Why Just Two Media Reps?

Having some differences of opinion with the Regulatory Reform Committee about proposed legislation the committee was reviewing on media representation for sales of radio and television commercial air time, the Ministry of Culture and Tourism prepared a revised version, which it submitted to the committee on Tuesday.

Until now, the Korea Broadcasting Advertising Corporation has had a monopoly on media representation. All ad agencies have to buy their air time on the terrestrial broadcast media through the corporation. The gist of the bill under consideration is that this function is to be divided between two newly established media rep corporations: a public one to handle time-slot sales for the three public broadcasting networks － the Korean Broadcasting System, the Munhwa Broadcasting Corporation and the Educational Broadcasting System － and a private one for sales of time on the Seoul Broadcasting System and regional private broadcasting stations.

The ministry, which insisted on a licensing system from the beginning, is said to have proposed extending the committee''s original two-year limit on licenses to three years while keeping the original bill''s two-way system of one public and one private representative firm. Though it does not stipulate how much each broadcaster should invest in the new private entity, the proposal draws the upper limit at 10 percent of the media representative''s total financing.

The revised bill is not much different from the original. It still merely divides KOBACO into two pieces, labeled public and private. The publicly operated rep would be set up as a subsidiary of the corporation and would simply carry out the same work it does now, albeit on a somewhat smaller scale. The public broadcasters will continue to enjoy collecting viewing fees while charging perhaps even higher advertising rates through their new public media rep.

It does not appear that the new system would eliminate such abuses as forcing advertisers to buy less popular times in order to get the slots they really want. We do not see how the new proposal will actually change the system we already have. The supposed competition between the two new entities is not competition in a true sense and will very likely lead to higher advertising rates.

The ministry takes the view that having KOBACO hold a fixed share of ownership for two years will provide a check that keeps the private media rep from raising rates at will. What it actually amounts to is managing a supposedly private company through an already existing public utility. If the goal is to help keep consumer prices down by preventing unreasonable increases in advertising rates, a fundamentally better solution would be to set up a commission to regulate the rates with the participation of appropriate citizens'' groups. This is all the more important when we consider that KOBACO''s participating in the financing of the new private media rep is for a limited time only.

In Italy, advertising revenues of public broadcasters are subject to government approval and, in the case of private broadcasters, no single source can account for more than 30 percent of the total advertising income. Britain also limits a broadcaster''s advertising income from a single media rep to 25 percent.

The Regulatory Reform Committee is supposed to review the revised bill in a full session. Any law that replaces the Korea Broadcasting Advertising Corporation Law should incorporate a proper understanding of what the rapidly changing world media environment will mean for the development of broadcasting in Korea.

by Kim Young-hie