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(News Focus) Entry of new cable broadcasters heralds media big bang

All Headlines 15:36 December 31, 2010

SEOUL, Dec. 31 (Yonhap) -- South Korea's broadcasting media market is expected to undergo sweeping upheavals, as the nation's communications regulator on Friday announced five winners of new general programming and all-news cable television licenses.

The Korea Communications Commission (KCC) selected Yonhap News Agency as the winner of a new all-news cable TV channel license, while the nation's four major daily newspapers -- JoongAng, Chosun, Dong-A and Maeil Business Newspaper -- were granted licenses for general programming cable TV channels.

The new general-interest cable broadcasters will be allowed to provide multiple types of programs, such as entertainment, news, sports and documentaries, all on one channel. The nation currently has two news-only cable channels -- YTN and MBN, but the latter will be merged into a general program channel to be set up by Maeil Business Newspaper.

KCC Chairman Choi See-joong has repeatedly said that the entry of new cable television program providers would lead to an across-the-board overhaul of the local media sector, paving the ground for the birth of a global media group in South Korea.

He said the next three years will be a period of a "media big bang," as the new general programming and all-news cable channels will launch operations in the second half of 2011 and the nation's three terrestrial broadcasters -- KBS, MBC and SBS -- will shift to digital broadcasting by 2013.

"New cable television program providers are required to promote the quality of Korean culture in China, Japan and Southeast Asia, where hallyu (Korean wave) has been spreading. They also need to boost global competitiveness based on excellent broadcasting content," Choi said while announcing the list of new license winners in a news conference.

Despite the concerted goals of achieving qualitative and quantitative improvements of broadcasting content and diversifying content distribution structures, the new cable TV program providers are expected to run into daunting bottom-line challenges due to the nation's limited advertising market.

Skeptics say it is unclear whether the local television advertising market will grow to the levels envisioned by the government's regulators.

In its 2011 policy report to President Lee Myung-bak, the KCC said it aims to expand the volume of the local broadcasting market from 0.66 percent, 7.5 trillion won (US$6.5 billion), of the gross domestic product (GDP) last year to 1 percent, or 13.8 trillion won, of the GDP in 2014.

But business conglomerates, which account for the bulk of TV advertising, say it is difficult for them to drastically expand their advertising orders in a short period.

"The aggregate advertising volume is unlikely to increase fast. Instead of expanding the pie, conglomerates are expected to simply distribute the limited advertising orders among the terrestrial and cable TV broadcasters," said a conglomerate executive.

Besides the fierce competition for advertising revenues and audience ratings, the new cable TV program providers are certain to struggle with enormous program production expenses, industry experts say, forecasting the number of program providers will be eventually reduced through mergers and acquisitions.

"The local media industry's overall competitiveness will be heightened as fiercer competition among new cable broadcasters will eventually lead to industry-wide consolidation based on mergers and acquisitions," said Park Chun-il, a mass communications professor at Seoul's Sookmyung Women's University.

"The general programming broadcasters should realize that they cannot turn profits solely from the cable television business. Instead, they should strive to improve profitability by providing content to various channels based on differentiated competitiveness," Park said.

Local media experts generally share the view that Yonhap's entry into the cable TV sector will help enhance the nation's information sovereignty and better satisfy the public's right to know, particularly in this era of digital revolution.

"Yonhap's news channel will have a number of unrivaled advantages over competitors, due to a network of more than 60 overseas correspondents in 46 areas worldwide, as well as the nation's most extensive coverage of domestic news and news services in six different foreign languages," said Ryu Hyun-sung, a media news editor at Yonhap.

Yonhap News is South Korea's largest news provider, producing content for newspapers, broadcasters, Internet portals, the government and private enterprises on a scale of about 3,000 news articles per day, the largest volume by far among local news organizations.

With a pool of some 550 reporters, Yonhap's coverage consists of a wide variety of multimedia news content, from articles and photos to video and graphics. With services additionally offered in six foreign languages -- English, Chinese, Japanese, Arabic, Spanish and French, Yonhap is also the key source of news on Korea for the international community.

"Today, news agencies are required to secure as many news videos as possible that can be widely used in various platforms, like mobile and Internet services," Kim Sung-tae, a journalism professor at Korea University, said during a recent seminar organized by the Korean Society for Journalism & Communication Studies.

"The focus of the media environment is rapidly changing from text to video. Against such a backdrop, it is very important to devise measures to ensure that news consumers will better benefit from the introduction of a new (cable television) news channel."

Lee Wan-soo, a mass communications professor at Dongseo University in Busan, said Yonhap News now faces a lot of challenges with the expanding influence of portals, the convergence of broadcasting and communications, and newspaper-broadcast cross-ownership. The professor asked Yonhap to lessen its dependence on text-centered news and to make greater efforts to develop various types of news content for broadcasting and communications services.

Park Jung-chan, president and CEO of Yonhap News, has also stressed that Yonhap's inroad into the cable television news service is aimed at further increasing its contribution to public interest.

"Yonhap News puts a top priority on national interests. We aim to build a global news channel that will correspond to Korea's status as one of the world's 10 largest economies," said Park.


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