Money Behind Con-tent: Fighting for the Right Balance. Jeonghwan Lee / Managing Editor of Mediatoday. N3 conference, Asian American Journalists Association. 28, May, 2016.

The core profit model for a journalist com-pany is the adver-tisement and sub-scription.

Korean news publish-ers suffer from rapidly dropping advertise-ment and subscription revenues.(Like any other countries around the world,)

Still, paradoxically, no journalist com-pany has closed shop during the last decade.

Rather, the number increased!

Very few individuals care to see paper newspaper.

(most of the subscribers are companies and government agen-cies)

There’s practically no advertisement effect. Still, companies do publish advertise-ments on newspapers.

There are two se-crets behind the sur-vival of newspaper companies.

First, the newspaper posts a serious threat to companies.

Some journalists say,

“I may not be able to make you thrive, but I can certainly make you go bankrupt!”

If no advertisement comes, they began attacks.

With advertisements, there’s a peace.

A public relations of -ficer in a company said,

“Any news article that mentions the CEO or the president of the company, we have to remove at whatever cost. Like even if it costs 100,000 dollars.”

That is how most of the journalism in Ko-rea survives.

There are many in-stances of news arti-cles disappearing.

There are transactions where the disappear-ance of an article is traded for advertise-ment contracts.

Second, decreasing number of adver-tisement is compen-sated for by supports and sponsoring.

Some of the companies recorded almost 60% of the advertisement expense from supports and sponsoring.There is no official statistics on this, But according to a research by Media Today,

60%

They pay money ask-ing for a promotional news articles.

Readers would be-lieve that they are news articles.

(They don’t even care to state that it’s an advertisement. And, you can clearly see it’s not what we call these days the “native ads.”)

Sometimes, they pay for an article that at-tacks a competitor.

Sometimes, an arti-cle that argues that a law should be passed,

And, other times, that a law should not be adopted.

They are all traded.

The on-paper adver-tisement doesn’t work, anyway,

So, they pay money to buy newspaper ar-ticles, for better, more direct and im-mediate results.Astonishing number of news companies are engaged in this type of transactions.

(Sometimes, even the government buys an article with money.)

Jeonghwan Lee

These are all paid article orderd by government agency.

Lots of conferences and forums organized by news companies are supported by nu-merous company, at a cost of as little as tens of thousands of dollars to hundreds of thousands of dollars.

There’s even a newspaper company that boasts a million dollar revenue for a single conference!

That’s a de facto bribery, for not attacking them.

Companies defini-tively prefer this types of transactions,

Because they cer-tainly can block criti-cal comments and control the public opinion,For such a meager expense!

No native ads can take root in Korea.

Very few trusts jour-nalism,

Already most of the journalist company have been engaged in the transaction of news articles for advertise-ments.

The bondage be-tween journalism and companies begets political biases.

The journalism shares the interests with the advertise-ment accounts.

Conservative newspa-per companies account for more than two-thirds of the overall revenue and circulation number of the overall newspaper market.

These newspapers take the stand for companies on sensi-tive issues.

They attack labor forces.

They object to in-creased taxation.

And, during elec-tions, they release articles favoring con-servative political parties.

Main theme of the stories is how to earn money and make a living.

Many journalists have experienced their articles re-moved,

or published with an entirely different themes.

The contents distri-bution environment in Korea is very unique.

30 million out of the in-ternet-consuming 40 million users have des-ignated the Naver as the start-up page of the PC web browser.Even the mobile internet is heavily influenced by Naver.

About 20 years ago, when we had a portal for the first time, Naver and Daum began pur-chasing news contents.

When a journalist writes an article and sends it, then an editor uploads the same article twice, on their own website, and then on portal sites.

You can see all arti-cles of all newspa-pers when you visit the portal site,

so readers don’t even care to visit the newspaper sites.

Newspaper compa-nies in Korea have practically no online profit model.

Online advertise-ments have such a low efficiency ratio,

So that they have to compete with quan-tity, not quality.

CPM (Cost Per Millennium) ranges between 500 and 4000 Korean Won.

0.5~4 dollar.

CTR (Click Through Ratio) is as low as 1 to 3%.

CPC (Cost Per Click) is be-tween 50 to 150 Won for mobile sites, and between 200 to 250 Won for PC websites. 0.2~0.25 dollar. (you can earn as much as 300 Won with Google Adsense).

If you insert as many advertisements as possible, you can earn about 2 million Won for a 100,000 views, 2000 dollar. but that would result in a very unpleasant screen composition.

No good, meaningful articles are read,

But provocative, gos-sip-like articles are read.

So, you have to dis-play on the front page whatever arti-cle that can attract clicks.

It feels as though good articles worth reading are covered by garbage.

Readers don’t trust journalism, and try to stay as much away from their websites as possible.

The Wall Street Jour-nal gave up on the Korean language edi-tion exactly for this reason.

Even excellent arti-cles earn very little advertisements.

Brand advertise-ments are practically nonexistent,

and almost all online advertisements are paid for according to the degree of expo-sure and clicks.

Korean journalism has made a deal with corporate powers to survive.

In exchange for not writing articles criticiz-ing corporations, they receive supports and sponsorships.

To earn cheap inter-net traffics, they pour out low quality articles, degrading their own values.

All experiments for paywall methods has resulted in failure in Korea.

What meager hope left, if there is one,

Is that there are in-creasing number of al-ternative journalisms living off the voluntary sponsorship of readers.These journalists earn the sponsorship of not corporations, but readers.

Newstapa 35,953. Ohmynews 11,678. Gobalnews 7,509. Voiceofpeople 7,250. Pressian 2,069.Mediatoday 674. These are number of sponsorship reader. They pay 10 dollas per month. (8, April, 2016.)

They reduce their re-liance on corpora-tions, and they never care for click-through rates.They survive solely based on the value of the contents.

Our only hope is in-creasing number of journalism companies survive solely with the power, and the value of contents.Small but powerful media.

Thank you.My web site is http://www.leejeonghwan.com .