Media big bang kicks off

A series of mega-scale economic news updates from the United States has stunned the world. Its central bank has delivered another interest rate hike, media giant Walt Disney announced it was acquiring 21st Century Fox and the U.S. Federal Communications Commission voted to kill landmark 2015 rules aimed at ensuring a free and open internet. The news sent shock waves around the world.

The world’s biggest movie studio, Disney, buying out the industry’s third-largest at $52.4 billion allows the traditional player to gain a strong foothold to challenge online streaming leader Netflix and compensate for its shrinking moviegoers. The acquisition becomes complete after approval from the U.S. government. The competition is expected to turn hectic in the online entertainment market among two behemoths Disney and Netflix, as well as big names in IT such as Amazon, Facebook, Google and Apple that are readying to make their move.

The Trump administration has nixed the two-year-old net neutrality principle, which has been designed to prevent any discrimination against online services and content. The FCC decision is part of Trump’s campaign to erase the legacies of his predecessor, Barack Obama, and pressure IT companies that are traditionally pro-Democrat. The market response has been mixed. The telecommunications carriers are happy, while online platform providers like Google, Apple, Netflix, Facebook and YouTube, which rely on open internet access, are strongly protesting.

Korea will have to address the problem sooner or later. KT and SK Broadband invested heavily to establish internet infrastructure, but the profits were made mostly by portal sites and content providers like Naver. Once net neutrality is broken, much of the free video platforms and social media could be charged and the traffic will slow. Telecommunications service providers could finally find room for lucrative new business.

President Moon Jae-in vowed to keep net neutrality. Free internet access has flourished. But telecommunications companies argue for a reasonable rate system based on use. We must start a debate on finding a reasonable solution. Changes in U.S. policy on online services and rates could affect the domestic market, as U.S. platforms like YouTube and Facebook dominate its mobile video market. There is no future if we do not respond promptly to big trends overseas.

JoongAng Ilbo, Dec. 16, Page 30