The law giving Kobaco control over advertising for the nation’s terrestrial TV and radio stations will be revised by December 2009. The development is the result of a prolonged legal process that began in 2006 with the submission of a petition by Lee Yang-suk, chief executive of Pacific Media & Communications, presenting the arrangement as an infringement of freedom.
In a statement, Korean president Lee Myung-bak outlined plans to adopt private media representatives for terrestrial broadcasting.
“The prices of advertising will rise significantly,” said Steve Yi, director of strategic planning at Grey Korea, explaining that the ruling will mean rates are no longer fixed.
But while the development has prompted consternation from small-scale broadcasters, which have benefited from Kobaco’s even-handed allocation of media space, observers have indicated that the establishment of a replacement state-run governing body is highly likely.
“It’s the logical evolution of ‘transparent economics’, but there’s no way the government will forgo Kobaco’s heavily profitable revenues without a way of re-routing the money,” said Yi, director of strategic planning at Grey Korea. “This could generate more revenue for the government and broadcasters, but will marginalize the non-heavy spenders.”
Kobaco has been in operation in Korea since 1981.
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