Democratization and restructuring the media industry

When President Kim Dae Jung of the Republic of Korea was awarded the Nobel
Peace Prize in 2000, people around the world applauded the triumph of
democracy. Televisions and newspapers showed Kim’s life-long fight
for ‘democracy’: he had been in mortal danger and imprisoned
many times. At the same time, when the President flew to Sweden accompanied
by over a hundred people invited by him, there were frequent street demonstrations
organised by Korean workers. Many people in Korea cynically responded
to the symbolism of winning democracy at the expense of economic stability.
Despite the personal honour of the Nobel prize, President Kim is facing
a legitimacy crisis as well as political and economic difficulties. While
transforming the bureaucratic authoritarianism of previous regimes into
populism in this government, the President has encountered many demands
from private sectors. South Korea is facing crucial problems of market
domination and invasion of foreign capital.
The media industry has also changed in line with alterations in the political
regime. The broadcasting industry in particular, which has stronger public
influence than other media, has been affected by political changes. In
Korea, the media industry was the main impetus behind maintaining bureaucratic
authoritarianism. In the 1960s, when economic development started under
the control of a bureaucratic authoritarian government, the media were
tightly controlled. Then and during the 1970s, censorship was the key
means of enforcement in media output.
In the 1980s, on the other hand, since President Chun took over the authoritarian
regime, the government started to intervene in media ownership. In 1980,
the broadcasting companies were all merged into one and owned by the government.
It also set up a new public institution to control advertising, Korean
Broadcasting Advertisement Corporation (KOBACO). It was mandatory for
KOBACO to manage and sell the entire broadcasting advertisement time to
advertisers. This shift of ownership was prompted by political motivations.
Yet, it provided economic influence. The media industry owned by the government
was almost free of market influences as well as foreign impact. Foreign
ownership was prohibited by law.
Since the military regime collapsed and civilian government was established
in the 1990s, the media industry has been accordingly transformed. A private
broadcasting company was established in 1990 and a number of private local
companies were also licensed. Along with political liberalisation, new
media have rapidly developed. The government has played a leading role
in employing cable television, internet, DBS and digital television. These
new media need enormous financial resources that only the private sector
can afford. After a five-year-long debate in the National Assembly, a
new Broadcasting Act was passed in 2000. Privatisation and opening up
the market are the main premises of the new law.
The media industry has gone through a process of economic restructuring.
It has no longer been protected by the umbrella of political authority.
Companies are trying to find ways of surviving in an economic crisis.
Consequently, many broadcasting and new media companies are reaching out
to foreign capital. During earlier bureaucratic authoritarian regimes,
foreign capital was not allow to invest in the media industry. Now, however,
the new government is welcoming foreign capital into any industry including
the media.
Democracy and the media in South Korea
From the beginning Korean media were controlled by a strong political
authority. Under Japanese colonisation, new newspaper companies were censored
by the government. After Independence in 1945, the American military government
had power over Korean mass communication for three years. The first Korean
government was also notorious as a dictatorship and put pressure on the
media. From the start television networks had to put up with a strong
intervention. From 1992, when the military authority was rejected, the
new civilian government began to reform and liberalise the media.
To reduce political pressure, the media in Korea have led liberalisation
in three directions: enhancing free speech for democracy by the people;
reforming the media; and deregulating the media industry.
First, the media attempt to enhance democracy by representing public opinion
from the grassroots. The media begin to speak up for public opinion against
any undemocratic attempts by the government to revert to authoritarian
power. For example, citizens set up an organisation, and intervened in
the parliamentary elections on 13 April 2000. About 470 non-governmental
groups established ‘The Citizens Alliance for the 2000 General Election’
(CAGE). They publicised a blacklist of 86 ‘unfit’ candidates
and conducted rejection campaigns against 22 ‘target candidates’.
These people had criminal charges or unlawful tax and military service
records.
Newspapers reported diverse reactions at first. As time went on, however,
more newspapers supported CAGE’s activities. Television networks
took a more conservative stance by not making direct comments on the rejection
campaign. Yet, citizens’ power greatly influenced the results of
the election. According to CAGE 70% of blacklisted candidates lost their
seats in the National Assembly.
The rejection campaign demonstrated citizens’ power over the political
body and the media’s democratic siding with the people. This would
be unimaginable under a military government, when citizens were forced
to participate in the elections as the ruling party ordered. Although
there were big debates about CAGE’s activities and even though the
leader of CAGE was arrested on a sexual harassment charge, for Korean
society the rejection campaign marked a monumental incident of citizens’
power or democracy.
Second, the media in Korea have changed legally and institutionally after
the military government was abolished. A new Broadcasting Act was passed
at the end of 1999 after a five-year-long dispute in parliament. Accordingly,
an alternative Korea Broadcasting Commission (KBC) was organised as ‘an
independent public agency’. By law no political authority was allowed
to intervene in KBC’s business. Media organisations are able to exercise
more independent power over content and procedures than ever before.
Immediately after the success of the rejection campaign, citizens’
organisations turned their attention to media reform. Numerous citizens’
organisations once again created an alliance and demanded the elimination
of media monopolies, of distorted journalism and renewal of the media
market. But apart from rhetorical fervour, the citizens’ alliance
for media reform has yet to show any achievements.
Recently, media reform became a controversial issue in Korean society.
At a New Year press conference, President Kim Dae-Jung emphasised the
need for media reform. As a result, government plans to conduct a fully
fledged tax audit on 22 dailies and broadcasting networks. The media industry
has not experienced a tax audit except once in 1994.
Newspaper companies and others argue that President Kim’s plan for
media reform is, in fact, designed to tame the media. Since the present
government is facing a crisis and serious criticism from the media, according
to them, it is trying to intimidate the press in the name of media reform.
It happened in 1994 when the former president Kim Young-Sam experienced
the disapproval of public opinion. He did not even disclose the outcome
of the tax review. The citizens’ alliance for media reform (CAMR)
argues that media reform should be conducted fairly and the outcome disclosed.
Citizens have criticised the media’s biased reports for their own
interests and their collusive links with the government. Now, media reform
should not be used for political motivations but for public interest,
or democracy.
The main point of media reform is to change patterns of ownership. Major
dailies are inherited through family ownership or big conglomerates. High
circulation dailies in Korea, including Chosun and Dong-A, are in family
ownership. Joong-Ang and Munwha dailies are Samsung’s and Hyundai’s,
respectively.
Bang’s and Kim’s family respectively hold 100% of the stock
of Chosun and Dong-A. The same goes for Hankook daily. Joong-Ang and Munwha
dailies are Samsung or Hundai’s branches according to stock ownership
records. Samsung and Hyundai set up organisations in the name of funds.
These funds are not independent of their ownership. In the case of Kyunghyang
daily, employees shared the stocks as the big conglomerate, Hanwha, went
out of business. Daehan is a publicly owned daily newspaper company. Government
agency and public corporations have all the stocks.
An alternative form of ownership was pursued in order to establish an
independent editorial power. Hanguerai daily was established by over sixty
thousand people. It has maintained its liberal and revolutionary position
since then. Yet, major dailies have not changed their business practices.
Broadcasting companies, on the other hand, suffer more political intervention
compared to newspapers. Two networks are public systems, and a big company,
Taeyoung, owns a private one. Under political protection, these companies
have grown exceedingly. People call them ‘big dragons’ and they
have become inefficient and unproductive. Nevertheless, the organisations
make every effort to retain their vested interests.
Table 1. Ownership of Broadcasting

Table 1 shows the ownership of broadcasting companies. MBC became a public
company when the Chun government merged the media in 1980. In 1990, a
private broadcasting company was established. And later, the government
licensed a local station in a city of each province for private owners.
Private stations cannot have more than 30% of total stocks.
In Korea, ownership of the media industry is monopolised and strongly
connected to political power. In this situation fair competition and a
market place of ideas are not possible. Thus, people demand media reform
to protect fair expression of public opinion. Despite the normative value
of media reform, it gives rise to constant disputes between ruling and
opposition parties as well as among scholars general citizens. People
are suspicious of political intervention in media business. Public distrust
grew stronger as the newspapers reported the fact that the government
has made ‘media documents’ designed to repress media criticism.
Since public debates regarding media reform are still going on in Korean
society, we must wait a while to evaluate its contribution to democracy.
Liberalisation and dispersion of foreign capital
In Korean history, the media became open and liberalised after the colonial
system was demolished and military governments were out of power. Now,
the media openly criticise public policies and represent public opinion
against political power. Although changes in the media enhance political
freedom in the pursuit of democracy, this gives rise to another level
of restraint. It is one dimension of democracy to achieve ‘freedom
from’ another power. Yet, power works at various levels: structural
and cultural. The notion of democracy as ‘freedom from’ has
been criticised even in Western societies. The welfare state is an alternative
to the negative concept of democracy and it eliminates the structural
power that inhibits ‘freedom for’ or equality.
Another dimension of democracy lies in its cultural aspect. The free will
of people and material structure, as a matter of fact, are perceived and
represented at the cultural level. Cultural power is deeply involved in
political authority and the economy.
In Korea, deregulation of the media industry has proceeded in three ways:
relieving legal constraints, restructuring the media system and opening
up the market. First, media policies became more market driven rather
than public initiatives. For example, government is less involved in the
licensing process. Cable and satellite broadcasting channels do not need
licensing from the government under the new Broadcasting Act.
Second, public institutions established during the total media integration
under the military government are about to change their system. For instance,
the government plans to privatise KOBACO (Korea Broadcasting Advertisement
Corporations) that regulated broadcasting advertising for last two decades.
It also brings up public debate on the process of privatisation. Even
though KOBACO was built by the dictatorial regime of General Chun, it
has contributed to public interest to a certain degree by giving chances
to small companies and by lowering advertising fees. Some argue for maintaining
KOBACO’s regulation of public broadcasting, others for market competition
in advertising without any government intervention.
Third, deregulation leads to opening up the domestic market. Japanese
films, TV programmes and music recently began to enter the Korean market.
Other foreign programmes are coming to Korea and fill up the new channels.
Moreover, the most prominent change in opening up the market is adopting
direct foreign investment in Korea. It has been prohibited since the 1960s
when economic development started under Park’s military government.
Park built a strong government that led to an export-oriented economy,
but blocked the direct foreign investment in order to protect domestic
industries. Since the ‘IMF crisis’ in 1997, however, the new
government has attempted to obtain foreign capital.
Now, foreign capital is allowed to invest in the Korean media up to 33%
of total stocks under the new Broadcasting Act. For the last two years,
trans-national media firms including News Corporation and Time Warner
have began to invest directly in Korean media companies.
One of the biggest transnational media moguls, Rupert Murdock, introduced
foreign capital into the Korean media industry. In February 1998, President
Kim welcomed Murdock with a big hug in front of the press, and announced
that News Corp. would buy 15% of Dacom Satellite Multimedia System (DSMS)
stocks. By presenting a nice picture with Murdock in the newspapers, President
Kim managed to adopt foreign money without paying any special attention
to the nature of cultural industry. Right after the Murdock’s visit,
500 people signed a petition against Murdock’s joint venture and
set up a citizen’s alliance. The government, under pressure, postponed
joint ventures with foreigners in the broadcasting industry for two years.
Since Murdock has broken through the Korean media industry, transnational
media firms vigorously knock the door. Time Warner is one of the biggest
investors in Korean cable channels.
Table 2: Foreign Investment in the Korean media industry

News Corporation and Time Warner are the largest investors in the Korean
media industry. Though Time Warner was a latecomer, it made joint venture
with Orion by building On*Media. It has cross-ownership of diverse media
firms. On*Media manages two movie, one animation, a sports and a game
channels.
In the face of the ‘IMF crisis’ in 1997, Korean media have considered
foreign capital as the saviour of their economic difficulties. Cable companies,
especially, which had only deficits after five years criticised lack of
government investment in the cable business and sought foreign investment
as an alternative. On the other hand, new media such as internet services
and DBS adopt foreign capital more enthusiastically than old media because
advanced technology needs a higher amount of capital.
Post-colonial discourse in the world capitalist system
It is too early to evaluate the impact of foreign capital on the Korean
media industry. Yet, many people are concerned about the dependency of
Korean culture on transnational media moguls. The media industry has grown
too rapidly, so that domestic programmes cannot fill so many channels.
In 2001, we will have more than 100 channels including 80 DBS, 12 digital
television channels besides the terrestrial networks. It is obvious that
foreign programmes come with foreign capital and fill 80% of all channels.
Recalling many critical theorists’ arguments that media manufacture
people’s minds and tastes in mass society, the Korean people will
have American dreams and colonial identities. Korean people are worried
about cultural imperialism as transnational media influence the domestic
media and their audiences.
The problem with cultural imperialism is limited to explaining how international
capitalism functions in the contemporary world. As a matter of fact, foreign
capitalists do not intrude on home countries with force. Unlike the assumptions
of imperialism, local people voluntarily adopt foreign capital and hope
for it as a matter of life and death. The government and private companies
welcome the invasion of foreign capital as the picture of Murdock and
President Kim on the front page of newspapers showed.
It is not military force or economic class but discourse that expands
capitalism throughout the world in the contemporary post-colonial era.
In the Korean case, international capitalism penetrates the domestic media
industry along with the discourse of globalisation and technophilia. Since
the late 1990s, globalisation has been the catchphrase of the civilian
government in Korea. This discourse affects people’s way of life,
seeing that international competitiveness is the only way to revive Korean
society. Koreans are eager to catch up with technological developments,
believing that it promises a future of hope.
Direct foreign investment in the media industry may bring a new challenge
in the post-colonial era. The discourse of globalisation and technological
development now becomes a part of daily life and forms reality. Such discourse
was first initiated by political motivations, but now it seems that adopting
direct foreign investment is the only option for the Korean media industry
to overcome the economic crisis and to take a leading position in globalisation
and technological development.
Shortened version of paper presented at the conference on ‘Democratization
and the Mass Media: Comparative Perspectives from Europe and Asia’,
Bellagio, Italy, 9-13 April 2001.
Sunny Yoon is Assistant Professor at Hanyang University, Seoul,
Korea. He is working on cultural studies and the political economy of
communication. He has published several articles on information technologies,
popular culture and adolescent use of media.