Friday, November 28, 2008

We'll Be Right Back, After This Word
— And Why That's a Good Thing

Some very happy news from the Korean courts Thursday -- Korea's Constitutional Court ruled that the state-run television ad agency KOBACO is unconstitutional.

Now, that might seem like an obscure thing to be happy about, but I assure you this is great news. You see, the Korea Broadcast Advertising Corporation currently is responsible for all aspects of TV advertising in Korea. It sets the rates and times for ads, collects the money and doles it out, all in one shop. And only KOBACO is allowed to do this. The result is the highly regulated, uncompetitive, and bizarre thing we call Korean television.

Of course, KOBACO justifies what it does in the name of "fairness" (as bureaucrats always do). But the result of KOBACO is anything but fair.
  • Advertisers get very little control over when their ads air.
  • TV stations do not get as much ad revenue as they could on the open market.
  • Neither advertiser nor broadcaster has much flexibility over the ad market.
  • Therefore TV stations have much less money to create programs, so their programs are that much cheaper and cheesier than they could be.
  • Also, there is little incentive to experiment with program styles, since the channels' revenues do not vary much, regardless of what they air.

    Years ago, a former ad guy told me that KOBACO is a "zombie corporation" -- that is, it is already dead, but it keeps on moving. In fact, the government passed legislation what would have ended KOBACO's monopoly back in 2001, but that was not enough to kill it either.

    Everybody knows that it is a relic from Korea's authoritarian past, but the government loved KOBACO, and was loath to give it up. It was set up under Chun Doo-hwan to keep control over Korea's television stations (way back before SBS began and long before anyone had even thought of cable TV).

    The government tried to dress up KOBACO and make it pretty -- for example, it must use a certain percentage (around 6%) of revenues for public projects. The Press Center, the Korean Broadcasters Center, and the Seoul Arts Center were all built using KOBACO money (and the Arirang TV building).

    With KOBACO's monopoly coming to an end in 2009, this could potentially really open up the Korean TV markets. Which should mean more money for the TV channels, more money for TV programs, and then hopefully better TV programs. And, if we are really lucky, we might get some more diversity, too.

    Anonymous said...

    oh i did not know korean tv worked liked that. i work in the ad business and it's very interesting. this will now definitely create more competition between the stations as well i assume.

    oranckay said...

    I disagree here on many points, but I really don't know which points those are and how much I disagree because I don't really know the issue. Beyond this...

    One of most annoying things about American television is the advertising every what, 10 or 15 minutes or so? Not that Korea or many other countries have less advertising, they just don't show you an hour worth of programing in four quarters. As I understand it, and I can't confidently say I do, this decision is going to change that. Instead of watching hour-long Korean television programs from start to finish, we're going to get brief segments, and be subjected to advertising at least three times during each hour long program.

    Also, while KOBACO may be a Fifth Republic relic, a lot of the things Chun did after the slaughter were attempts obviously not at "fairness" because he cared about being fair, but to appease popular disgust with him by appealing to what the masses felt ensured fairness. The easiest example of this would be private extracurricular tutoring of the 과외 (as opposed to hakwon) variety. It's widespread, but it's illegal, and whatever we think of that contradiction, a lot of vehemently anti-Chun progressives favour the ban to this day. Another example in education would be pyeongjunhwa, the policy of "equalization." LMB's people in edu are making it their mission in life to abolish that, as seen in the program about ranking secondary schools, disclosing standing, etc.

    Similarly, re KOBACO, a lot of progressives have long been pleased with it. This Hani article might be worth your attention.

    "Since its establishment in 1981, KOBACO has monopolized the advertising sales market for television and radio networks. While it is generally acknowledged as fact that KOBACO’s monopoly has undermined competition within the advertising industry, many experts agree that the KOBACO system serves to ensure the public interest in South Korea by allocating ads to smaller broadcasters and curbing the amount of influence advertisers have over broadcasters."

    What bothers me most is the timing. Do you know anything about who was behind the 'constitutional petition'? I don't. Anyway, on a different front, there is an effort now to get the law prohibiting jaebeol from owning broadcasting companies declared unconstitutional, and while that's just rumor, what is known is that that the jaebeol have been pushing for it (Samsung owned one of the KBS channels long back, and Chun took it from them), and "ruling camp" (not necessarily office holders, but ppl associated with LMB admin and GNP) are pushing to have the law revised to allow as much. Perfect timing.

    Hani cartoon today puts this in perspective.

    But damn you, you made me go to Hani english site for the first time in months.

    Mark Russell said...

    Hi Barbarian. Thanks for the great comments and links.

    I think I understand where you are coming from and the position of the pro-KOBACO people, but I respectfully disagree.

    One, I dislike government meddling in general and usually prefer consumer choice. At least if a company tried forcing me to do something and I don't like it, I can go elsewhere.

    Two, someone has got to pay for the programs on TV. The current system is incredibly inefficient. No one likes ads, but in Korea it is very easy to miss them altogether. Advertisers know this and so rates are low. So the TV stations do not make much money. Basically, you get what you pay for, and in Korea, KOBACO ensures that you don't get much.

    As for possible darker forces lurking behind the ruling... Well, Lee Myung-bak has made it clear he is living in a 1980s jaebeol world. There is much he does that I disagree with. But I think it is a mistake to confuse the political forest for the policy trees.

    The big issue here is government control of the media. In Korea, the government has way too much control over all the nation's media, through a whole host of means. Sure they always justify it as "watching out for the public's interest", but what it really means is control. I can take care of my own interest, thankyouverymuch.

    But now that I have been damned, I need to think up more stories that will force you to read annoying newspapers to retort. ;-)