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Abstract Competition and Concentration in the Market for the Multichannel Video Programming G h e e - Young Noh ( P r o f e s s o, rschool of Communication, Hallym Univ. ) This paper addresses the following questions about multichannel video programming market in Korea: Who are the competitor in the market for the delivery of video programming? What are the barriers to entry and consumer choice in the market? What is the current market structure including horizontal and vertical integration? Especially, the study focuses on two separate but related markets: (a) the market for the distribution of multichannel video programming to households, and (b) the market for the providing of multichannel video programming. F i r s t l y, the study reviewed changes in the market for the MVPD including changes in the level of competition during last two years in Korea. The overbuilders have licensed for cable franchise in 2001. The comparisons between the competitive strategies of the incumbent and overbuilder were also examined. Incumbent system operators are most likely to respond to wireline competition by reducing their monthly charge, by off e r i n g additional channels, or by offering Internet and other telecommunication services. DBS may be also a viable alternative to wireline service, thus constraining cable s ability to exercise market power. The market of the delivery for video programming to households continues to be highly concentrated and characterized by substantial institutional and industry barriers to entry. Cable operators have engaged in a regional strategy called clustering. Clustering of cable systems can create greater economies of scale and size. Major MSOs have begun to build clusters in major metropolitan areas such as Seoul and Busan. These larger MSOs have significant bargaining power, especially on startup programming providers that need to reach a certain critical level of subscribership quickly to maintain their viability. The concentration trends in multichannel video programming market raise concerns about the anticompetitive effects of horizontal concentration ownership on the purchase of

programming. Vertical integration occurs where a video programming distributor has an ownership interest in a video programming provider or vice versa. These vertical relationships may have beneficial effects, or may deter competitive entry in the video m a r k e t p l a c e. Finally the study agenda of Internet video service were addressed. Internet video will become a viable competitor in the market for the delivery of video programming.