[2021 National Audit] Hong Ik-pyo "Domestic OTT Review Delays... Regulations That Lower Enthusiasm"

Fundamental Development Policies Needed
to Compete with Netflix

At the National Assembly's Science, Technology, Information and Broadcasting and Communications Committee (STIBC) hearing targeting the Korea Communications Commission, concerns were raised about the need for institutional support measures to help domestic online video services (OTT) compete with Netflix. Photo by Dongju Yoon on the 1st at the National Assembly STIBC hearing.

[Asia Economy Reporter Cha Min-young] On the 5th, during the National Assembly Science, Technology, Information and Broadcasting and Communications Committee's (STIBC) audit of the Korea Communications Commission (KCC), concerns were raised that institutional support measures are needed to enable domestic online video services (OTT) to compete with Netflix.

Representative Hong Ik-pyo pointed out at the audit, "Our country's OTTs have experienced significant delays because they must receive ratings from the Culture, Sports and Tourism Committee and the Korea Film Council," adding, "Even after production, progress is not being made."

He continued, "Although the KCC is not officially opposed, it is delaying progress by opposing the establishment of a legal status," emphasizing, "The government is still in consultation, but on the ground, competitiveness is declining and motivation is waning; they must take responsibility and come up with solutions."

In response, Han Sang-hyuk, Chairman of the Korea Communications Commission, said, "The self-regulation system is a matter on which ministries have already reached agreement, and the KCC is not officially opposed," adding, "We will make efforts."

There were also calls for urgent support measures for content producers. For example, Netflix has positively changed the so-called abusive practices by production companies that were prevalent domestically, such as traditional promissory note payments and reduced settlement amounts, but more fundamental institutional changes are needed.

Representative Hong said, "The content fund previously operated by the KCC has now been transferred to the Ministry of Science and ICT, but there is a need to establish a content production fund," adding, "Measures such as creating a self-review system and content support review or support funds are necessary."

He also pointed out, "The KCC conducts market research before overseas expansion, but the countries differ year by year," noting, "It would be good if the production environment allowed for commissioned production or if the OTT target market was consistent, but the lack of continuity year by year reduces effectiveness."

Chairman Han Sang-hyuk responded, "We believe that overseas expansion and content investment require active investment," and said, "Our consistent position is that OTTs should enter overseas markets as a coalition. We will continue to consult with operators."