[2020 National Audit] "Netflix Should Also Be Subject to Broadcasting Promotion Fund Charges Like CJ ENM"

Assemblyman Han Junho: "OTT and Portal Operators Also Need Public Responsibility"

Source: Office of Assemblyman Han Junho

[Asia Economy Reporter Kim Heung-soon] There has been a call to impose the Broadcasting and Communications Development Fund (BCDF) on online video service (OTT) providers such as Netflix and YouTube, as well as portal operators and multiple channel operators (MPP) like CJ ENM.

On the 8th, Han Jun-ho, a member of the National Assembly's Science, Technology, Information and Broadcasting and Communications Committee from the Democratic Party, stated during the audit of the Korea Communications Commission that these operators should also be subject to the BCDF.

Han said, "Since the launch of comprehensive programming channels in 2011, the media industry has changed drastically when looking at the trends in broadcasting advertising revenue and audience share by major broadcasters," adding, "In particular, the broadcasting advertising share of the giant MPP CJ ENM has surpassed KBS, with 13.8% compared to KBS's 13.6%." He further added, "At this point, it is necessary to reorganize the allocation of the BCDF resources from the perspective of promoting media in the Republic of Korea."

The BCDF has been operated since 2000 under the name Broadcasting Development Fund for broadcasting promotion projects and cultural and artistic promotion projects according to the 'Broadcasting Act.' In 2010, its name was changed under the 'Framework Act on Broadcasting and Communications Development' to support the promotion of broadcasting and communications.

The scope of collection includes terrestrial broadcasters, comprehensive programming and news channels, system operators (SO) of cable TV, satellite broadcasting, IPTV, and home shopping, which pay under the name of broadcaster contributions, and the three mobile carriers, which pay under the name of frequency allocation fees.

Han stated, "The amount collected from broadcaster contributions to the BCDF is about 36 billion KRW this year, down to about one-third compared to 90.6 billion KRW in 2011," and argued, "OTT and portals, which have surpassed the influence of legacy media such as terrestrial broadcasters, must bear public responsibility commensurate with their social influence and economic benefits."

Han cited data from the Korea Broadcasting Association, saying, "In the US and Europe, funds are collected from all broadcasters including PP as well as terrestrial broadcasters, and the proportion of fund revenue from pay broadcasting is actually increasing compared to terrestrial broadcasting." He also noted, "During the 2017 audit, Lee Deok-jae, former head of CJ ENM's IMedia Content Division, and Lee Hae-jin, founder of Naver, expressed willingness to participate in the BCDF," and requested, "CJ ENM, portals, and furthermore OTTs like Netflix should also participate."