The Korean Press Market
Prior to the report on the situation of the press market in Korea a general look at the Korean economic situation: the latest survey by the «Korean Chamber of Commerce and Industry» shows that at present Korean retailers predict hard times ahead, as consumers continue o tighten their belts amid the slow economy. This economic situation has a big impact on the press market and on the distribution market. Especially on the book market the situation has dramatic consequences: Within only four years over 40 % of the bookshops went bankrupt. Despite retailers’ various promotion efforts, nothing seems to work to revive the frozen consumer sentiment. Recent developments in the book and press business in Korea 1. The polarization between large and small size publishers has been accelerating over the past year due to mergers of press conglomerates. 2. Influx of large-scale foreign capital makes more marketing and sales possible. 3. Major markets such as Wal-Mart and E-mart have seen strong growth. This change puts smaller bookshops in a difficult position. 4. South Korea has positioned itself as having the world’s highest penetration of broadband Internet. As a consequence sales of online bookshops have increased. 5. Internet has a strong impact on the whole print media market. 6. A first step has been taken toward the development of Korean books export and overseas resources. Some Korean books attracted the attention of world press market at international Bologna bookfairs. 7. Koreans are very eager to study English. Nevertheless kids often develop a fear of the new language, which, first of all, looks too complicated to memorize. Comic books have been emerging as useful tools for education, which is invigorating the long struggling publishing industry. Last year, the first six volumes of Mabop Chonjamun, an educational comic book to teach basic English through comic characters, sold over two million copies. The unprecedented sales volumes for this book genre ranked the series eighth of the last year’s top ten list for hit commodity, announced by the Samsung Economic Research Institute – something extremely rare for comic books.

Government regulations
As Korea is still divided into North and South Korea and under suspension of fire, some books containing trends of ideology could be regulated by a special law under the name of «National Security Law». Also certain restrictions apply to pornographic magazines showing naked bodies.

The distribution market
On the distribution market there are a number of national distributors or wholesalers. For foreign titles there are two major companies, UPA Ltd. (Universal Publications Ageny Ltd.) and IPS (International Publications Service). Both cover a range of foreign periodical magazines, newspapers and paperbacks. UPA also has its own Newsstands with major foreign daily newspapers. For local titles there are the three wholesalers SooSong Sa, KangSeo Samtersa and HeungWon DoSeo. The largest retail chain is Kyobo (7 chain stores) with their own multi complex shop. Their business has been steadily growing at a rate of over 10% every year except 2004 (due to the more difficult economic situation). Other chains are YongPoong with 8 chain stores, whose business is also growing sharply, and Seoul Moongo with 3 chain stores.

Retail network
The regular retail network counts the levels Publisher -> Wholesalers -> Intermediate Wholesalers -> Intermediate Wholesalers -> Retail outlets -> Customer. Currently however, the contracted network has become very direct: Publisher Retail Outlets Customer; or even Publisher Customer. The number of intermediate wholesalers has been sharply reduced due to a strong increase in the market shares of Wal-Mart, E-mart and Internet bookstores like Yes24.com (Amazon.com). They discount over 15% (sometimes 20 – 30%) through their compressed distribution network. Due to this many small retailers and especially bookshops have to close down. It means a big change in the network, as there is much less need for the classic and regular network. This is also one of reasons for the increasing polarization between large and small size publishers. The fast development of technology enables all outlets to work with scanning systems. Between publishers/national distributors and wholesalers as well as between wholesalers and retailers there exists the principle of price maintenance, with many details in order to reduce the risk of bankruptcy. The draw is determined by the retailer. On the basis of revenue only 10– 15% of foreign titles are single copy sales, while subscriptions make up 85– 90%. Local titles are sold to 70– 80% as single copies, with only 20– 30% subscriptions. Foreign publishers start to increasingly promote newsstand sales too.

Ways of transportation
Korea is connected by air to every major capital in the world, either through direct flights or by connecting flights from major international airports in East Asia. About 37 international airlines maintain regular flight services, with over 1.500 flights into and out of Korea every week. Korea has eight international airports. Gimpo, Gimhae and Jeju operate direct flights to and from Tokyo, Fukuoka, Nagoya and Osaka in Japan. Various steamship lines connect to Korea. Among those from the American West Coast are Waterman Steamship, American Pioneer, Pacific Far East, Pacific Orient Express, State Marine and United States Lines. Several companies provide regular ferry services linking Japanese and Chinese ports.

The Korean press abroad
Korea has never focused on exportdriven press market, and there was not much international market. Thanks to «Hallyu» or the «Korean wave of pop culture» sweeping East Asia the entertainment industry now reaches as far as to China, Singapore, Malaysia, Japan, Taiwan, Hongkong and Vietnam. «Hallyu» has helped to boost sales of the Korean products (especially magazines of related pop culture). Outlook Consumer confidence in January recovered from a four-year low as various government measures such as tax relief helped bolster weak sentiment. The confidence index was the latest in a series of government data indicating that the sickly economy may have bottomed out. The consumer confidence index, a barometer of press market’s expectations about conditions for the next six months, climbed to a sevenmonth high in January, according to the National Statistical Office’s report. This gives a rather optimistic outlook for 2005 with the current trends continuing.

Author: Cavin Kwon, UPA Universal Publications Ageny Ltd.