Four Newspapers Call for “Halt in Rate-Cut Race”

Four newspaper companies including the Kyunghyang Shinmun, the Munhwa Ilbo, the Segye Times, and the Hankyoreh Shinmun, printed front-page articles saying that automatic transaction discounts for subscriptions of Joong Ang Daily and the Chosun Ilbo are distorting the newspaper sales market on March 8.

These four newspaper companies and the Kukmin Daily printed jointly signed notices titled, “Our Perspective on the Recent Subscription Discount Competition.” This notice points out that the 10,000 won subscription rate for an automatic transaction account that Joongang Daily is campaigning for, instead of giving out sales promotions, is an expedient discount to dominate the market by selling below cost. The Kukmin Daily has decided to put off the printing of this notice because of a difference in opinion for the wording of the notice.

The notice says that the Chosun Ilbo is also in the “dumping” competition under similar conditions as the Joong-ang Daily, and it comments on how such a discount is a self-mutilating competition for the newspaper industry, adding “price slashing” on top of other sales promotions including gift and free issue giveaways.

The Joong-ang Daily started additional 2,000 won discounts from the monthly subscription rate of 12,000 won for automatic transaction accounts since January 20. The Chosun Ilbo has a similar offer as it lowered its rate from 14,000 won per month down to 12,000 won right after the Joong-ang Daily started its sales promotion, and it is now taking off additional 2,000 won for automatic transaction accounts.

The sales association under the Korea Press Association with its president Hong Suk-hyun, the president of Joong-ang Daily’s president, led by president Kim Hyo-jae, and the director of the Chosun Ilbo sales bureau, presented a proposal to the Korea Press Association on February 6, saying that “an additional discount on already the below-cost subscription rate by some newspaper companies that threatens the survival of minor printing houses will deal a serious blow to the operation of the newspaper industry.”

The Korea Regional Press Association, organized by presidential faculty of 27 local newspaper companies (led by president An, Hyung-Sun, the president of Kangwon Domin Ilbo), gathered together on February 18 and demanded the Korea Press Association stop and mediate the discount competition, saying that “such competition for any further discount on the subscription rate will bring down the newspaper industry all together.”

Jin-Yeong Lee ecolee@donga.com