Korean TV ad industry set for shake-up

30 July 2009

SEOUL: The regulations governing television advertising in South Korea could be set for a dramatic period of reform, as the country's main political parties debate the possible future course the medium should take.

Recently, the National Assembly, the legislative arm of the federal government, approved a variety of revisions to the rules structuring aspects of the domestic media industry, but some outstanding matters are still to be resolved.

More specifically, the position of the state-run Korea Broadcasting Advertising Corporation, which has been responsible for selling all TV advertising airtime since 1981, is coming under increased scrutiny.

Last year, the country's Constitutional Court ruled that the organisation's effective monopoly was against the Asian nation's constitution.

A forecast from the Korea Cable Television and Telecommunications Association has predicted the introduction of private agencies to fill at least part of its role could boost the value of TV adspend to 2.9 trillion won ($2.3bn; €1.7bn; £1.4bn) next year, compared with 2.76 trillion won in 2008.

However, it also warned that while the major terrestrial broadcasters would see their revenues rise by 326.9bn won, their smaller rivals would register a corresponding decline of 184.4bn won.

Taking a longer-term view, it argued the biggest stations would come to take at least 84% of all TV ad revenues, placing the future of more niche operators, such as those showing regional or religious material, at risk.

Such a development has been prevented thus far as KOBACO has tended to tie inventory sales for larger channels to that for their less mainstream counterparts.

The Korea Communication Commission has stated that as many as three private media sales houses could be established to balance the role of the public sector entity.

However, some opposition parties are said to favour launching just one such private organisation in order to protect the role of specialist content providers.

Data sourced from The Korea Herald; additional content by WARC staff