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Pres. Park orders to prevent conglomerates’ monopoly in broadcast market

Pres. Park orders to prevent conglomerates’ monopoly in broadcast market

Posted February. 18, 2014 06:52,   


“Conglomerates that recently entered the broadcast market are expanding their influence by increasing channels through vertical integration,” President Park Geun-hye said on Monday. “I hope that you cautiously examine the situation to prevent monopolistic structure from emerging in the broadcast market.”

At briefings on new year’s work plans by the Science, ICT and Future Planning Ministry and the Korea Communications Commission on the day, Park made the remarks, saying, “Fairness and diversity are very important values in the effort to galvanize the broadcast industry. As the broadcast and communications service sector has immense influence on our economy and society and is directly linked to people’s everyday life, it is important to implement balanced policy that meets the expectations of the public.” Park added, “There are worries over possible damaging of diversity in broadcasting as small and medium-sized program providers (PP) see their footings deteriorate.”

Park’s remarks are apparently criticism of the reality that certain conglomerates and terrestrial broadcasters are monopolizing the entire scope of broadcast industry ranging from program production to airing and transmission. CJ E&M, a giant in the media industry, is No. 1 firm in its sector with 18 cable channels. Their combined sales amounted to 682.2 billion won (643 million U.S. dollars) as of 2012, which accounts for 27.1 percent of the overall sales (2.52 trillion won or 2.38 billion dollars) posted by all program providers (PP). In the service operator (SO) segment, CJ Hello Vision is also No. 1 player, and transmits broadcasting service to 27.1 percent of all cable TV subscribers. Amid mounting controversy over "monopoly of broadcasting," the government came under criticism in December last year for rather “giving special favor to CJ” by announcing a policy that eases the cap of a certain PP’s sales from 33 percent to 49 percent.

Along with CJ, three terrestrial broadcasters are also considered another pillar of monopoly in the broadcast sector. Combined sales of the three terrestrial broadcasters, namely KBS, MBC and SBS, amounts to 24.5 percent of the entire broadcast market (12.35 trillion won or 11.65 billion dollars). When combined with sales by their subsidiary PPs, including MBC Sports and SBS Golf, the combined market share of the three broadcast giants’ sales reaches 30.5 percent of the market. Despite this situation, the government decided to introduce an overall advertising quota system that allows territorial broadcasters’ certain programs to add more ads, escalating concern that terrestrial broadcasters’ sales monopoly could further intensify.

“Smartphone prices should not be different as much as several times depending on type of market and places,” Park said on the day. “Improve the system to ensure that people can enjoy quality service at appropriate prices.” The Korea Communications Commission has decided to conduct 24-hour online monitoring to crack down on payment of illegal subsidies for new smartphone purchases, and increase the cap on fines imposed on mobile carriers from the current 1 percent of their sales to 2 percent. The president said, “In industries in which technology and service develop rapidly, including software and the Internet, the government must prepare a system for constant regulatory improvement, drastically innovating regulations."