[Asia Economy Reporter Seulgina Jo] At the National Assembly Science, Technology, Information and Communications Committee (STICC) audit, there were calls to improve the ‘supply first, contract later’ practice in relation to conflicts over paid broadcasting content usage fees, which even led to an unprecedented broadcast suspension incident.
On the 20th, Woo Sang-ho, a member of the Democratic Party of Korea, stated during the comprehensive audit of the Ministry of Science and ICT conducted by the STICC, “The current system, supply first and contract later, is actually unreasonable.”
Rep. Woo criticized, “Where else is there a system that supplies first and then makes a contract? We need to establish standards for fee calculation, exception criteria, and separate promotion methods, and redo the process.”
In particular, Rep. Woo argued, “Netflix’s profit comes from the production company that created Squid Game,” adding, “The core of promotion work is not platform-centered thinking. Unless promotion policies focus on production companies including producers, actors, writers, and directors, there is a structural problem in domestic platforms that makes it impossible to create such content.”
He added, “Regarding the issue of program fee calculation, it is difficult unless approached from the perspective of how to favor the production side.”
In response, Minister Lim Hye-sook of the Ministry of Science and ICT replied, “I agree.”
Conflicts among stakeholders over content usage fees have been ongoing for some time. Earlier in June, negotiations over program usage fees between CJ ENM and LG Uplus broke down, resulting in the suspension of live broadcasts of CJ ENM channels on U+ Mobile TV. Industry insiders point to the ‘supply first, contract later’ system as one of the fundamental causes of such incidents.
Currently, the Ministry of Science and ICT has formed a task force and is holding industry meetings as conflicts over retransmission fees for terrestrial broadcasting, program usage fees, and home shopping broadcast fees intensify. However, discussions have made little progress due to the complex entanglement of interests among industries.
On the other hand, there are opposing voices emphasizing the need to consider protecting small and medium-sized PPs and enhancing diversity. They argue that if the ‘supply first, contract later’ practice disappears, small and medium PPs with low bargaining power may be excluded from paid broadcasting services, so a kind of protective measure considering the power imbalance is necessary.
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