Wow, it finally happened. After years of rumors, Orion has finally sold its On Media cable TV channels. And not only did they sell On Media, but they sold it to arch-rival CJ. I really am amazed.
For years, On Media was the dominant cable TV channel group in Korea (the industry jargon is "Program Providers"). After cable TV was launched in Korea in 1995, it was much more a whimper than a force for several years. But gradually On Media grew, starting with Tooniverse, and adding music, movie and other channels (including HBO briefly, and of course the mandatory baduk channel). Soon after the turn of the century, the American program Friends made a huge splash in Korea (which On Media did not have), followed by Sex & the City (which it did) and CSI (On Media, too), and soon cable TV was a big deal. Soon, On Media was by far the biggest Program Provider in Korea (at one point accounting for nearly 50 percent of all cable TV watching).
Then CJ decided to add cable TV to its growing list of entertainment and media companies. After a few missteps, it was running neck and neck with On Media, which has been the situation for the past several years.
But strangely, despite On Media's success, there have always been strong rumors that parent company Orion wanted to sell it. Rumor has it that the Orion bigwigs did not like being involved in the entertainment industry, considering it too unstable and too different from the company's core businesses. For a couple of years, there were supposedly serious talks going on between Orion and KT. At one point, a contact of mine even told me it was a done deal. But obviously that never happened.
Then Orion sold off its movie exhibition company, Megabox, so there was something to the rumors. And then the company closed its newly opened production company, Motion 101. And about a year ago, people started to mention CJ as a serious suitor for On Media.
What will it mean for the Korean entertainment industry? Fierce competition between CJ and On Media has helped to boost prices paid for top programs to ridiculous levels. I assume that is going to cool off now (at least until someone else comes along... there is always another challenger to the throne). I assume, too, that CJ is going to start closing some of the overlapping channels, or at least changing some formats.
But my biggest worry is that this deal with further retard the development of original programming on cable TV. Much as cable in the United States has become the source of much of the best storytelling these days (Sopranos, The Wire, Mad Men, etc.), I think Korea needs cable TV to step up and become a player. When On Media produced Bong Man-dae's erotic series DONGSANG IMONG, I had hope that they were going to become something like HBO. Sadly, rather than take the best elements of that series and develop them, cable TV instead chose to focus on the sex, and have instead made endless unwatchable ero-dramas. Sigh.
I do not see the CJ-On Media deal making things any better... But who knows? Maybe this will embolden CJ to start producing something with substance.