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South Korea: World Cup and Monopolistic Gambling

A biggest gamble in South Korean broadcasting history was made by SBS (Seoul Broadcasting System) who purchased the exclusive World Cup broadcasting rights from FIFA with 63 million US dollars. As Korean national soccer team made to the round of 16, SBS, one of three major TV terrestrial networks in Korea will likely to get a bigger share of victory. The chance of SBS keeping the upper hand in this industry in a long run, however, is unpredictable as Korean people respond angrily over SBS World Cup coverage, blaming it as a low blow of scrapping off people rights’ on channels selection.

An Egloos blogger Heynews commented how speculative the SBS’s investment on the World Cup was, adding it may never be able to reimburse hemorrhaging money it spent on the transmission rights. However, as Korean national soccer team made to the round of 16 by today, news articles on a substantial increse of SBS's profits are pouring over.

SBS 역시 대한민국 대표팀의 운명과 함께, 적나쟈 흑자냐의 기로에서 왔다갔다 하기 때문이죠. 증권가에서는 대한민국이 16강 이상의 성적을 내면 순 이익을 기록하겠지만, 예선 탈락하면 적자를 낼수 있다고 분석하기도 했습니다.

SBS shares its’ fate with the Korean soccer team, standing in a middle of crossroad swaying to and from the red and the black. Korean stocks markets have predicted that SBS will make a net gain as long as Korean team is qualified for the round of 16 but when they disqualified, SBS will make a loss.

The exclusive transmission rights alone had cost 75 billion Korean Won (USD 63 million). When other expenses like live broadcasting expense in South Africa is added, the total expenditure SBS had to spend reaches around 108.6 billion Korean Won. (USD 91 million) SBS has hurriedly piling up the money by selling advertisements; a 15 seconds commercial on the day of the Korean match reaches around 92 million Korean Won (USD 80 thousand), making it the priciest ad in Korean broadcasting history and the total revenue SBS made on a single match day by ads tops 650 billion Korean Won (USD 55 million), Herald business reported quoting KOBACO(Korea Broadcasting Advertising Corp.)

People'a anger on SBS would be weird to outsiders like Americans who used to watch media giants like NBC exclusively broadcasting Olympic and other sports event. SBS decided to prohibit several places like local restaurants and the gigantic TV screens on the Plaza to broadcast the World cup without paying for it, an act customarily condoned in the past regarding people's high interest on the match. A Naver blogger Woony expressed her anger over the SBS’s behavior of shoving its’ exclusive broadcasting rights up everybody’s nose while  neglecting its primary purpose as citizen’s media.

또 SBS에서 아무도 원하지 않는 월드컵 단독중계를 한다고 하니 국민들은 물론 저도 화가 납니다. 더욱 화가 나는 것은 SBS에서 사람들이 많이 모이는 이벤트 행사장 뿐만 아니라 레스토랑에 원래 달려 있는 TV 에서도 월드컵 중계권을 사야 경기를 보여줄 수 있다고 호텔들이나 대형 음식점에 공문을 보냈다고 해요…손님들이 월드컵 경기를 틀어달라고 할 때가 분명히 있을텐데, 어떻게 모든 대형 음식점들과 호텔에서 그 비용을 다 대라는 건지..날이 갈수록 언론사의 기능을 상실하고 독점권만 가지려는 SBS 가 참 안타깝고 씁쓸합니다.

As SBS decided on doing this World Cup exclusive broadcasting, which no body wants, I am angered along with other Koreans. What made me more furious is that SBS even sent a letter to hotel and big restaurant chains that they need to buy the World Cup transmission, not only for those screens displayed for World cup show events but for those TV screens already attached in the restaurants…There must be some customers asking them to tune on the World Cup broadcast. How every restaurant and hotel can pay for all those broadcastings. It is deplorable to watch SBS gradually forgetting its mission as media and being so occupied in obtaining the exclusive rights.

Most of hotel chains have made neither positive nor any official statement on this matter, except the Imperial Palace Hotel who bought the transmission rights even before the World Cup started. The hotel’s chairman is Cha Du Ri’s (Korean national football player and the son of legendary football player Cha Bum Kun, or Cha Boom) father-in-law who will also be hanging a gigantic poster of his son-in-law soon on the hotel exterior, according to South Korea’s Chosun Ilbo.

Though the Korean team’s entering the round of 16 will momentarily stifle people’s complaints over SBS, it does not mean the anger will be forever forgotten. An Egloos blooger STWorld commented SBS had deprived of people’s choice on their favorite commentators while a blogger Zihuatenejo expressed that it is unpleasant to let SBS decide what to watch when there are two matches happening simultaneously.

SBS 가 단독 중계에 나설 경우 모든 경기를 생중계해주는 것은 불가능해진다…결국 시청자로서 ‘내'가 기대하는 경기를 골라보는 것이 아니라 SBS가 중계해주는 경기만을 지켜볼 수밖에 없다.

When SBS does this exclusive broadcast, it becomes impossible for me to broadcast every match. Even though I am viewer, I cannot watch matches I choose to, but had to stare at matches what SBS choose to be watched.

Many speculation on the reason of SBS making this unpopular decision. Naver blogger Saheilu who claims he had a discussed this issue with SBS journalist said the exclusive coverage is a SBS’s desperate move for a survival in this rapidly changing media industry.

우선 SBS 기자는 “지상파의 위기”를 언급했습니다. 현재 케이블티비 가입자 수는 1,500만 명에 이르며 2009년 80%의 보급률을 기록했습니다. 게다가 방송과 통신이 결합하고, 각종 뉴미디어가 생겨나면서 지상파 방송은 경쟁력을 크게 상실했다는 것입니다. 결국 관건은 변화하는 미디어 업계에서의 경쟁력 확보인데 그 답은 다른 방송국, 다른 매체보다 확고하게 나은 콘텐츠 경쟁력에 있다고 합니다. 그 중 하나가 국제 스포츠 경기 중계권 확보라는 것입니다.

That SBS journalist first pointed out the ‘crisis of the terrestrial TV network’. The number of people registered for the cable TV reaches around 15 million and in 2009 alone, it reached the 80 percent of TV population. Moreover as the convergence between the broadcast and the communication technology speeds up and New media are emerging, the TV terrestrial network have drastically lost it’s competitiveness. The breakthrough TV network has chosen to regain competitiveness in changing media industry is to make a strong contents which cannot be imitated by others; which in this SBS case, is the (exclusive) transmission rights in major international sports events.

Though the old strategy of ‘Bet big and win big’ seems working for SBS for the moment, a more creative approach would be needed to gain people's approval and to survive in the new media landscape.

4 comments

  • Lynn

    I am watching the coverage in Ulsan, Korea. I think no effort is made to help any other ethnic group, it would be nice if the flag of the country was put next to the Korean name of country, so the rest of us not having the luxury of knowing the Korean language would at least have a heads up. It would have been nice if the opening ceremony, could have been listened to, instead of the constant chatter of the Korean announcers. Because I am from Canada and these events are constant in our lives, I am surprised at how little programming is going to the education of the television viewers about South Africa. Usually its part of the package, games and interesting story lines of the host country. I really think thats very sad. I would have liked to know more.

    • I understand exactly what you are saying. There are some angry responses online over the opening ceremony coverage which stuffed with commercials (30 ads alone during the entrance ceremony) replacing almost every minute that should be spent on introducing other countries and teams.

  • “that it is unpleasant to let SBS decide what to watch when there are two matches happening simultaneously”
    Same here. Yesterday, they showed Argentinia – Greece on national TV, even though I would have liked to see the South Korean game and the South Korean game was really much more interesting. Yet, they only switched to the game when there was a goal :(

    SBS however, does not behave any different than FIFA who also forbids hotels, local companies and anyone to use the term “World Cup 2010” and similar stuff for advertisment. There have been even incidents (I think over here in Germany at WC 2006) when FIFA sued people for selling “World Cup sausages” or something like this. The whole tournament is just an extraordinary example for the purest form of capitalistism -> everything has to be quantified and paid for, even if it is totally senseless and should be public.

    • Yes, in Korea SBS showed the Greece VS Argetina match on a tiny screen (less than a quarter size, placed on the right corner of the regular screen) only when they scored a goal. And about that German case- Wow. I never knew about that ‘sausages’ incident. What a hilarious, ludicrous case! I want to find a link to that story/news article.

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