The Investment Paradox: Korea's Broadcasting Reapproval System
Why Higher Content Investment Doesn't Always Lead to Better Performance
The Untold Story of Korea’s Broadcasting Regulation
In 2011, Korea introduced comprehensive programming channels (종편) as a bold experiment in media diversification. These channels were meant to compete with traditional terrestrial broadcasters, bringing fresh perspectives and innovative content to Korean viewers. But thirteen years later, the experiment faces a critical question: Has the regulatory framework kept pace with market realities?
(Legal max: 7 years)
Investment Ratio
Period (2015-2024)
Part 1: The Shortest Leash in Global Broadcasting
When Korea’s Broadcasting Act was revised, it allowed reapproval periods up to 7 years for comprehensive channels. Yet in practice, regulators have granted only 3-4 years - creating the shortest reapproval cycle among major broadcasting markets globally.
Why This Matters
Short reapproval periods create uncertainty that discourages long-term investment in content development, talent cultivation, and technology infrastructure. Broadcasters operate in perpetual "evaluation mode" rather than growth mode.
Part 2: The Investment Paradox Revealed
Our analysis of ten years of financial data from all four comprehensive channels reveals a surprising pattern: higher content investment ratios consistently correlate with lower profitability.
This isn’t a failure of investment strategy - it’s evidence of a regulatory requirement that doesn’t account for market realities. TV Chosun, for example, maintained an average investment ratio of 73.5% (exceeding the 70% requirement) while facing significant financial challenges in certain years.
Part 3: The Tale of Four Channels
Each comprehensive channel tells a different story of adaptation, struggle, and resilience under the current regulatory framework.
JTBC achieved the highest investment ratio (averaging 85.2%) but experienced volatile profitability, with significant losses in 2019-2020 and 2023-2024.
Channel A maintained moderate investment levels (79.2% average) but faced persistent financial challenges, recording losses in six out of ten years.
MBN kept a relatively conservative investment approach (78.7% average) and achieved more stable, albeit modest, profitability.
TV Chosun strategically increased investment over time, peaking at over 70% by 2022-2023, with notable profitability improvements in 2020-2022.
Part 4: Market Context - The Bigger Picture
The comprehensive channels don’t operate in a vacuum. Comparing their investment patterns with terrestrial broadcasters and general PP channels reveals important context.
- Terrestrial broadcasters (KBS, MBC, SBS, EBS): Average 79.3%
- Comprehensive channels: Average 79.3%
- General PP channels: Average 124.8% (but with huge variance)
The data shows comprehensive channels are investing at levels comparable to traditional terrestrial broadcasters, despite operating in a far more competitive and fragmented market environment.
Part 5: Evidence-Based Policy Recommendations
Based on ten years of empirical data, our research suggests three key reforms:
1. Extend the Actual Reapproval Period
Current: 3-4 years granted (despite 7-year legal maximum) Recommended: Utilize the full 7-year legal maximum
International Standard
UK: 10 years | US: 8 years | Japan: 5-7 years | Korea: 3-4 years (actual)
2. Adjust Content Investment Requirements
Current: Fixed 70% ratio requirement Recommended: Flexible 60-65% range based on market conditions
The data shows that forcing higher investment ratios beyond 70% creates diminishing returns and may actually harm long-term sustainability.
3. Introduce Market-Responsive Evaluation
Rather than rigid numerical targets, evaluation should consider:
- Market share dynamics and competition intensity
- Multi-year investment trends (not single-year snapshots)
- Quality metrics alongside quantity
- Revenue context (absolute investment amounts, not just ratios)
Methodology & Data Transparency
Data Sources:
- Broadcasting Industry Survey (2015-2024)
- Korea Communications Commission official reports
- Individual broadcaster business reports and reapproval documents
Analysis Period: 10 years (2015-2024) Sample: 4 comprehensive channels, 4 major terrestrial broadcasters, 145+ PP channels Total Observations: 1,532 company-year records
Statistical Methods:
- Time series analysis
- Cross-sectional regression
- Correlation analysis
- Comparative international research
Limitations:
- 2021 terrestrial data required correction (100x scaling error in original database)
- PP channel data shows high variance due to diverse business models
- Operating profit margins affected by multiple factors beyond investment ratios
Conclusion: Rethinking Regulation for Sustainability
Korea’s broadcasting reapproval system was designed with good intentions: ensuring quality content and broadcaster accountability. But thirteen years of real-world data reveal unintended consequences.
The investment paradox - where meeting higher requirements correlates with worse financial performance - suggests the current framework may be undermining the very sustainability it seeks to ensure.
By extending reapproval periods to the legal maximum of 7 years and introducing more flexible investment requirements, Korea can maintain quality standards while giving broadcasters the stability needed for long-term growth and innovation.
The path forward isn’t less accountability - it’s smarter accountability informed by empirical evidence rather than arbitrary targets.
Project Information
Research Period: August 2024 - November 2025 Last Updated: October 11, 2025 Version: v2.0 FINAL Presentation: Korean Society for Journalism & Communication Studies 2024 Fall Conference
Researcher Information
Yonghee Kim, Ph.D. Assistant Professor, Department of Business Administration Sunmoon University
Expertise:
- Media policy and regulation
- Digital platform economics
- Broadcasting and telecommunications industry analysis
- Media business strategy
Contact:
- Email: yhkim@sunmoon.ac.kr
- ORCID: 0000-0002-5643-2748
- Google Scholar: View Profile