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| Title | KCC ANNOUNCES 2024 BROADCAST MARKET COMPETITION ASSESSMENT RESULTS | ||
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| Date | 2025-04-01 | Read | 2745 |
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KCC ANNOUNCES 2024 BROADCAST MARKET COMPETITION ASSESSMENT RESULTS Competition between broadcasting and OTT services has intensified. Demand for domestic broadcast video production has weakened, along with a significant decline in the broadcast advertising market. Competition between broadcasting service providers and OTT providers has become fiercer across the broadcasting market. The influence of OTT has increased, while domestic broadcast video production demand and the broadcasting advertising market have sharply declined. The Korea Communications Commission (KCC, Chairperson Lee Jinksook) and the Korea Information Society Development Institute (KISDI, Acting President Kim Jeong-Eon) announced that they will release the results of the “2024 Broadcasting Market Competition Assessment” and report the findings to the National Assembly. The assessment utilized various sources in the media market, including the 2023 Statements of Financial Position and financial reports of broadcasting service providers as well as the Broadcasting Industry Survey Report. User, producer, and advertiser surveys (conducted in 2024) were also included in the assessment. The results are categorized into four areas: ▲ The pay TV market ▲ The broadcast channel trading market ▲ The broadcast video trading market ▲ The broadcast advertising market The key findings of the annual evaluations, aimed at establishing an efficient and fair competitive environment of the broadcasting market under the “Broadcasting Act,” are as follows: In the pay TV market, where pay television service providers?including IPTV service providers and system operators (SO)?offer pay TV services and attract subscribers, the number of subscribers and sales growth have significantly slowed. In 2023, the number of subscribers stood at 36.29 million (based on the number of terminal devices) and broadcasters’ sales stood at 7.2328 trillion won, which are only 0.01% and 0.4% year-on-year increases, respectively. It is assessed that the pay TV market is losing growth momentum primarily due to increased competitive pressure from OTT service providers, along with market saturation. Even though market concentration around the top three IPTV affiliates?KT, LGU+, and SK Broadband (SKB)?is intensifying amid stagnating growth in the pay TV market, there appear to be no significant effects on user welfare. The top three IPTV service providers accounted for 86.8% of total pay TV subscribers and 91.4% of total sales in 2023, with their market share continuing to increase. The Pay TV market findings integrated and assessed all pay TV services into a single market without distinguishing among them, taking into account the decreasing differences between various services and the increasing availability of supply and demand alternatives. The market, which was previously segmented into 78 SO broadcasting service areas, has now been integrated into a nationwide market in the assessment. The channel provision revenue of the broadcast channel trading market, where the transmission rights and fees for broadcast channels are decided among pay TV service providers and program providers (PP), increased by 9.3% year-on-year from 1.3674 trillion won to 1.494 trillion won as of 2023. This is attributable not only to an 11.3% year-on-year increase in terrestrial broadcasting providers’ retransmission fee revenue, but also to an 8.4% year-on-year rise in program provision revenue for PPs. The watch time for all channels has been continuously decreasing after peaking in 2020. Since 2021, the watch time of pay TV channels has been declining. The average daily TV watch time per person* in 2023 was 121 minutes, marking a 24.8% decrease over the past three years. * Average daily TV watch time per person: 161 minutes (2020) → 149 minutes (2021) → 137 minutes (2022) → 121 minutes (2023) Considering the continuous decrease in terrestrial channel watch time, the decline in pay TV watch time may not be due to a shift toward terrestrial channels but rather a decrease in overall broadcasting channel consumption due to increased consumption of new media, including OTT Close market monitoring is required, as there can be conflicts and changes in bargaining power and negotiation incentives between pay TV service providers (demand side) and broadcasting channels (supply side) due to market changes. Previously, the market was separately assessed as the “top three terrestrial channels retransmission rights trading market” and “pay broadcast channel trading market.” However, considering the narrowing gap in watch time among channels and changing perceptions on them, the two markets have been integrated into a single broadcast channel trading market. The broadcast video trading market, where suppliers such as production companies and demanders such as terrestrial broadcasting and OTT service providers trade broadcast rights for video content or transmission rights, has seen a decline in domestic content production demand. The direct production costs of broadcasting service providers, including expenses for in-house and external production as well as purchases, increased by 0.9% to 2.9034 trillion won in 2023. The cost of external production reached 1.0104 trillion won, reflecting a 4.5% increase from the previous year. However, the external production hours of broadcasting service providers declined by 15.8% compared to the previous year. The number of dramas supplied in 2023 by broadcasting and OTT service providers fell to 112, a 17.6% year-on-year decrease, indicating a contraction in production demand for domestic broadcast videos. Meanwhile, demand for Korean content on overseas OTT platforms continued to rise, with the number of Korean content increasing from 21 in 2022 to 30 in 2023 (the number of dramas: 21 in 2022 → 22 in 2023) < Number of Annual Original Drama Programming and Production (Unit: Titles) > Category 2019 2020 2021 2022 2023 Broadcasters 109 94 87 83 77 Domestic OTT 2 7 28 32 13 Global OTT 3 5 10 21 22 Total 114 106 125 136 112 ※ Figures are based on the initial release date. There may be differences due to differing statistical criteria. Single-episode dramas are included, while simultaneously programmed broadcasts and sports programming are excluded. It is estimated that domestic content demand, which grew rapidly due to its popularity in the global market through OTT platforms, declined overall in 2023. While production demand for overseas OTT service providers increased, production demand for domestic broadcasting and OTT service providers decreased due to declining profitability caused by the broadcasting advertisement market contraction and rising production costs. Accordingly, the need for institutional improvements was proposed to enhance the monitoring of competition in the broadcasting video content market and secure relevant statistics, as the media ecosystem could be negatively affected if certain providers gain excessive influence. The broadcast video trading market has analyzed the external production market. However, considering the competition between broadcasting and OTT service providers, the market’s name has changed from the “broadcasting program trading market” to the “broadcast video trading market”, integrating relevant services for assessment. < Broadcasting Advertising Market> The broadcasting advertising market, where broadcasting service providers?including terrestrial and pay broadcasting channels?and pay TV service providers earn profits by selling real-time TV advertisement slots to advertisers, showed a significant decline of 18.5% compared to the previous year, recording 2.3574 trillion won. While Korea’s total advertising market remained comparatively stable in 2023 with a year-on-year decrease of 0.6% (13.8017 trillion won), the broadcasting advertising sector’s share of the total advertising market* shrank to 17.6% for three consecutive years. * Broadcasting advertising sector’s share of the total advertising market: 22.7% (2021) → 20.6% (2022) → 17.6% (2023) Digital advertisement, which has held the biggest share of the total advertising market since 2016, continued expanding. The digital advertisement share* of 2023 recorded 60.7%, increasing by 2.3 percentage points. * Digital advertisement share of the total advertising market: 57.3% (2021), 58.4% (2022), 60.7% (2023) Previously, advertisers considered broadcasting advertisements effective in terms of audience attention and advertisement reach. However, as OTT advertisements are gaining favor among advertisers, the gap between the two advertisement types is narrowing. In addition, according to the 2024 survey, advertisers answered that if broadcasting advertisements are unavailable, they would be most likely to choose OTT as an alternative. Given changing consumer patterns towards digital platforms and digital advertising technology advancements, it is expected that the broadcasting advertisement share will continue to decrease in the future. The KCC will upload the “2024 Broadcasting Market Competition Assessment Report” along with other key data and graphics on its official website (www.kcc.go.kr) and Mediastat portal (mediastat.or.kr). |
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250326 KCC ANNOUNCES 2024 BROADCAST MARKET COMPETITION ASSESSMENT RESULTS.docx
250326 (보도자료) 방통위, ‘24년도 방송시장경쟁상황평가 결과 발표.hwpx |
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