MBC hurting from Kobaco feud fallout

<p>A feud has broken out between Korea's largest commercial TV network, the </p><p>state-owned Munhwa Broadcasting Co (MBC), and KOBACO, the government </p><p>agency that sets advertising rates and acts as exclusive sales agent for </p><p>all the commercial networks. </p><p><BR><BR> </p><p>Events were triggered by an MBC news programme in January, criticising </p><p>KOBACO's monopoly and arguing that MBC should set its own advertising </p><p>rates and sell for itself. </p><p><BR><BR> </p><p>The following day KOBACO suspended sales of MBC airtime and posted </p><p>notices at its headquarters barring MBC representatives from </p><p>admission. </p><p><BR><BR> </p><p>The notices had a defiant tone, stating: "We will fight back against the </p><p>treacherous MBC." </p><p><BR><BR> </p><p>Sales of airtime in MBC's "Special Programmes", which are booked at </p><p>short notice rapidly declined. </p><p><BR><BR> </p><p>The blow was severe as it came before Korea's Lunar New Year holiday, </p><p>traditionally a high point for ad sales in a slow month. </p><p><BR><BR> </p><p>According to MBC, sales of airtime in its "specials" hit zero on January </p><p>20 and 21, while KOBACO sold more than 85 per cent of available airtime </p><p>for the rival KBS2 network and more than 97 per cent for the SBS </p><p>network. </p><p><BR><BR> </p><p>In the same period last year, KOBACO sold virtually 100 per cent of MBC </p><p>airtime. </p><p><BR><BR> </p><p>MBC then broadcast news of what was happening, obliging KOBACO to </p><p>recant, resume sales, and change the managers of the sales division, </p><p>servicing MBC. </p><p><BR><BR> </p><p>But that proved small comfort to MBC, which filed a complaint with </p><p>Korea's Fair Trade Commission and asked compensation for lost sales, </p><p>estimated at four billion won. </p><p><BR><BR> </p><p>"We believe that KOBACO is still hurting our business by manipulating </p><p>prices and failing to pass on airtime orders," said Mr Seong-Che Chong, </p><p>MBC's director of advertising planning. "We are waiting for the FTC's </p><p>findings and then we will decide whether to take KOBACO to court and sue </p><p>for damages," Mr Chong added. </p><p><BR><BR> </p><p>KOBACO declined comment. </p><p><BR><BR> </p>