[Viewpoint] Big media is the messageOur economy is driven by exports. In particular, manufacturers of information and technology products form the bulk of our outbound shipments.
Irrefutably, our country is one of the world’s IT manufacturing powerhouses with Korean-made memory chips making up about 47 percent of the world market and Korean mobile handsets having a 30 percent market share.
Yet we fail to produce market leaders or valuable brands in the bigger fields of media and entertainment service and content. Korean companies account for a paltry 2.7 percent of the digital content market and 1.5 percent of the software market.
The government recently set out plans to promote the high-value service and content industries to realign our industrial foundation and forge a future for the economy. But local players in the mass media service and content industries are babes in the woods with a low probability of surviving in the global jungle.
Multinational media companies like Time Warner and News Corp., backed by revenues from their home markets, have been making inroads into Asian and other overseas markets through mergers and acquisitions and strategic alliances since the mid-1990s. The media content market is without frontiers.
Because of free trade agreements with the United States and European Union, the local broadcasting content market will become wide open to global players. China has been fostering large media conglomerates through various subsidies in order to stave off foreign incursions into its market.
We, too, will have to move fast to persuade large media groups to become competitive in the global media ocean.
The broadcasting content business is an intricate one. But we have various regulations that hamper companies from advancing in the media market.
The laws and regulations on broadcasting that restrict ownership and cross-management have erected fences around the industry.
As a result, the entertainment and media content industry has failed to grow or build enough confidence to compete in the global market.
The entertainment leader Time Warner rakes in revenues of about 50 trillion won ($42.6 billion) a year. But local pay broadcasting channels cannot earn beyond 500 billion won because an individual channel is barred from netting more than 33 percent of the total revenues of all pay channels.
Furthermore, a single broadcasting company cannot run more than 20 percent of the channels on cable TV network. The current rules completely block the creation of mega-size media and entertainment content producers.
The regulations are redundant and imposed randomly. They frustrate growth in the local industry and ignore trends in the global market, which are geared toward convergence and a laissez-faire approach.
The government must rewrite the broadcasting law and regulations in order to foster growth and increase the competitiveness of the broadcasting content industry.
In the short-term, companies should be allowed to grow through mergers and acquisitions, and in the longer run, they need assistance to become competitive global players.
If the broadcasting content industry fails to sprout, the entire service and content industry will remain underdeveloped, hamstringing growth in the broader economy. The local market will likely be wiped out by global players.
The legendary Korean naval commander Yi Sun-shin defeated 333 Japanese ships with only 13 during the Battle of Myeongnyang, helping to defend the Joseon Dynasty from Japanese invasion in the 16th century.
In the global media battleground, an army of 13 ships doesn’t have a chance. We must start building large carriers and warships in order to defend our market and attain leadership in the bigger offshore market.
The government should, first of all, remove all the regulatory fetters to help local content producers operate more freely and bulk themselves up.
Whether our players will remain as babes or turn into ringleaders in the global media competition remains largely up to the government’s will.
*The writer is a professor of the School of Journalism and Mass Media at Korea University.Translation by the JoongAng Daily staff.
by Kim Sung-cheol