Traditional media outlets survive on corporate and government
pandering. They will soon need a real solution.
By Taehoon Lee
I sold my soul to work as a reporter for South Korea’s longest-running English-language newspaper until early 2013. When Samsung was being investigated for possible irregularities, I went to “room salons” with the tech giant’s officials and received lavish sexual entertainment in exchange for staying silent or removing the company’s name from negative press.
I wrote advertorials with my byline without informing readers that they were paid content, even though the law stipulates advertisements should be clearly distinguished from news content.
I was one of the 70 staff members of the Korea Times who kept silent about the ethical and legal breaches of the newspaper, which makes about $10 million a year with only 7,000 subscribers.
Despite that meager number, I would hand out a media kit claiming a circulation of 165,000. Surprisingly, no advertiser ever questioned the figure. Perhaps they were also acutely aware that it was totally groundless.
“We are dying like frogs in slowly boiling water,” Youngjin Oh, then the newspaper’s managing editor, would say.
Despite Oh’s pessimism, the company’s ad sales were rising 20 percent a year. The company’s revenue was growing so fast that it happily paid every employee a bonus worth one month’s wage. Many other local dailies were also generating more money than ever.
So how did the old newspaper maintain double-digit revenue growth in the digital age? Did it discover a new lucrative business model or start generating extra cash through online and mobile ad sales?
Making money online
The English daily was spending far more money than it was earning online. Compared to costs of tens of thousands of dollars a month for its eight dedicated servers and several full-time employees, the company’s new media division was making merely $500 a month through Google AdSense.
To be sure, Google was paying more generously than other legitimate ad networks. But the Korea Times’ website traffic, which had about 35,000 unique visitors daily, barely earned enough to offset its spending another $500 a month to boost its articles on Facebook.
Most articles had fewer than 1,000 views. Over 90 percent of total traffic came from sensational Korean-language clickbait that the English-language daily would put on Naver, the country’s largest portal site.
So how did the new media team make money? Occasionally, not-so-digitally savvy advertisers including the Seoul government would pay $2,000 a month to place a banner without properly assessing the effectiveness of their online media campaign.
But the main sources of the company’s online ad sales revenue come from fishy, sensational ad blocks, which promote suspicious sexual enhancement drugs, high-interest loans and other dubious products. They dole out up to 100 times more than Google AdSense or other legitimate ad networks.
Media’s open secret
Every month, Korea Times reporters had to propose advertorial ideas to desk editors. One-page advertorials and advertisements sold for $5,000-$10,000. Most of them blindly promoted government policies or praised corrupt conglomerate CEOs and their good deeds to the community.
After I quit the Korea Times, one senior reporter proposed an advertorial about “New Exploration, Social Enterprise,” a book that SK chairman Taewon Chey published in late 2014 while still serving a four-year jail term for embezzlement.
The book, which called for business favors from the government in return for solving social problems, was an apparent attempt by the disgraced businessman to win the favor of the media ahead of President Park Geunhye’s plan to pardon some convicts.
Nevertheless, many media outlets were eager to release Chey, head of the country’s third-largest company, from prison to improve their ad revenues. Chey received his second presidential pardon last year.
Such morally and legally questionable paid content is ironically dubbed a “special article.” Nearly all local journalists are aware of the ugly truth about special articles, but very few are willing to talk about it as it directly affects their job security and paychecks.
I cannot remember any Korea Times reporters who had the courage to demand their editor to remove their bylines from advertorials or label such articles as sponsored content.
The first advertorial I had to write was about Jaeoh Lee, then head of the Anti-Corruption and Civil Rights Commission and President Lee Myungbak’s right-hand man.
Instead of my editor, the ACRC’s PR spokesman gave me specific instructions on which photos to use and dictated how I should run the “special” story.
When President Lee appointed Youngran Kim, the country’s first female Supreme Court Justice and a national hero who proposed the country’s new anticorruption law, I thought the paid content deals would end. But I was wrong.
The practice of publishing articles for money was so prevalent in the industry that one PR representative from the ACRC once called me directly and told me to run a PR article on credit, on the condition that the agency would pay the following year when the new ad budget was approved.
How can the media escape corruption when the anticorruption agency itself pays for news articles?
Samsung was a major sponsor, chipping in about $86,000 for one article series on the controversial territory of Dokdo along with the Northeast Asian History Foundation, which usually paid some $30,000 a year for such content. Oddly, Samsung did not want any credit for it.
When I organized the country’s first Multicultural Youth Awards for the newspaper in late 2012, I learned that big companies often had more to lose by placing ineffective advertisements in the Korea Times.
Some sponsors of the multicultural awards even demanded their ads be removed from the newspaper despite them paying the full rate or more. They did not want other publications to find out about the ad deal, as competitors would call them immediately and hassle them until they received the same ad.
But as companies needed proof that their money was spent, they would ask to run the ads only in the paper’s first edition that would be delivered to them and to a small number of people living far from Seoul.
The Korea Times generated about $600,000 in sponsorship revenue from just one multicultural event, but kept most of the money despite its promise to use it for underprivileged multicultural children.
It was sickening to witness the company trying to set up its own charity to launder corporate donations and find an NGO that was willing to funnel the money for the newspaper.
When the legal battle over patents heated up between Samsung and Apple, the Korea Times became a de facto mouthpiece of the tech giant and ran a series of special articles in favor of Samsung.
Words from international experts were taken out of context to defend Samsung by the paper’s tech reporter, who was willing to pump out biased articles so everyone would receive their paycheck on time and he could continue to frequent room salons with Samsung sponsors.
Extortion from advertisers and the deception of the public will not last much longer. News outlets, including the Korea Times, must be well aware that they will need to find an alternative revenue source to survive.
The Korea Times has been an invaluable asset for nurturing new journalists and covering important historical and social issues, including the atrocities of the Korean War, the military government’s brutal crackdown at the 1980 Gwangju Uprising and the continuing abuse of multicultural workers.
The newspaper has also served as a great platform for its readers and columnists to share their insight and views about society. Some of its brightest journalists fought hard against the government’s censorship on top of the company’s internal censorship.
I have declined raises and promotions to rejoin the Korea Times as I do not have the remedy to improve the aging company’s financial status and journalistic standards. However, I would gladly step in if the company’s decision-makers showed genuine willingness to improve its ethical standards and made greater efforts to serve the public’s interest.
I hope the Korea Times and other traditional media outlets find the support to better adapt to this fast-changing media environment and play the critical role of being a voice for the voiceless once again, instead of being the mouthpiece of those with power and money.
The article was originally published on the website of the N3CON SEOUL 2016, n3con.com.