i Overview of the Korean media and entertainment industry
The Korean media and entertainment industry encompasses various branches, including print and visual media.
The Korean commercial broadcasting industry is broadly categorized into terrestrial broadcasters, cable TV broadcasters, Internet TV provided by telecom operators, and satellite broadcasting operators. In the past, terrestrial broadcasters and cable TV stations had a dominant share of the Korean commercial broadcasting market, but this landscape is rapidly changing with the growth of Internet TV stations.
In the field of print media, the newspaper industry is considered to be the largest and most important, although the size of this market continues to decrease with the development of visual broadcast media.
Finally, the Korean entertainment industry spans various forms of media, including films, videos, and music, and is currently thriving with the rise of K-pop and a growing interest in Korean films and TV shows. Domestic Korean games and Internet cartoon (or “webtoons”) companies2 have also experienced significant growth. The over-the-top (OTT) media market, led by global service providers like Google’s YouTube and Netflix, is also expanding dramatically in Korea. In addition, virtual reality, augmented reality and metaverse services are becoming more and more popular in Korea.
ii Recent Market Trends and Political DevelopmentsChanges in the Presidential Administration
In May 2022, the term of office of former Democratic Party of Korea member President Moon Jae-in ended and former People’s Power Party President Yoon Suk-yeol was sworn in. President Yoon will lead the Korean government for the next five years. In addition, following the presidential and local elections held earlier this year, the National Assembly began the second half of its four-year term in August 2022 with changes to the Standing Committee members. Because of this change in political climate, there were not many policy changes this year. Although the Yoon government has announced various media entertainment policies as part of President Yoon’s promise, it remains to be seen whether these policies will come to fruition as the opposition party still holds the majority of the National Assembly through May 2024.
Market changes due to the ongoing Covid-19 pandemic
Non-face-to-face content, including OTT, webtoons and games, has experienced rapid growth over the past two years since the outbreak of Covid-19 and these growth rates are expected to continue in the medium to long term . However, since social distancing policies have been relaxed since the second quarter of 2022, the growth of non-face-to-face content has stagnated or even declined. On the other hand, consumption of offline content such as cinemas and live performances is gradually recovering to pre-Covid levels.
Environmental, social and governance management movement in the entertainment industry
Recently, major entertainment companies such as SM, JYP, and HYBE have been actively seeking environmental, social, and governance management. K-pop fandoms have long demonstrated collective action by voluntarily donating on behalf of their favorite artists and planting forests to protect the environment, and such actions seem to have prompted the entertainment industry to join the movement. In particular, since the culture of buying large quantities of plastic albums in order to be able to attend fan meetings has been cited as a major cause of environmental degradation, some agencies began producing eco-manufactured albums and digital albums.
Legal and regulatory framework
In Korea, different forms of media are governed by different laws and regulations.
The Law on the Promotion of Newspapers, Etc. (Newspaper Law), regulated by the Ministry of Culture, Sports and Tourism (MCST), regulates newspapers. The Newspaper Law regulates, among other things, business registration for newspaper companies and prohibits foreigners or foreign legal entities from publishing newspapers in Korea.
In order to publish and distribute newspapers (including online newspapers), a business must register with the appropriate local government. In addition, foreign newspaper companies are required to establish and register a local Korean office or branch.
The Newspaper Act prohibits the publication of newspapers by any foreign government, corporation or organization; companies or organizations whose deputy director is a foreigner; and companies or organizations whose shares or shares are held by foreigners or foreign entities above a threshold. The Newspaper Act also prohibits the publication of online newspapers by foreigners.
ii broadcast communication
Broadcast communications are governed by the Broadcasting Act and the Internet Multimedia Broadcast Services Act, the latter governing companies that provide broadcasts over Internet protocols. Both laws fall under the jurisdiction of the Korea Communications Commission (KCC) and the Ministry of Science and ICT (MSIT). The laws regulate, among other things, broadcaster licenses and rating systems.
Broadcasters must either obtain a license from the KCC, or obtain a license or permit from the MSIT, or file a registration with the MSIT.
Korean TV stations are required to self-rate their programs before broadcasting the programs based on five elements that may be harmful to viewers (subject, violence, sexuality, risk of impersonation, and language) and display the rating throughout the broadcast.
iii Online Media
Although MSIT, KCC and MCST are planning to introduce new regulation for online media, there has been no significant development yet. However, the proposed amendment to the Telecommunications Business Act (TBA) defining online video services was passed in May 2022. Although the TBA does not impose any specific obligation on online video service providers aside from the definition, it is difficult to rule out the possibility that such regulations will be introduced in the near future. The TBA is implemented and enforced by the KCC and the MSIT.
More generally, under the TBA, Value-Added Service Providers (VSPs) must obtain approval from MSIT or file a report with MSIT prior to operation. Online media services are generally obliged to register with the MSIT as VSPs.
Films are subject to the Promotion of Motion Pictures and Video Products Act. Among other things, the law regulates the film rating system and prescribes a quota for cinemas for Korean films (so-called screen quota system).
Cinemas are required to screen at least 20 percent Korean films each weekday.