Since its first service in 1995, Korean cable industry has represented a quantum leap for past 13 years, having recently reached the tipping point at which the subscription level is no less than saturated. The cable industry will face cutthroat compet...
Since its first service in 1995, Korean cable industry has represented a quantum leap for past 13 years, having recently reached the tipping point at which the subscription level is no less than saturated. The cable industry will face cutthroat competition with IPTV players in the near future, and confront the US broadcasting service providers under a free trade agreement. Hence it is very important for Korean cable players to figure out the new growth drivers.
Until recently, most of the cable channels have broadcasted reruns of programs previously shown on terrestrial networks and foreign programs. These pre-tested programs ensure reliable market share, and receiving the existing programming is more cost-efficient than producing original programs. So far, the core competence of cable management has lied on the acquisition.
However the acquired programming in the cable industry led to different problems, which can be also found in receptive attitudes of the viewers. Their behavior shows that audience watches a program based on unconscious zapping rather than selects a specific channel of preference. It manifests viewers? little interest in programming of a specific cable channel.
This study is to examine the original programming as a qualitative growth factor of the cable TV and to analyze its significance in the industry based on cable program providers? original production recently begun in Korea. The research also encompasses how its own created shows and programming affect the channel in point as well as the cable market.
CJ Media channels were selected as subjects amongst different cable program providers with their own programs. The study is especially focused on tvN?s strategy including its original program portfolio, production competence and channel brand, to review its impact on CJ Media?s business, furthermore on the overall cable industry.
In addition, the study is also to analyze the effects of the US original programming ? how the titles were created, evolved, and influenced - in the US cable industry. The samples were mainly a premium channel, HBO, for its original programming, and a basic cable channel, FX, for its intrinsic results.
Although the US stations had been able to maintain steady ratings and revenue based on acquired programs, the decrease in viewers? loyalty led to the increase in original programming in the US. The identical programs aired on other channels won?t be able to ensure the brand loyalty, and the differentiation was the only key to win the competition.
Likewise in Korea, the original programming carried out by tvN has contributed immensely to CJ Media?s growth ? not to mention tvN itself. Since its launch in 2006, it has continuously increased market share, which allowed CJ Media to take first place over ON Media. But its aggressive original programming led to negative financial results. Its cost inefficiency replaced CJ Media?s black ink with red, since unlike HBO and FX, CJ Media hasn?t been in virtuous cycle.
However CJ Media has spent more on recruitment and training programs for motivated producers/staffs in response to original programming.
After all, the original programming has influenced deeply on cable TV industry. First, original production revs up throughout different channels in Korea. The unprecedented success of tvN has driven new trends in the own production not only in CJ Media but also in its competitors such as ON Media and MBC Dramanet. As a consequence, the cable industry is now better than ever with newly emerged killer programs of which the viewer ratings are over 1%.
Second, the independent production companies previously disadvantaged with terrestrial stations are welcoming the increasing production from the cable program providers. With more flexible and creative condition ? items, format, ingredient which are a crucial system ? in the cable industry, the results are to be highly expected. Such change will ultimately trigger growth in the Korean independent producers as well.
Lastly, a strong emphasis on nudity, violence and adult situations is placed for cable programs. The Korean Broadcasting Commission has restricted a number of tvN?s programs (i.e. <Scandals>, <Real Story>), and issued a notice that programs providers with original programming, including tvN, OCN, etc., should be committed to the deliberative standards. This deliberation will be a major issue to expand the cable original programming; however it needs to be deliberated in rational boundaries, since its potentials have been plainly proved in the past months.