"Urgent Need for Content Quota System to Counter Global OTT Offensive"

People Power Party Yeouido Research Institute 'Active Consideration' Opinion
"EU's Mandatory 30% Quota for Overseas OTT as Reference
Protect Domestic Content Competitiveness at Government Level"

[Asia Economy Reporter Cha Min-young] A claim has emerged from Yeouido Institute, the policy research institute of the People Power Party, that the introduction of an 'OTT content quota system' to protect the domestic online video service (OTT) industry is necessary. It is pointed out that urgent measures are needed in the face of the offensive from global OTTs such as Netflix, which has already secured the number one position in Korea, as well as Disney Plus (+), Apple TV, and Amazon Prime.

On the 2nd, Na Kyung-tae, a research fellow at Yeouido Institute, expressed the opinion of 'active consideration' for the introduction of the OTT content quota system, saying, "(The industry) needs continuous interest and financial support from the government and the National Assembly so that they can produce content that consumers want well."

The reference model for the OTT content quota system is the screen quota system introduced in Korea in 1966. Just as the domestic film industry was protected by regulating the number of days for screening domestic films to 73 days, the mandatory proportion of domestic content is set to protect the domestic content industry and OTT industry. Research fellow Na pointed out, "It is well known that the quota system was a major success factor in the domestic film sector."

The response of the European Union (EU) is in line with this. In 2018, the EU passed an amendment to the EU Audiovisual Media Services Directive, which includes a provision that overseas OTTs must provide at least 30% European works. This was a government-level move to take a more active protective stance to prevent concerns about cultural encroachment and to sufficiently enhance the competitiveness of domestic platforms.

In Korea, the influence of Netflix, which has the financial power to the extent that the term 'Netflixing' is used to mean 'watching online video content,' is formidable. While the growth of native OTTs is slow, new entrants such as Disney Plus, Apple TV, and Amazon Prime are preparing to enter the domestic market. Netflix's domestic payment amount last year was 517.3 billion KRW, a 108% increase compared to the previous year (248.3 billion KRW), and the number of paid subscribers is estimated at 4.1 million, which is three times the number of domestic OTT service subscribers.

However, the Ministry of Science and ICT, the competent authority, is prioritizing the 'minimum regulation' principle, so discussions on efforts to protect domestic platforms and content industries, such as the domestic quota system, are still in the early stages. It was only at the third meeting of the 'Internet Video Service Legal System Research Group,' led by the Ministry of Science and ICT on the 25th of last month, that discussions on the OTT quota system began for the first time.