re new TV channels curse in disguise?

Big newspapers vying for TV entry,but financial outlook dim By Kim Tong-hyung The future of the country’s media could industry depend on whether Viagra ever gets to be advertised on television, or at least that’s what the Korea Communication Commission (KCC) says. The broadcasting and telecommunication regulator has been spearheading an ambitious attempt by the Lee Myung-bak government to deregulate the Korean media marketplace, which began with axing the traditional cross-ownership restrictions that prevented the same media companies from owning television, radio and print assets. And the country will take a significant step toward unplugging big media by the end of the year when the KCC announces the winning bids for new cable television licenses, which has major newspapers here entangled in a cutthroat battle. It bears further watching, however, whether the debut of the new television stations will represent a rebirth. There are concerns that the lack of an advertisement market may deprive the new channels of a viable financial foundation, and this has policymakers desperate to squeeze more out of advertisers and permit more of them to access national airwaves. Most notably, the KCC is pushing to remove the shackles that prevented hospitals and makers of prescription drugs ― including sleeping pills, contraceptives and impotence drugs ― from advertising in print outlets and television. Another possible move is lifting the ban on in-program advertisements for national television, which happens to be one of the very few things viewers would say that the old military dictators got right. ``Expanding the advertisement market is crucial for the growth and development of the media industry. We will continue to work with related government agencies and ministries to ease the current regulations on products approved for advertisements on each medium, including bottled drinking water, medical institutions and prescription drugs,’’ said an official from KCC’s policy planning division. ``This doesn’t exactly mean that we will be lifting the advertisement restrictions on prescription drugs entirely as the new rules will be adjusted for each type of product. We believe there should be lesser restrictions on prescription drugs related to urgent health needs, such as asthma medicine and drugs for emergency post-coital contraception,’’ he said. At least, viewers have grown accustomed to the barrage of commercials that interrupt their favorite shows on cable television. But the idea of relying on Viagra and Cialis to inject new life into the media market, as they do in the bedroom, has already set off a firestorm of criticism. The Korean Medical Association (KMA), a lobby of physicians, and the Korean Pharmacist Association (KPA) are among a slew of medical industry groups denouncing the KCC’s plans, which they claim could put consumers at larger risk of drug overuse and abuse. ``This is a serious matter concerning the health of people, but the government is approaching the issue just with market logic and its intentions for deregulation,’’ said a KMA spokesman. ``Needless to say, a doctor wouldn’t prescribe the same medicine for every patient suffering the same kind of medical condition. There is a danger that the advertisement of prescription drugs could misinform many consumers and lead to unnecessary conflict between doctors and patients.’’ Media bloodbath Newspapers, which continue to reel from their decaying business model, hope that advancing into the broadcasting market will allow them an opportunity to establish a more reliable source of revenue. However, it appears that only the biggest papers have the financial muscle to take a shot at the television business. The Chosun Ilbo, JoongAng Ilbo and Dong-A Ilbo, the three largest dailies, have declared aspirations for ``comprehensive programming’’ channels, which will be allowed to produce and broadcast original news content as well as entertainment, sports and documentary programs. And they will be getting extra competition from business papers the Maeil Economic Daily and Korea Economic Daily and the cash-rich cable industry heavyweight, Taekwang Group. The KCC is also opening new spots for news-only cable channels to complement the existing ones of YTN and MBN. Five media companies ― Yonhap News, Herald Media, Money Today, Seoul Newspaper and CBS ― are in play for the news-only channels. It is expected that the new channels will have their debut sometime during the latter half of next year. Critics raise concerns that the compromised diversity in the ownership of news organizations could hurt discourse, especially at a time when the line between profit and reporting is becoming blurry in a toughening environment for the dead-tree media. The government contends that deregulation is crucial for the growth of the media industry and the emergence of globally-competitive players that could hold their own against Disney and Fox. Well, viewers apparently won’t protest too much about getting a larger bundle of channels for their monthly television expenses. But, in spite of all the speechifying about a reshaped and bulked-up media industry, it’s telling that the government is failing to offer a convincing answer to the most important question of all ― will the new broadcasting outlets ever become sustainable businesses? And clearly, the maxed-out advertisement budgets of companies doesn’t inspire much confidence. KCC’s original plan was to entirely scrap the advertisement business of public broadcaster KBS, the country’s biggest television station, and have advertisers milk the new channels instead. In return, KBS was to benefit from a significant hike in the country’s compulsory television license fee, paid by every Korean household with a television, which the KCC had planned to raise from the current 2,500 won (about $2.16) a month to around 6,500 won a month. Naturally, the plan touched off a massive public backlash, and a beleaguered KCC is now reviewing KBS’ plans to raise the license fee to just 3,500 won, to cover the costs for the impending digital television switchover, while keeping its advertisement business intact. So the KCC is forced to look for the money elsewhere, and hence, all the talk about prescription drug advertisements and in-program commercials. It’s debatable whether the additional influx of advertisers will be enough to carry a new wave of television channels, when there are already around 190 existing broadcasters contesting in an advertisement market worth about 3 trillion won annually. ``The broadcasting market is already a sea of red. Imagine if three or more comprehensive channels enter the arena to add competition. The result will be a bloodbath,’’ said Kim Min-ki, a professor of mass communications at Soongsil University. ``Presuming that each comprehensive channel, which are to compete with the big national terrestrial channels, take around 400 to 500 billion won in advertisement revenue, this would kill off the smaller channels and hurt the diversity in discourse. The next three to five years will be a chaotic time in the industry.’’ Gong Tae-hyeong, an analyst at Samsung Securities, said that the value of the comprehensive cable channels as advertisement platforms will be lower than that of the existing terrestrial channels. ``The new channels have yet to prove their ability to consistently provide quality content, and if multiple broadcasters are licensed, it would be hard for them to differentiate from each other in the competition for viewership,’’ he said.

thkim@koreatimes.co.kr