Market Definition for Multi-Channel Video Programming Distribution Market : Focusing on Real-Time Retransmission of Terrestrial TV Channels

Recently there have been many issues related to competition in the multi-channel video programming distribution (MVPD) market. One example is the bargaining of retransmission rates of real-time terrestrial commercial TV channels (KBS2, MBC, SBS) between terrestrial broadcasters and pay-TV service providers (SO, IPTV, DBS). The bargaining ruptured and then SOs stopped retransmission of real-time terrestrial TV channels. To analyze those kinds of issues correctly, it is important to define related-good markets exactly. This article tries to define the MVPD market, with particular focus on the market of real-time retransmission of terrestrial TV channels. A Pay-TV service provider's willingness to pay for a terrestrial TV channel depends on whether other pay-TV service providers retransmit the same channel or not. To reflect that point, this article attempts to define the markets of real-time retransmission of terrestrial TV channels under the following two different scenarios; (i) all pay-TV service providers bargain and contract jointly with each terrestrial broadcaster (joint bargain & joint contract), and (ii) each pay-TV service provider bargains and contracts with each terrestrial broadcaster (separate bargain & separate contract). This is the main difference between this article and others. But the result of this article is the same as in previous studies. Each terrestrial commercial TV channel is defined as a separate good market regardless of the bargain and contract scenarios. But the market power of each terrestrial broadcaster might be restricted by the bargaining power of pay-TV service providers under the joint bargain & joint contract case