the top four media may have maintained ad spend levels from 2006, but television registered a 3.5 percent decline in ad spend, to US$2billion, while newspapers saw an increase of 4.6 percent to US$1.78billion. The most significant growth comes from what Cheil classifies as ‘new media’ which has exhibited continuous growth since it hit the US$1billion mark in 2005 – up 27.7 percent year-on-year to US$1.87billion won in 2007. And traditional ad revenues can only look set to be under increasing threat from ‘new media’ like Internet and mobile – as unrestricted IPTV finally gets the green-light in South Korea. End-June 2008 saw a major regulatory hurdle of four years finally overcome when the Korea Communications Commission finalized the ordinances of IPTV law. Until then, IPTV operators were restricted to VOD services, precluded from ‘live’ broadcast of programmes in real time. Under the newly-approved rules, conglomerates with assets of less than US$10billion will be allowed to provide IPTV services. For broadcasting firms, the equity ceiling is US$3billion. 2004 saw KT introduce pre-IPTV services, followed by Hanarotelecom and LG Powercom, in a market boasting around 90 percent broadband Internet penetration. The broadcasting and communications sectors were previously regulated by the Broadcasting Commission and the Ministry of Information and Communication, which fought over IPTV jurisdiction. Cheil Communications’ report ‘Total advertising spending in 2007’, says that even though the ad spend growth of new media (cable TV, online, satellite TV) has slowed slightly, its high growth rate of 27.7 percent from the previous year made it a significant new growth engine in the 2007 advertising market. Says the report, “In particular, new media have led the growth of advertising spending by developing various advertising forms, and improving content as targeted media with relatively cheaper unit prices for advertising through cable TV and online media under a stagnating domestic economy and with a growing emphasis on market efficiencies.” Advertising spending in the top four media rose by only 0.6 percent from the previous year – but they still accounted for 58.2 percent of the entire advertising market. The Cheil report says that, unlike 2006 when the FIFA World Cup created big advertising demand, 2007 saw TV advertising suffer from a drop in ad spend due to the lack of mega sports events and sluggish economic growth – while radio maintained similar level of ads spending. After cable TV networks recorded complete sales of advertisements for the drama channels of the three broadcasting stations for the first time in 2006, they successfully created an ad market worth US$829million, up 23.5 percent on the previous year, by increasing advertising demand and their influence as medium. Key PP (Program Providers) of Cable TV with higher viewing rates have enjoyed advertising sales growth of around 20 percent by applying an actual unit price system and by reducing advertising bonus rates, as well as complete sales of advertisements. In addition, the cable TV networks have shown both quantitative and qualitative growth, leading the growth trend in the entire advertising market by launching newly positioned new channels; activating production of self-created contents; and promoting efficiencies while making various efforts to provide services and contents differentiated from those of ground wave TV. However, the disproportionate growth has continued with advertisement demand heavily concentrating only on a few of the top program providers. The online advertising market rose by 30.9 percent to hit US$1billion, while continuing its high growth trend from the previous year thanks to increasing search engine advertising which marked high growth of around 30 percent. For the first time, the online advertising market entered US$1billion level of sales thereby becoming a top three medium in terms of advertising spending, with 12.7 percent ad share, behind ground wave TV and newspapers. In particular, the fastest growth and attention to UCC has activated the growth of moving picture advertisements and led the advertising sales growth of its related websites (Pandora TV, gom TV, etc.), broadcasting stations’ websites and portal sites based on technological advancement in the Internet environment in 2007. In addition, satellite TV Skylife which is also a new medium, marked US$12million sales in advertising similar to that of its previous year while the DMB market combining both ground-wave DMB and satellite DMB hit US$8.8million indicating the needs for activating its market sales. But, ground-wave DMB is expected to show full-blown growth as a mobile medium by attracting more than 10 million subscribers by launching its nationwide service and after releasing its viewing rate results within this year. It is expected that companies will somewhat increase their advertising spending this year thanks to mega sports events including August’s Beijing Olympic Games, the World Cup regional qualifying matches – and the government’s strong will to revitalize the economy amid adverse external situations including unstable financial environment resulting from the sub-prime mortgage incidents in the US and ever-rising international oil and raw material prices. Based on such projections, the advertising market in 2008 is expected to continue the growth trend of 2007 to reach 8.3 – 8.4trillion won up by 4 – 5 percent from that of last year.
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