Korea’s entertainment program format is spreading throughout the world. Munhwa Broadcasting Corporation (MBC)’s King of Mask Singer has been successfully remade in the United States (US) as The Masked Singer. Despite such a great achievement, the Korean television (TV) format industry is still in the beginning stages. Therefore, the SungKyun Times (SKT) decided to look at the general TV format industry, its problems and ways to solve them with an emphasis on entertainment programs.
The Background and Current Situation of the Korean TV Format Industry
The Definition and the Emergence of the Format Industry
A format is a set of elements that are used to produce a TV program. There are mainly two types of TV formats which include the drama format and entertainment program format. Entertainment programs include game shows and reality shows. When a format is sold, a format bible, which contains the details needed for program production for areas such as lighting, camera angles, and stage design, is sold together with the format. The TV format industry is a subcategory of the globally built contents industry market. Back in the past, TV formats were considered as mere program proposals. After the Dutch-based media company Endemol Entertainment’s Big Brother was exported to more than 100 countries, TV format exports started to be recognized as a business opportunity. The first TV format exported from Korea was The Golden Bell Challenge. Its value, however, was very low, so the TV format export was not considered profitable at that time. Then, in 2013, the TV format industry gained a new character, as MBC’s I Am a Singer attracted huge attention from foreign markets. Also, MBC’s Dad! Where Are We Going? was successfully localized in foreign countries like China. Its success led the production to renew the contract for season two and three with a great increase in price of the format.
The Current Situation of the Korean TV Format Industry
According to the Korea Creative Content Agency (KOCCA), a public institution established by the government for the development of the cultural industry, the TV format export alone made profits of around 60 billion won in 2017. With the rise of the Korean Wave, Korea has become an emerging power in the TV format industry recently. Exports of Korean entertainment program formats are especially active, and are extremely successful in China. Hurry Up, Brother which is a Chinese version of Korea’s Running Man recorded ratings of 5%. In Particular, Korea is considered to be a pioneer of travel-themed entertainment shows, for instance, Korean Hostel in Spain. Grandpas over Flowers was successfully exported to Italy and Turkey. Though the Korean TV format industry is developing with rapid speed, there are some problems that still need improvements. Simple rehashes of past programs with different cast members show the reality of the Korean format industry. For example, Youn’s Kitchen, and Pocha Beyond Border are technically using the same format except for where they were filmed and whom they filmed with. This phenomenon occurs because of the fierce competition for viewer ratings among broadcasting companies as the numbers of programs increased after the appearance of Over The Top service (OTT) companies, like Netflix. Therefore, they started to produce programs that are similar but can guarantee more viewer ratings.
Problems of Korean Format Industry and Low Export Rates
➊ Excessive Power of Broadcasting Companies
Outsourcing Production produces TV formats and sells them to broadcasting companies. While there are a few outsourcing production companies that can negotiate on an equal footing with the broadcasting companies, new outsourcing production companies’ business entry is somewhat rare. One of the reasons for this is a lack of financial base, which can lead to a lack of creativity in TV formats. Numerous outsourcing productions need to constantly emerge to supply new ideas so that TV’s various formats can be produced. Currently, broadcasting companies are experiencing manpower saturation, and the bureaucratization is acting as an obstacle in attracting new manpower. The main problem is the Gap and Eul relationship formed between outsourcing productions and broadcasting companies. The Gap is the person or a group with more power, and Eul is the person or a group with less power. Broadcasting companies have rights on TV programming which enable them to make unreasonable demands such as unequal distribution of profits from advertisements and subscription fees. Because of this, more than 90% of outsourcing productions record deficits. Some might say it is natural for broadcasting companies to have TV programming rights, but the problem is that they misuse them. Since outsourcing productions cannot make any profit if the broadcasting companies do not air their programs, broadcasting companies often allocate the ownership ratio of intellectual property rights (IPR) for their own interest.
➋ Problems with Format Localization
Overseas media companies generally produce more TV formats that cast the general public than celebrities in programs. In contrast, Korean entertainment programs are highly dependent on celebrities. As a representative example, the long-run entertainment program, Infinite Challenge, is difficult to be exported due to the strong personalities of the cast members. Moreover, frequently used themes in Korean TV formats, such as family/ childcare, reflect unique cultural characteristics, which can make formats harder to be exported beyond Asia. For example, the Korean Broadcasting System (KBS)’s The Return of Superman and MBC’s Dad! Where Are We Going? became popular in Korea because they broke the stereotypes of mother’s roles in childcare and directly dealt with gender stereotypes. The program was highly popular in other Asian countries and China imported this format using the same theme. East Asian countries, where the conventional gender role of the caring housewife has been stressed more to females, inevitably had a better understanding of the shows’ concept while western countries might not.
Solutions for the Problems of the Korean Format Industry
➊ National Level Support for the Format Industry
According to a survey conducted by KOCCA in 2017, only 18% of signed contracts included the details of the profit distribution of non-drama genres between broadcasting companies and outsourcing productions. KOCCA has been suggesting the standards for fair contract conditions to solve this problem of unfair contracts. Unfortunately, its effort hasn’t been very effective. Since KOCCA is the most powerful institution that can potentially help outsourcing production for now, it needs to be entitled with stronger roles by the government to improve outsourcing companies’ rights. Implementing a financial support system for collaboration of productions and the broadcasting companies to help air creative pilot programs could be a good solution. Last but not least, professional manpower for sales should be trained and hired as well. It is important to grasp the current situation of the international sales market and the culture of each country to sell TV formats around the world. Since the format business targets overseas markets, the success of the business lies in understanding the local characteristics of each country.
➋ Interview with Professor Lee Jun-hee (Department of Film, TV and Multimedia)
What is the most needed change for the development of the Korean format industry?
Basically, if the general rights of the format creators are improved, better quality programs will be produced more. It is hard for the same creator to continue to produce new formats. Therefore, new format creators will need to be continuously supplied. To make this possible, the power structure which is centered on broadcasting companies should be reformed. Broadcasting companies still have little interest in the rights of the individual creators or outsourcing productions. The exclusive allocation of power to broadcasting companies has to be alleviated. The power of broadcasting companies will continue to be weakened by the spread of Internet Protocol Television (IPTV) and the emergence of OTT. The appearance of Netflix has been changing the ecosystem of broadcasting completely. Broadcasting companies are not the only ones who are in charge of broadcasting services anymore. Netflix is producing plenty of fine quality programs, and many creators wish to collaborate with them. Therefore, broadcasting companies need to be ready to make a fair allocation of IPR, not only for their survival but also for the development of the format industry. Broadcasting companies should make more fine quality TV formats with more creators and outsourcing companies to increase competitiveness. The British Broadcasting Corporation (BBC), for example, is already making a massive amount of profit, which is generated from IPR. Korean broadcasting companies should learn from this.
In addition to the policy changes mentioned above, a better understanding of the TV format business is crucial in the long run. The SKT hopes that the format industry will continue to develop and that the ecosystem of the format industry changes for the better.