges are hard to withdraw once they are given.

The best policy is leaving things up to the rule of free market, which means competition with the quality of programs in all divisions ranging from information to entertainment and sports. The nation has long experienced distorted information and low-quality entertainment programs provided by a limited number of terrestrial broadcasters. One of the strong wishes of the viewers is that they will not be forced to watch programs produced under the influence of politicized unions at any of the new broadcasters.