Our spoiled broadcastersKorea’s three mobile phone carriers spent a combined 2.4 trillion ($2.2 billion) won in a recent round of a government auction to sell licenses for 90 megahertz Long-Term Evolution frequency bands. A megahertz bandwidth had cost them 26.7 billion won.
Currently the three local terrestrial broadcasting companies use a combined radio spectrum of 228 megahertz. Without paying a single won to the government, the broadcasting companies are using a radio spectrum worth 6 trillion won if it was sold at auction.
In return for such benefits as free use of radio networks, terrestrial stations KBS, MBC, and SBS come under stricter scrutiny than other broadcasters.
They are required to play a bigger public role because they benefit from easy access to public assets. But these companies now ask they be allowed to do in-program advertising as much as other paid cable and satellite broadcasters.
The three terrestrial broadcasters argue that it is unfair to ban in-program advertising when they are suffering operational losses due to a falling revenue base.
But their argument is unfair considering the lion’s share they control of the TV and radio advertising market. Of a total broadcasting advertising revenue of 3.7 trillion won in 2011, the three networks and their affiliated cable channels accounted for 72 percent, or 2.7 trillion won. Some 300 other cable and satellite channels vied for the remaining 28 percent of advertising revenue.
The revenue of the three terrestrial networks is also likely to grow in the future. Under new media regulations, terrestrial broadcasters can sell advertising slots on their affiliated PP channels to their popular TV programs like “Infinite Challenge,” “Running Man” and “Gag Concert.”
They also have been pocketing transmission commissions from cable and IPTV channels that carry their programs for three years. That revenue has reached 100 billion won annually.
Non-terrestrial TV channels on the other hand are running their businesses at a loss. It goes against fair competition for the terrestrial TV stations that use public radio waves for free to demand permission to run in-program advertising.
The action should be deferred at least until the imbalance in the advertising market has evened out to some extent. The terrestrial channels are grown-ups in the way that cable and IPTV channels are toddlers. How is it that they whine for so much when they’re competing with babies?
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