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Media & Entertainment

South Korea's news outlets chase the digital dream

Studying global peers and leveraging COVID credibility could spur online growth

South Korean newspapers have struggled to make the transition from print to digital.   © Getty Images

SEOUL -- When The New York Times was looking to relocate some of its operations out of Hong Kong earlier this year, the U.S. media heavyweight chose Seoul, citing among other reasons the freedom of South Korea's press.

But while the NYT comes seeking a free and open market, local newspapers are also hoping to get something out of next year's move: insight into how media outlets can go digital without going broke.

With the vast majority of the population getting their news for free from aggregator sites South Korea's biggest newspapers have long struggled to monetize online content. In 2013, the Chosun Ilbo launched a premium online service that included not only news stories but also columns by outside experts, celebrities and other public figures. The lineup of writers included many big names, such as travel writer Han Bi-ya, comedian Park Kyung-lim and former prime minister Chung Un-chan.

The reception was not bad, with 50,000 readers registering for the service. The Chosun initially planned to set up a paywall for the service with subscriptions priced at 3,000 won ($2.50) per month.

But the country's largest newspaper was not confident that readers would stick with the service if they had to pay for it, and the Chosun ended up scrapping the service in 2017. As an experiment in setting up paywalls for online news, the results were not encouraging.

Print subscriptions, meanwhile, have been on the decline. The Chosun's paid circulation reached 1.16 million copies last year, down from 1.19 million a year ago, according to Korea Audit Bureau of Certification. The Dong-a Ilbo saw its circulation drop to 733,000 from 737,000 during the same period, while The JoongAng Ilbo's paid copies fell to 674,000 from 713,000.

No mainstream South Korean media outlet has managed to secure a stable income from its online news service -- which is why several are studying business models of their global peers, including The Nikkei, The Financial Times and The New York Times.

The Chosun signed an agreement with The Washington Post's Arc Publishing in February to benchmark its digital policy. The Post said it will support the South Korean paper in realizing its digital vision for the future by creating a more efficient and streamlined workflow.

The Hankook Ilbo, a midsize daily newspaper, began studying Japanese newspapers' digital strategy a few years ago.

One of the most formidable hurdles facing these newspapers can be summed up in one word: Naver. The country's largest internet company provides news for free, and it has a vast reach -- 62% of people in South Korea used Naver's news the service more than once a week, according to Digital News Report 2020 released by Reuters Institute for Study of Journalism. This put Naver at the top of the ranking of media brands ranking this year.

"South Korean media have already become news content suppliers for portals, especially Naver," said Kwon Tae-ho, head of local daily The Hankyoreh's publishing unit, in his 2019 book titled "No Free News: How Far Paid Digital News Comes?" Kwon said the "unfair" online news market led by Naver, as well as a lack of trust in local media are two key reasons why the digital subscription model is not working in the country.

The Reuters Institute survey supports Kwon's view that local media is suffering from low credibility. Only 21% of people said they trust the news overall, the lowest ranking among 40 countries surveyed by the institute.

"Trust in the news in South Korea is consistently amongst the lowest in our survey," the institute said in its report. "Popular newspapers [are] least trusted in general - even if they are often better trusted by those that use the brands regularly."

Help with the media's image problem could come, unexpectedly, from the coronavirus pandemic . Son Jae-kwon, head of Miilk, an information technology company, said demand for correct and reliable news sources is growing in this time of confusion, which has given media outlets a chance to prove their worth.

"News consumers visited branded news sites more than social media or mobile messengers when they needed journalism," said Son in a journal published by the Korea Press Foundation.

Son cited a survey by the Reuters Journalism Institution that showed that 77% of South Koreans got information on COVID-19 from news organizations, far higher than the U.S. with 54% and Germany with 47%.

Meanwhile Naver, facing criticism over its outsize influence in the online news market, has given its media partners more freedom to design their own pages and sell advertisements. Naver said in July that 44 media partners have drawn more than 1 million users through the system.

"The role of Naver news service is to connect the media and users eventually," said Yoo Bong-seok, a director at the company's service management. "We will offer a wide range of technology and data to the media so that we can grow together."

Yang Jeong-ae, a senior researcher at Korea Press Foundation, said the problem for local media is that they have little customer data which they can analyze for establishing paywalls. "It is necessary to know the characteristics of news consumers and what they want to pay for," Yang said in a report. "But the reality is that even legacy media have little user databases because delivery agencies manage customer data, not the company."

While Naver and local media compete over influence and money in the online news market, The New York Times announced in July that it will move part of its Asian digital news team to Seoul from Hong Kong next year as China moves to increase its control over the former British colony.

"South Korea proved attractive, among other reasons, for its friendliness to foreign business, independent press, and its central role in several major Asian news stories," said the Times in a story.

While industry watchers expect local media may learn valuable lessons from the U.S. publisher in terms of digital strategy and how to attract and manage paid subscribers, inspiration can also be found closer to home: the country's startups.

Media startups have made headway in attracting paid subscribers by offering unique content. For instance, the Korea Center for Investigative Journalism, or KCIJ, established in 2012 by journalists laid off under the Lee Myung-bak government, receives regularly monthly donations from about 34,000 readers. Their average monthly donation is 11,500 won ($9.80).

KCIJ has made a name for itself by publishing many stories about the country's powerful business families and religious leaders, stories that mainstream media have avoided covering.

"KCIJ represents voices of the weak and the marginalized by revealing fouls and discriminations committed by the upper class," said the media. "KCIJ does not accept any advertisements or supports from the government or lobby groups to be free from any pressure or influence. We are run by donation members' voluntary donations."

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