Tuesday, September 17th, 2013
Korea Investors Service said on September 16 in a report titled "General Cable TV Operators at a Crossroads,""For the full year of 2012, the four new TV companies took an operating loss of 309.7 billion won on 226.3-billion-won sales revenue. As the channels haven't been proven effective as a tool of promotion, they struggled to sign up enough number of advertisers."
"In order for the operators to make a positive operating profit, the break-even-point rating would be in the range of 2.6-3.5 percent. Even assuming the speed of rating growth since the December 2011 kickoff to continue, it will take at least three years for them to get to that level," the report contended.
The rating agency said, "If the cable TV operators cut back on their investment to minimize losses, they will fall prey to the vicious cycle in which lower ratings lead to less advertising income, worse sales performance, and further cut in investment. Given this is a game of long-term investment, commitment of owners or controlling shareholders will be the most critical factor in the success of the TV operators."