A Study of "Entry Barriers" in the Korean Television Production Industry

Lee, Ha You (Dept. of Mass Communication The Graduate School Yonsei University)

Technological change, coming of multi-channel and multi-media age, entrepreneurial initiative and regulatory reorientation, all mutually reinforcing, are transforming the structure of Korea Television Industry. These influences can make the total amount of television program be increased and increase the audience interests. It is, therefore, not surprising that we pay much attention to the proliferation of the "Korean television production industry. The subject of the present study is the present "barriers to entry" in the Korean television production industry.

The proliferation of production industry is regarded to have significance in economic and cultural aspects, and it is closely related with the "senders" in the process of mass communication, especially message producer. One of the ways to achieve senders' proliferation is to secure "the right to access" to the media. The right of access toward the media has two dimensions; the consumer's access to media channels and the producer's access to them. The latter can be understood

as their access to production industry. However, it is noticeable that the entry to production industry is not always free. The factors restraining the entry can be recognized as "barriers to entry" in production industry.

The purpose of this study is to examine the entry barriers in the Korean television production industry. Research questions are set as follows:

First, what are the barriers to entry especially from the perspective of Industrial Organization Economics? And what are the entry barriers in the Korean television production industry?

Secondly, what framework would be useful to examine the barriers to entry in the Korean television production industry?

Thirdly, what are the characteristics of the barriers to entry in the Korean television production industry?

The industrial organization model operates on three levels; structures, conducts, performances. Entry barriers can be explained in terms of structure aspects of that model. The term "barriers to entry" refers to the extent to which competition from new companies is controlled, blocked, or thwarted in an industry. The barriers to entry in the media industry could be influenced by five major factors' (1) absolute-cost, (2) economies of scale, (3) product differentiation, (4) vertical integration, (5) government policy barriers. However, these factors cannot totally illuminate the Korean situation. Accordingly, the framework for the analysis of barriers was established in this study to examine the Korean production industry. The Korean production industry of television programs can be interpreted by three dimensions of the proposed framework, i.e., dimensions of production process, distribution process, and representation process.

Barriers to entry in the production process have three elements' the absolute-cost related to high ?value equipment, lack of trained employees, vertical integration in production process. For barriers to entry in the distribution process, there are also three elements: copyright, distribution system. and limited numbers of outlets. And for barriers to entry in the representation process, exists two elements' vertical integration and the relationship between independent productions and broadcasting stations.

Besides these barriers, there can be legal and institutional barriers to entry. The proportion of subcontract, registration law, tax rate, lack of policy and institution for supporting the productions, and lack of internally integrated organization are they.

This study shammed that the Korean television production industry has a multitudes of entry barriers.

The characteristics of the Korean television production industry can be summarized into two aspects. First, barriers to entry of the Korean television production industry seems to be differ those of other media industry. But the core of barriers remain the same. Second, vertical integration is one of the most fundamental factors of entry barriers in the Korean television production industry. Most of barriers probably result from vertical integration.

In conclusion, because there are so many types of entry barriers in the Korean television production industry. we should try to lessen these barriers in order to activate the Korean television production industry. This will be the shortcut for the senders' proliferation in the production industry.

* Key word: Korean television production industry, Independent Production,

barriers to, entry, absolute-cost, economies of scale, vertial integration,

government policy, the right to access.