"We want the new channels to accelerate restructuring and consolidate the market," says Yoo Sung Chun, an official at the Ministry of Culture and Sports.
Korea's leading TV networks sell 95% of their advertising time, but cable TV has been languishing since its launch in 1995 due to an insufficient distribution network and lack of audience interest.
Advertisers have complained in the past that Korean cable is only useful for targeting particular groups, such as children via the cartoon channel.
To kick-start the sector, the government is now allowing program providers to operate more than one channel, a policy aimed at encouraging the emergence of a few big, efficient companies that produce several channels out of one studio. The government will also subsidize cable installation companies to hook up more neighborhoods.
Major cable TV players hope to launch new channels featuring games, politics, finance and East Asian culture.
The foray into new cable channels comes as the Korea Broadcasting Advertising Corp., Korea's state media selling monopoly, is preparing to end fixed-pricing practices, which advertisers fear could lead to a huge hike in prices.
Copyright November 1999, Crain Communications Inc.