TY - JOUR
T1 - Competitive rivalry, inter-modal competition and market performance in the Korean cable television markets
T2 - An empirical analysis
AU - Sung, Nakil
PY - 2011/7
Y1 - 2011/7
N2 - This study consists of two empirical analyses regarding the state of competition in the Korean cable television (CATV) markets. In the first analysis, this study provides empirical evidence regarding the effects of intra-modal competition within the CATV markets and inter-modal competition from direct broadcast satellite (DBS) on market performance in the CATV industry prior to the introduction of internet protocol television (IPTV). The empirical results described herein demonstrate that intra-modal competition between two cable operators in the same franchise area tended to reduce both cable prices and operator profits, and to increase the CATV penetration rate. The strong presence of a DBS was concomitant with reductions in a cable operators profitability and cable subscriptions. The second part of this study attempts to briefly describe the state of competition in the CATV industry for the post-IPTV period. The results demonstrate that IPTV experienced a rapid growth in its subscriptions, which exerted competitive pressures on cable prices. That is, IPTV is emerging as a close substitute for CATV shortly after its introduction. Considering the significant inter-modal competition that exists between cable and telecom operators, the results of this study indicates that a regulator should focus its policies on promoting this inter-modal competition.
AB - This study consists of two empirical analyses regarding the state of competition in the Korean cable television (CATV) markets. In the first analysis, this study provides empirical evidence regarding the effects of intra-modal competition within the CATV markets and inter-modal competition from direct broadcast satellite (DBS) on market performance in the CATV industry prior to the introduction of internet protocol television (IPTV). The empirical results described herein demonstrate that intra-modal competition between two cable operators in the same franchise area tended to reduce both cable prices and operator profits, and to increase the CATV penetration rate. The strong presence of a DBS was concomitant with reductions in a cable operators profitability and cable subscriptions. The second part of this study attempts to briefly describe the state of competition in the CATV industry for the post-IPTV period. The results demonstrate that IPTV experienced a rapid growth in its subscriptions, which exerted competitive pressures on cable prices. That is, IPTV is emerging as a close substitute for CATV shortly after its introduction. Considering the significant inter-modal competition that exists between cable and telecom operators, the results of this study indicates that a regulator should focus its policies on promoting this inter-modal competition.
KW - Cable television
KW - Competition
KW - IPTV
KW - Inter-modal competition
KW - Intra-modal competition
KW - Market performance
UR - http://www.scopus.com/inward/record.url?scp=79955445235&partnerID=8YFLogxK
U2 - 10.1016/j.telpol.2011.04.005
DO - 10.1016/j.telpol.2011.04.005
M3 - Article
AN - SCOPUS:79955445235
SN - 0308-5961
VL - 35
SP - 483
EP - 493
JO - Telecommunications Policy
JF - Telecommunications Policy
IS - 6
ER -