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[Asia Economy Reporter Cha Min-young] In the process of restructuring the paid broadcasting market centered on IPTV and online video services (OTT), the position of small and medium-sized cable TV broadcasters (individual SOs) is shrinking. The market is calling for minimum safeguards to allow small and medium-sized individual SOs to fulfill their role as regional media.

According to the Ministry of Science and ICT and the industry on the 23rd, as of the first half of 2021, the number of paid broadcasting subscribers of nine individual SO companies was about 1.557 million, recording a market share of 4.44%. Compared to about 1.871 million in the first half of 2016, it decreased by more than 310,000. Considering the decline in cable TV viewing households, it is estimated that the number further decreased in the second half of last year.

Cable TV was overtaken in market share by IPTV in November 2017. Mergers and acquisitions (M&A) of large multiple system operators (MSOs) with multiple broadcasting stations nationwide also continued. The top market share companies, CJ HelloVision and T-Broad, ranked first and second respectively, were sold to LG Uplus and SK Telecom, followed by Hyundai HCN being sold to KT. The industry’s third and fourth-ranked companies, D’Live and CMB, are also seeking buyers amid management difficulties. Following Netflix in 2016, the domestic OTT trio (Wavve, TVING, Watcha), Disney Plus, and Apple TV Plus have intensified the OTT offensive. Meanwhile, the number of individual SOs has decreased to nine. Last year, SOs’ sales were approximately 30 billion to 60 billion KRW.

Individual SOs have contributed to job creation as regional media. The government and the National Assembly passed the 'Broadcasting Act Amendment' containing support measures for individual SOs at the end of last year. It aims to enhance the competitiveness of small and medium SOs facing difficult management environments and support regional channels of small and medium SOs to protect the rights and interests of regional viewers. A regulatory improvement plan allowing SOs to transition to IPTV providers to ensure technical neutrality also passed the National Assembly.

Lee Jun-seok, leader of the People Power Party, recently met with individual SOs and said, "I hope you do your best to perform the role of regional media as a 'regional life platform' and contribute to balanced regional development and cultural promotion," adding, "If necessary, we will cooperate with relevant ministries to support legal and institutional improvements for fair competition and a virtuous cycle structure in the paid broadcasting market."

However, individual SOs argue that more effective support measures are needed alongside legal and institutional improvements. Lee Han-oh, president of the National Federation for the Development of Individual SOs (CEO of Geumgang Broadcasting), said, "It is welcome that deregulation is being implemented across the paid broadcasting market," but added, "Since there is no concept of small and medium enterprises in the broadcasting market, despite the large size differences, monitoring and supervision of unfair practices that evade the law are not properly conducted, and we intend to continue urging this."

This content was produced with the assistance of AI translation services.