Growth in revenue from online content licensing stands out across the entire newspaper industry. Revenue from sources other than online content declined in comparison with the previous years, but advertisement remains a major source of income for many news media. Print newspapers, through years of declining readership and subscription, have diversified their income stream to make up for the losses in sales. In 2018, the newspaper industry relied the most on advertisement as a source of income, with advertisements accounting for 60.1 per cent of the total revenue of print newspapers KRW 1,990 billion. This was an increase from 59.6 per cent of the total print dailies’ revenue coming from advertisement in 2017. Only 11.8 per cent of the total revenue in the print newspaper industry was from sales (KRW 390 billion) in 2018, and income from online content licensing accounted for 8.2 per cent of the income (KRW 272 billion). Other additional businesses accounted for 19.9 per cent of the total revenue in the daily print newspaper industry in 2018.
Advertisement is also the biggest source of revenue in the online newspaper industry, accounting for 61.5 per cent of the total industry revenue at KRW 301 billion in 2018, showing a slight decline in advertisement’s share in the total online newspaper revenue, from 62 per cent in 2017. Online newspapers are available free of charge, which means there is no sales revenue. 32.4 per cent of revenue comes from other business activities, and only about 8.4 per cent of the industry revenue comes from online content licensing.
The revenue structure in the broadcasting industry seems more balanced, with advertising revenue on the decline over the past five years, from 48.7 per cent in 2013, but the income breakdown suggests that broadcasters may still be vulnerable to significant external pressure. In 2018, 34.1 per cent of industry revenue came from advertisement and 10 per cent from sponsorship earnings. Income from reception fees accounts for 12.6 per cent and programme sales account for 16.7 per cent. Key income sources vary based on the broadcaster’s ownership structure. As the public broadcaster, KBS operates under an annual budget; for financing, the chief executive officer sets an annual budget, which is then approved by the board of directors and submitted to the Korea Broadcasting Commission. The budget is exempt from prior congressional approval for the sake of independence and impartiality, but the finalised account must be approved in congress after the end of every tax year. KBS is also the only broadcaster that charges a monthly reception fee to fund itself. In 2018, KBS earned 46 per cent of its income from the reception fees, 23.2 per cent from advertisement, 12.9 per cent from programme sales, and 5.6 per cent from sponsorship. MBC and SBS, however, relied on advertisements the most (40.1% and 41.1%, respectively), followed by programme sales.
A 2015 report from the liberal Democratic Party’s Institute of Democracy (Kim & Lee, 2015) pointed out the dominance of conglomerates in the media advertising market, suggesting that concentration of market power with a few advertisers may compromise the freedom and independence of the press. The study’s focus was the biggest four conglomerates in South Korea: Samsung, Hyundai Automobile, SK, and LG. The results showed that all three of the major terrestrial broadcasters have the highest proportion of Samsung advertisements. Hyundai Automobile is dominant in the four major general cable channels except for JTBC, where Samsung is the biggest advertising client. For newspapers, Samsung advertisements were dominant in Chosun Ilbo, JoongAng Ilbo, Dong-A Ilbo, Maeil Economy Daily, and Hankook Economy Daily between 2010 and 2014. Hankyoreh, Kyunghyang Shinmun, and Hankook Ilbo did not consistently rely on a single advertiser, unlike Maeil Economy Daily, which relied mostly on Samsung for its advertising revenue.
The Newspaper Code of Ethics, adopted by the Korean Association of Newspapers, Korea News Editors’ Association, and Journalists Association of Korea, specifies independence from social and economic powers as one of the fundamental responsibilities of journalists (Korea Press Ethics Commission, 2009). However, responses from the Korean Journalists Survey 2019 reflect the pressure journalists work under in companies with different revenue and ownership structures. Overall, advertisers (68.4%) were most frequently selected as one of the three biggest factors restricting freedom of the press, followed by executive editorial officers (52.7%). But the journalists from the three major broadcasters (KBS, MBC, and SBS) selected the executive editorial officers as the biggest obstacle to freedom of the press (57%), followed by government and political influence (54.2%), with advertisers fifth on the list (29.6%) (Korea Press Foundation, 2019c). This reflects the influence of government and government-affiliated commissions in legacy television news media, especially in the form of subsidies and government advertisement contracts. On the other hand, respondents from the economic dailies (90%), national general dailies (77.1%), and online newspapers (74.6%) felt the pressure from the advertisers to be the greatest.
