Video contents have moved from television and cinema screens to laptop and smartphone screens. Over the top (OTT) services has grown remarkably by providing consumers with a sweet enjoyable time at their disposal. Meanwhile, the charged broadcasting companies had to sit and watch this phenomenon bitterly. Now, however, the movement of merger and acquisition (M&A) in the field of cable television (CATV) is expected to afford a change in the media market.
The resolution of LG Uplus to take CJ Hello over is under the evaluation of the Ministry of Science and ICT (MSIT). Other mobile communications business operators also proclaimed to proceed with an M&A of CATV broadcasting business operators. KT leading the industry, the rest of the mobile communication corporations have been vying to get an upper hand in the Internet protocol television (IPTV) market. They wanted to raise their media industry and the CATV operators wanted to escape stagnation. Indeed, the number of CATV users continued to decline, being outnumbered by IPTV in 2017.
This change is expected to bring positive effects to the stagnant media environment where depressed market hindered contents development. One possible merit for customers is the comprehensive combination of telecom and broadcasts. Since the distinction of wire and wireless service is losing its meaning, mobile communications operators have promoted bundle products including highspeed Internet, charged broadcasts and now OTT services are introduced. For instance, LG Uplus contracted with Netflix last November and offered a related payment plan. The integration of platforms and services can be good news to customers who want enhanced convenience.
The expansion of the platform and user pool can provide an opportunity for mobile communications corporations to invest more in media contents. Especially, 5G media contents seem promising as many of the mobile communications operators are devoting themselves to it. For example, SKT concluded a memorandum of understanding (MOU) with the Korean Broadcasting System (KBS) to work on augmented reality (AR) based on 5G. When the technologies are combined with the live-stream broadcasting channels through M&A, it is expected that new contents would be initiatively produced.
Thus, the government needs to deregulate the constraint on the leading operator to let M&As go smoothly. The current decision of the National Assembly to convert the total number regulation to post-regulation is hence, desirable. The Broadcasting Act included the regulation to prohibit a broadcasting business operator from having more than 33 percent of total subscribers paying for a television service. Although it had a sunset in June 2018, a definite resolution has been delayed and made M&A process obscure.
The relaxation of the regulation mentioned above is necessary to secure the national competitiveness of a media environment. Recently, global enterprises, including Disney and American Telephone & Telegraph (AT&T), announced that they went into acquiring contents entities to develop original platforms and contents. It shows that the world dashed into a competition of the new era in which OTT gradually replaces existing platforms. Domestic corporations also need to raise themselves in this situation.
As the social paradigm changes, the media environment is bound to undergo internal crustal movements. This movement of mobile communications business operators and CATV broadcasting business operators to supplement each other is expected to improve the domestic broadcasting market. It seems to be the time to focus on developing the power of contents by expanding the market. In this context, the government’s swift and concrete process is urged to approve the deregulation of the total number regulations and requested M&As.