Go to content

Industry Report

Industry reports, briefs issued by Samsung Economic Research Institute

The Internet Reshaping Korea's Media Industry

The Internet Reshaping Korea's Media Industry


May 29, 2006

Download The Internet Reshaping Korea's Media Industry PDF email Print

The media industry in Korea is going through a paradigm shift. For the past several years, Korean media consumers experienced a proliferation of news media channels, including the Internet, cable television, and digital multimedia broadcasting (DMB). In the wake of rapid structural changes, conventional media companies such as newspapers, network TV stations, and record labels are losing ground to new entrants like online portals, which are wielding more influence in the market.

One indication of this trend is that newspaper circulation and television ratings have steadily declined since the late 1990s. In particular, the percentage of households subscribing to newspapers plummeted to 48% in 2004, down from 65% in 1998. The overall rating of free-to-air network television was 33.8% in the first half of 2005, a steep drop of 14.1 percentage points from 47.9% in 1998.

Prime-time news programming also witnessed the exodus of viewers to other news sources. The ratings of the 9 O'clock News, the main news program of Korea's state-owned KBS channel, fell to 18% in January 2006, down from 27% in 1988. Similarly, MBC's News at Nine has also tumbled in ratings, from 33% to 9% during the same period.

In contrast, new media such as the Internet, DMB, and cable television are emerging as strong players. Their combined advertising revenue increased to 1,059.9 billion Won (approximately US$1.12 billion) in 2005, 2.5 times more than they earned in 2002. Currently, they account for 15% of Korea's advertising market, up from 6.5% in 2003. Of this figure, the advertising sales by Internet media companies shot up to 566.9 billion Won in 2005, a 44.4% increase from the previous year, surpassing 486.8 billion Won earned by cable television stations.

Notable is also the rapid growth of Internet portals. In 2005, the combined sales revenue of Korea's four major portal operators (NHN Corp., Daum Communications, SK Communications, and Neowiz Corp.) reached 822 billion Won, almost matching the combined revenue of 1 trillion Won of the big-three newspapers (Chosun Ilbo, Dong-A Ilbo, and JoongAng Newspaper).

Another factor illustrating the rising prowess of online portals is that more and more people get their news from the Internet. According to a study by an online advertising consultancy, the percentage of people using the Internet as their main source of daily news was 46.7%. Of the respondents who answered positively to the question, 90% said they regularly read news articles through the portals.

Even in TV business, the Internet and DMB are in close competition with network TV channels. For example, about 1.6 million viewers watched the quarterfinal games of the World Baseball Classic through Yahoo's website, while 1.4 million sat in front of TV sets. Due to the popularity of the WBC games, DMB service providers enjoyed rising number of new subscribers, with 30,000 for the two week-long game period, equivalent to that of average monthly subscribers.

For full text, click the pdf icon above.
Go to list