Content Providers vs. Platform Providers in Korea's "Media Big Bang"

As noted in an earlier post and widely covered in the press, many in South Korea are expecting a "Media Big Bang" after the recent awarding of broadcasting rights to new business entities.  Much of the focus in discussions of the "Big Bang" prospect has been on the nation's large newspaper groups and terrestrial broadcasters.  However, as noted by an interesting article in The Korea Times, the recent legal changes and new licenses may herald a new era in which content providers, such as the CJ Group (click on the graphic to see full-size version), may be the big winners, rather than the platform providers (newspaper and television groups) that have dominated in the past.  The article notes the increasing number of outlets or channels for content, with the rise of the smartphone, tablets and the continued convergence of digital media.  The increasing number of channels or "platforms," the argument goes, will only increase the demand for content.  Along with these developments, there has been a notable increase in the viewership of pay television in Korea.  Currently, more than 80 percent of Korean households subscribe to some form of pay-television service. And pay-television’s overall share in viewership rose from 21.5 percent in 2000 to 41.1 percent last year.
According to industry observers, for the four new comprehensive television channels to survive, each must secure advertising revenue of about 500 billion won per year.   As the article notes, this is the real question, especially in an export-dependent economy.

A Media "Big Bang" in South Korea?

As noted by an article in the Joongang Daily, it is the dawn of a new year, and with it hopes for a new era in Korea's media industry, what some are referring to as a "Media Big Bang."  On the last day of 2010, the government announced the selection of local media companies that would be allowed to operate both newspaper and broadcasting businesses for the first time in 30 years.  The so-called "Media Big Bang" is expected to involve not only traditional media, but also online and mobile businesses.
The biggest impact may be on the five companies that won the new broadcasting rights, as shown in the accompanying graphic (click to see a larger version).  There are concerns that the broadcasting sector will become overcrowded with the entry of the new competitors because the amount of advertising revenue is not seen as large enough to support all of them. However, analysts say the move is necessary to promote increased competition in a sector that has been dominated by the three terrestrial broadcasters KBS, MBC and SBS. The Korea Information Society Development Institute (KISDI) said in a recent report that restricting the number of television broadcasters damaged political pluralism, referring to the fact that newspapers were banned from owning television stations in 1980 as the then-military government sought to impose greater control over the media and public opinion. “An excessive restriction on media ownership may weaken the quality of media content,” it added.