South Korean newspapers fight back against online portals

Seoul (dpa) - Internet portals and newspapers have become much like diehard enemies who find themselves taking shelter under the same umbrella. The umbrella protects them both, but the two foes find the arrangement anything but cozy.

In the past few years, top-tier portals in South Korea have unseated traditional newspapers as the new-media king, controlling about 90 per cent of online news traffic, according to Samsung Economic Research.

In this turnaround in the world's most wired country, news websites that have been spun from top newspapers have seen the big portals cut into their advertising and subscription bases, but at the same time, the portals have become a major source of their online revenues.

A couple of top-tier portals account for about 65 per cent of the news content sales for newspapers' online operations, according to Oh Soo-Jung, a senior researcher at the Korea Press Foundation (KPF), the state media watcher.

Newspapers have been fighting back to reverse the loss of their influence, taking their battle to the National Assembly and winning a concession from South Korea's largest portal aimed at sending more traffic to the papers' sites. A recent court ruling also dealt a blow to the portals.

The portals, however, are operating with the strategic advantage. "The portals are trying to reduce their budget for buying news content from newspapers while newspapers tend to be more dependent on portals as a major source of revenues," the KPF's Cho Yoon-Tae said.

Only a few years ago, six in 10 South Koreans used to start their days by reading newspapers, but now many simply visit portals where they can see dozens of newspapers online. As a result, the newspaper subscription rate was expected to fall from 48 per cent of the country's homes in 2004 to 40 per cent this year, KPF said.

Advertising revenues are also falling as South Korean businesses shuffle more of their ad budgets to the portals. Advertising spending for newspapers dropped from 17.43 trillion won (19 billion dollars) in 2004 to 16.72 trillion won in 2005 as advertising spending for Internet media increased from 3.92 trillion to 5.67 trillion won during the same period, KPF said.

Despite the economic hit of these two trends, newspapers are still eager to put their news on the front page at top-tier portals like Naver, South Korea's largest portal, which usually attracts 20.9 million visitors a month.

In comparison, Chosun.com, South Korea's largest spinoff news site, attracts 6.8 million visitors a month, and eDaily, the country's largest independent online news site, has 1.9 million monthly visitors.

But with the portals' newfound news power comes responsibility, newspapers have argued.

The state-run Press Arbitration Commission keeps watch over newspaper websites and news sites like Pressian or iNews on the lookout for slander or distortions of the truth, but big portals like yahoo.co.kr or NATE.com are free from media regulation.

Now, newspapers have joined forces with non-governmental organizations (NGOs) and lawmakers to enact a new media law requiring portals to be regulated like the online news sites.

The portals have denied they are subject to the media act, arguing they are only the distributors of news products. However, newspapers said portals have too big an editing power to be regarded as simple distributors.

"Portals make a decision on how much value to put on each news product," said Shim Jae-Chull, an opposition lawmaker supporting the new media act. "They decide where to place news articles, and they are changing the news headlines. These are seen like editing functions of the media."

Their influence has indeed created a change in the news. The shift in media power has resulted in more value being put on entertainment or gossipy news like celebrity scandals, aimed at luring younger readers, media watchers said.

The rapid rise of the portals without requiring them to perform a gatekeeping role has become a cause for concern among lawmakers and media NGOs and led to an unprecedented court ruling last week.

A Seoul district court ruled Friday in favour of a lawmaker who brought a lawsuit against NHN, Korea's biggest Internet company, which operates Naver. The lawmaker, Chun Yeo-Ock, claimed Naver hurt her credibility by posting a report that falsely quoted her.

NHN argued that it could not bear responsibility for the report because it was produced by another online news site, CBSi, and Naver simply posted it.

However, the court ruled in favour of Chun and ordered NHN to pay her 5 million won.

"The portals are also responsible for verifying whether the news articles that they carry are true or not," the court said in its ruling. "Even if the portal might not have enough resources for verifying the truth of the news, such a restriction does not become a reason to defy the claimant's right to protect herself from the false news article."

Newspapers have come out on top in other skirmishes as well. For example, Naver was pressured to promise last month that it would no longer carry full news stories.

"In November, we will pass our visitors on to the related online news site for the news that they want to read in full," an NHN spokesman said.

Some newspapers have also teamed up with KPF to protect the copyright on their news content. "So far, 28 newspapers have pooled together their news content under a commissioned system in which we will serve as a representative sales outlet with the portals," said Cho, a senior researcher with KPF.

Still, Cho acknowledged, it is getting harder for newspapers to speak out against the major portals.

"The portals generate most of the revenues for the dot-com news sites," Cho said. "This means they should be careful about speaking against their major portals for fear of losing their customers."

Copyright 2006 dpa Deutsche Presse-Agentur GmbH