Opposition Blasts Plan to Allow Private Firms to Handle TV Ads
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By Kang Hyun-kyung
Staff Reporter
Lawmakers of the main opposition Democratic Party (DP) urged President Lee Myung-bak to scrap plans to allow private media representatives to buy advertising time and space from media owners.
Under the plan, the jurisdiction of selling media space and advertising contracts will be transferred from the Korea Broadcasting Advertising Corporation (KOBACO) to private agents called media representatives. The private firms are brokers between media owners and national advertisers.
Rep. Jun Byung-hun told reporters that only three major television networks such as KBS, MBC and SBS would benefit from the proposed plan.
At a National Assembly committee meeting, Jun said print media and the remaining broadcasters would experience a loss of advertising revenue.
The accusations came a day after reports that the government plans to transfer jurisdiction to private entities by December 2009.
Officials from the presidential office, the Korea Communications Commission, the Ministry of Culture, Sport and Tourism and the Ministry of Strategy and Finance met Wednesday to discuss the privatization proposal.
They are scheduled to sit down with leaders of the governing Grand National Party (GNP) next Monday to review the plan before announcing it two days later.
The jurisdiction transfer plan was proposed after KOBACO's intervention in advertising and TV commercials sparked controversy that the public firm was flexing its muscles in the media industry.
For broadcasters and print media, advertising is a major financial resource and their heavy reliance on advertising would inevitably lead them to seek a cozy relationship with the public firm.
Experts proposed private firms play the role as an alternative.
DP lawmakers, however, said the privatization plan would do a disservice to the overall media industry.
"The quality of television programs would be lowered as the major stations would engage in a bloody war to raise viewer ratings, a critical element advertisers consider when making a TV ad decision", said Rep. Jun.
The DP lawmaker said the privatization plan would also deal a blow to minor broadcasters as well as print media.
"Under the plan, local television networks are expected to see a decrease of 20 percent in profits, and major print media outlets will lose roughly 27 percent due to a possible decrease in advertising contracts", Jun said.
According to KOBACO, businesses' spending for media advertising has seen expanding growth from 1974 to 2006.
Advertising spending has grown twice as much as gross domestic product.
TV commercials accounted for 30 percent of the entire advertising spending and the share has not changed between 1999 and 2006.
However, the share of advertising in print media has decreased from 40 percent to 30 percent during the same time period.
A KOBACO report also said that three major television networks dominated corporate advertisements in TV, accounting for 87.4 percent.
Local television networks accounted for 8.4 percent, followed by religious television channels with 4.2 percent.
The report concluded that the share of the three major television networks' dominance in TV ads will be higher if media representative firms take over the jurisdiction of selling media time and space.
Staff Reporter
Lawmakers of the main opposition Democratic Party (DP) urged President Lee Myung-bak to scrap plans to allow private media representatives to buy advertising time and space from media owners.
Under the plan, the jurisdiction of selling media space and advertising contracts will be transferred from the Korea Broadcasting Advertising Corporation (KOBACO) to private agents called media representatives. The private firms are brokers between media owners and national advertisers.
Rep. Jun Byung-hun told reporters that only three major television networks such as KBS, MBC and SBS would benefit from the proposed plan.
At a National Assembly committee meeting, Jun said print media and the remaining broadcasters would experience a loss of advertising revenue.
The accusations came a day after reports that the government plans to transfer jurisdiction to private entities by December 2009.
Officials from the presidential office, the Korea Communications Commission, the Ministry of Culture, Sport and Tourism and the Ministry of Strategy and Finance met Wednesday to discuss the privatization proposal.
They are scheduled to sit down with leaders of the governing Grand National Party (GNP) next Monday to review the plan before announcing it two days later.
The jurisdiction transfer plan was proposed after KOBACO's intervention in advertising and TV commercials sparked controversy that the public firm was flexing its muscles in the media industry.
For broadcasters and print media, advertising is a major financial resource and their heavy reliance on advertising would inevitably lead them to seek a cozy relationship with the public firm.
Experts proposed private firms play the role as an alternative.
DP lawmakers, however, said the privatization plan would do a disservice to the overall media industry.
"The quality of television programs would be lowered as the major stations would engage in a bloody war to raise viewer ratings, a critical element advertisers consider when making a TV ad decision", said Rep. Jun.
The DP lawmaker said the privatization plan would also deal a blow to minor broadcasters as well as print media.
"Under the plan, local television networks are expected to see a decrease of 20 percent in profits, and major print media outlets will lose roughly 27 percent due to a possible decrease in advertising contracts", Jun said.
According to KOBACO, businesses' spending for media advertising has seen expanding growth from 1974 to 2006.
Advertising spending has grown twice as much as gross domestic product.
TV commercials accounted for 30 percent of the entire advertising spending and the share has not changed between 1999 and 2006.
However, the share of advertising in print media has decreased from 40 percent to 30 percent during the same time period.
A KOBACO report also said that three major television networks dominated corporate advertisements in TV, accounting for 87.4 percent.
Local television networks accounted for 8.4 percent, followed by religious television channels with 4.2 percent.
The report concluded that the share of the three major television networks' dominance in TV ads will be higher if media representative firms take over the jurisdiction of selling media time and space.
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