CJ ENM Ultimately Notifies 'Supply Suspension'... 'Content Usage Fee' Conflict Threatening Viewers

[Asia Economy Reporter Joselgina] As CJ ENM's conflict with IPTV over content fee payments continues, the company has finally taken the 'supply suspension' card. CJ ENM's position is to receive a fair level of content fees, but there is ongoing controversy that their demands, including a tenfold increase compared to before, are excessive. Ultimately, the prolonged conflict is expected to lead to user damage.

According to the related industry on the 4th, LG Uplus informed users on the 1st that live broadcasts of CJ ENM channels provided on its online video service (OTT), U+ Mobile TV, may end from the 11th. The affected channels include tvN, tvN Story, O tvN, Olive, Mnet, Tooniverse, and seven others, totaling 10 channels. LG Uplus explained, "We will continue negotiations with CJ ENM to provide broadcasts," but also stated, "Despite efforts, the partner company may suspend supply, so we have provided this notice."

This move is interpreted as CJ ENM's response to the stalled content fee increase negotiations with U+ Mobile TV. CJ ENM has been negotiating content fees linked with IPTV, but from this year, they have separately demanded fee increases for IPTV-affiliated OTTs. In particular, it is known that they demanded a tenfold increase from KT and a 2 to 3 times increase from LG Uplus. Currently, OTTs that provide live broadcasts of CJ ENM channels include TVING, LG Uplus U+ Mobile TV, and KT Season.

KT is still in the negotiation stage and has not received a supply suspension notice. However, KT also holds the position that CJ ENM's demands are excessive and unacceptable, so a supply suspension of live broadcasts may occur on KT Season in the future.

KT and LG Uplus argue that their OTTs are additional services derived from IPTV with low revenue contribution, and CJ ENM's excessive rate increase demands should be discussed in connection with existing paid broadcasting program contracts. On the other hand, CJ ENM counters that their demands are appropriate considering channel influence, rising production costs, and the scale of content investment.

The conflict between the IPTV industry and CJ ENM has intensified day by day since CJ ENM demanded a 25% increase in program fees from IPTV operators compared to the previous year. Despite the Ministry of Science and ICT holding a meeting on the 27th of last month, chaired by Deputy Minister Jo Kyung-sik, to mediate the issue, just four days later CJ ENM publicly criticized the IPTV industry for being "stingy with content fees," and shortly after, the IPTV Association retaliated by saying CJ ENM is "full of arrogance and greed," showing that the gap in positions remains wide.

An industry insider said, "As the industrial landscape of broadcasting, content, and distribution rapidly changes, conflicts over profit distribution are intensifying, but stakeholders' positions are sharp," adding, "If the conflict prolongs, it will inevitably cause harm to viewers and have a negative impact on the overall market."