The document summarizes the history and current state of the cable television industry in South Korea. It discusses key events like industry deregulation in the late 1990s and 2000s, the growth of digital cable and subscribers reaching 15 million households by 2008. Currently, five major cable media groups dominate the industry, providing cable services to around 14.8 million subscribers. The government regulates the industry through two agencies and aims to promote fair competition among cable, IPTV, and satellite through deregulation and consistent regulations across services.

1. Cable Television Industry in Korea:
Today and Future
April 8, 2014
Yoo S. Yang, Ph.D. (梁裕錫 敎授)
Chung-Ang University (中央大學校)
Seoul, Korea

2. History
 1995 Cable TV Service launched:
48 SOs with 24 PPs and Terrestrial broadcast channels(KBS, MBC, SBS)
 1999-2000 Deregulation of the Cable Industry
• Vertical and horizontal integration allowed (MPPs, MSOs, MSPs)
• Licensed PPs (news, home-shopping) and Unlicensed PPs (registration only)
• SO Ownership 33% allowed to conglomerates, foreigners, press
 2003 10 million subscribers
 2005 Digital Cable TV service launched
 2007 VoIP service
 2008 15 million Subscribers (80% of household)
 2008- 2010 Deregulation of the Media Industry
• Convergence of Telecommunication and Broadcasting
• 2008 IPTV launched
• 2011 Four new general programming channels (GPCs) launched
 2013 14.8 million subscribers (6.2 mil. Digital/ 8.6 mil. Analog)

3. Cable Industry in Korea
 Five vertically and horizontally integrated cable media groups (MSPs:
Multiple System Operators and Program Providers)
• 92 system operators(SOs) in 77 franchise areas
• 264 program providers(PPs) now in service
Multiple System Operators
Multiple Program Providers
channels
3

4. Cable TV’s important role in Korea
Critical Access to Terrestrial
Broadcast Programs
# of Employees
Cable TV hires 17,500
employees in Korea
- SOs : 4,846
- PPs : 12,654 employees
Broadcast television
networks employ
13,691 workers
7.9%
69.1%
※ Source: Television Viewing Behavior Study (KCC 2012)
Cable Satellite Terrestrial
broadcast
IPTV no TV
4

5. Cable Industry: Revenues
36%
48%
4%
12%
PPs Annual Revenue in 2012
Program Channels
Home shooping channels
Total
Revenu
e
US
$ 5.3
bil.
1,054 1,132 1,253 1,487 1,691 1,816
1,937
2,122 2,3201,581
2,057
2,350
2,761 3,053 3,300
3,960
4,717
5,548
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Annual Revenues by Broadcast Networks in Korea [unit : billion KW,%]
television broadcast networks Cable television networks
Program Providers Satellite television networks*
IPTV
Year 2013
SOs: US$ 3.2 bil.
PPs: US$ 5.9 bil.
• Home shopping channels account
for almost 50% of the total revenue
among program providers.
2004 2005 2006 2007 2008 2009 2010 2011 2012

6. Cable Network Subscribers (2008-2013)
Five MSOs, running 77 SOs,
account for 80% of the cable
subscribers in Korea.
1.9
6.2 mil
15.20
14.86 mil
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
2008 2009 2010 2011 2012 2013
Millionsubscribers
A. Cable networks D. Cable networks Cable networks Total
13.3
8.6 mil

7. Despite the
decrease of
subscribers, SOs
and PPs’ revenue
UP!!!
15.2 mil 14.8 mil.
Cable TV
Subscribers
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2008 2009 2010 2011 2012 2013
US$ 3.2 billion
US$ 5.9 billion
Unit: Bil. Won, 10,000 households
US$ 2.1 billion
Cable SOs’ Revenue
PPs’ revenue
US$ 2.8 billion

8. TV Ads market
Year 2012

9. Digital Services by the Cable TV
 interactive services
 Smart Broadband Services
 UHD Channels on Cable
 OTT services

10. Digital Cable Network Services in Korea
VOD(movie/TV drama) TV shopping
Cloud-based consol
games
Interactive learning TV garaoke TV stock trading
10

11. Smart Broadband Services
App Store
Personalized VOD service Web-browsing
UPPER BODY(App)
Back 11

12. UHD Channels on Cable
12

13. OTT services by Cable Operators
13

14. Government Regulations in Korea
Two Regulators now on the Cable industry
• Communications policies
• Pay TV network policies (Cable, IPTV,
Satellite, Program Providers)
• Licensing and Re-licensing of terrestrial
broadcast networks and general program
channels
• Ex-post regulation of broadcast business
(illegal behaviors)
Korea Communications
Commission
Ministry of Science, ICT and
Future Planning
15

15. Regulations on Pay TV Network
Business in Korea
Cable Network Satellite Network IPTV
Cross-
ownership
Maximum 33% of cross-ownership No cross-ownership regulation
Market
Shares
• Limit 1/3 of 77 franchise areas
• Limit 1/3 of total cable subscribers
• Now same as IPTV (2014 revised)
No limit
Limit 1/3 of
total Pay TV network subscribers
Max.
Subscribers*
5 million  8 million No limit 8 million
* Assuming 15 million Cable subscribers, and 24 million households of Total Cable and IPTV subscribers
Broadcasting Act
Internet Multimedia
Broadcast Services Act
16

16. Pay TV subscribers by Network
0
5
10
15
20
25
30
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
A. Cable networks
D. Cable networks
Cable networks Total
IPTV
Satellite networks
Relay Cable networks
total

17. Challenges and Opportunities
• Rapid penetration of IPTV services
• Digital Content fee charged by
KBS, MBC, SBS and Newly
licensed media channels
• The rise of OTT(over the top)
service
• KCC’s intention to relax
restricitions on terrestrial TV
advertising
• Switching to Digital Cable (14.8
million households as captive
market)
• New digital services (MVNO,
VOD, Home Security)
• A pending Special Bill to support
Digitalization of the Cable Industry
(2014)
• Deregulation on the cable industry
• KCC’s agreed to the License
Fee Hike for KBS along with
the plan to halt advertising on K
BS

18. Policy and Regulations

19. Government View II: Media as Creative
Satellite
sponsorship
Subscribers
Private
Capital
Inflows
Market
Competition
Deregulation
Transparency
IPTV
SOs
PPs
Cable TV
SOs
PPs
Digital Media
service
infrastructureTerrestrial
Network TV
TV advertisers
Better regulations
for the creative
industries.
Pay TV

20. Government Policy Direction
 New Initiative to Better Regulate the Business by the Government
(March 2014)
• Deregulate if not necessary.
• Improve the regulation if needed.
 KCC and MSIP on the Cable Industry
• Shift from the terrestrial network centric approach to develop the content
industry and the TV advertising industry
• Competition
– in the media buying market by allowing private media representatives
– 4 New General Program Channels(GPSs), whose programs SOs must carry, to promote both
content creation business and competition with the broadcast networks.
• Global standards in regulating the cable industry
• Relax ownership restrictions on cable business
• Open the domestic market to foreign competition
• Relax or eliminate detailed restrictions on advertising, programming, etc.
• “the same regulation on the same services” Principle
• Fair Competition among non-terrestrial TV services (Cable TV, IPTV, Satellite
TV)

21. Desired Direction of Regulations for
the Cable Industry
 For Fair Competition and Diversity of Broadcasting (consumer
benefit),
 “Same Service, Same Regulation” is desired when integrating the
two separate acts next time (the Broadcasting Act and the Internet
Media Broadcast Services Act)
 From price competition to service-based competition is more desirable
in the Pay TV market
 bloody price competition lowers down the ARPU of the Pay TV
industry
 Focus more on substantial investment for quality improvement,
rather than marketing expenditures
현황
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22. Thank You !