Korea Music Copyright Association Applies for Amendment to 'Music Copyright Usage Fee Collection Regulations'
[Asia Economy Reporter Kim Heung-soon] New regulations are expected to be formalized requiring online video service (OTT) providers to pay music copyright fees "at the level of Netflix" for audio tracks included in their video content.
On the 31st, according to the Korea Music Copyright Association (KOMCA), a music copyright collective management organization, and the Ministry of Culture, Sports and Tourism, KOMCA recently prepared a revision of the "Music Copyright Usage Fee Collection Regulations," which provides grounds for charging OTT operators music copyright fees. The key point is the addition of a new item for "video transmission services" in Article 24 of the regulations.
'2.5% of sales revenue' or '175 KRW per subscriber,' whichever is higher
Stakeholder consultation → Music Industry Development Committee → Copyright Deliberation and Mediation Committee review
Implementation after approval by the Minister of Culture, Sports and Tourism
According to the new clause, when OTT operators transmit video content such as entertainment shows, dramas, movies, and documentaries where music copyright works are used incidentally, they must pay KOMCA the higher amount between 2.5% of their sales revenue as a music usage fee or 175 KRW per subscriber. For example, if the sales revenue is 1,000,000 KRW, 25,000 KRW will be collected as music copyright fees.
Under the current Copyright Act and its enforcement decree, if KOMCA applies for new collection regulations on music copyright usage fees, the regulations take effect immediately upon approval by the Minister of Culture, Sports and Tourism. Prior to this, the Ministry will collect opinions from stakeholders until the 10th of next month. Kim Jae-hyun, Director of the Copyright Bureau at the Ministry, stated, "The final approval decision will be made after review by the recently appointed '3rd Music Industry Development Committee' and the 'Copyright Deliberation and Mediation Committee,' which deliberates on copyright matters and mediates disputes."
KOMCA: "Determined that a separate calculation standard for OTT is necessary"
OTT Industry: "Currently reviewing objections"
Until now, there have been no separate collection regulations related to music copyright fees for OTT usage. Because of this, domestic OTT operators have demanded that copyright fees be collected according to the "Broadcast Retransmission Service" regulations applied to broadcasters' streaming services. Under these regulations, after applying discount criteria, the music copyright fee payable by OTT companies is about 0.56% of sales revenue. On the other hand, KOMCA recently demanded payment at a rate of approximately 2.5% of sales revenue, citing the music copyright fee rate contracted with Netflix. KOMCA's desired calculation standard is about five times higher, and they have decided to formalize this in the collection regulations.
A KOMCA official said, "The Broadcast Retransmission Service regulation was introduced in 2006 and is not suitable to be applied as is to OTT, and the copyright fee calculation standard is too low, so the rights of music creators are not properly recognized. Based on the judgment that collection regulations for new platforms are necessary, we established a new clause applicable to OTT and applied for the revision." They also added that the 2.5% music usage fee rate was calculated based on rates applied by overseas copyright organizations to video-on-demand (VOD) services, as reported by the International Confederation of Societies of Authors and Composers (CISAC).
Domestic OTT operators are opposing this rate as excessive, so it is uncertain whether the revision will be reflected as is. An OTT industry representative said, "We are currently reviewing objections during the Ministry of Culture, Sports and Tourism's opinion collection period."
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