Hanumjeohyeop Sues OTT Amid Music Royalties Dispute "Initiates Legal Action"

Wave, TVing, Watcha, KakaoPage, etc.
Fail to Take Copyright Fee Payment Measures

[Asia Economy Reporter Minyoung Cha] Amid ongoing conflicts over music copyright fees, the Korea Music Copyright Association (KOMCA), a music copyright trust management organization, announced on the 25th that it filed a complaint on the 21st against some domestic online video service (OTT) providers.

KOMCA explained, “Some domestic OTTs such as Wavve, TVING, Watcha, and KakaoPage have taken no action to pay copyright fees despite the association’s repeated requests in the past, the establishment of collection regulations for music copyright fees last December, and even after the follow-up cooperative council concluded in September this year.”

KOMCA stated, “Even though the regulation is set at a level lower than the international average and is difficult for the association to understand, it is based on law and procedures, so we comply with it. Domestic OTTs that do not even meet this minimum requirement clearly have no intention of paying copyright fees from the start.”

They continued, “Moreover, as companies specializing in content production and distribution, they are well aware that their actions are illegal, yet they have failed to pay copyright fees for up to 10 years. This is a deliberate disregard of the law and, beyond the amount involved, constitutes a serious criminal act that fosters the perception in the industry that ‘violating copyright law for a long time is not a problem.’”

It is known that the overseas OTT Netflix has been paying music copyright fees since 2018. Since the establishment of the collection regulations in January this year, more than 20 small and medium-sized video services or individual businesses have also signed contracts with KOMCA in accordance with the regulations.

KOMCA pointed out, “For overseas OTTs, if they do not pay copyright fees in the country where they want to provide services, their headquarters may not grant launch permission. Therefore, even before domestic regulations existed, Netflix negotiated sincerely with the association. In contrast, the copyright awareness of some domestic OTTs that continue to refuse even after the regulations were established is at a deplorable level.”

KOMCA added, “Until now, the association has refrained from legal action considering external circumstances such as the OTT cooperative council, but ultimately, having confirmed their lack of willingness to pay copyright fees, it has led to criminal complaints. We apologize to the music creators represented by the association for the delay in collecting copyright fees from some domestic OTTs.”

Meanwhile, OTT companies such as TVING, Wavve, and Watcha, along with KT and LG Uplus, which operate OTT services, have filed administrative lawsuits against the government, criticizing the newly established music copyright fee collection regulations by the Ministry of Culture, Sports and Tourism. The amendment unilaterally incorporates KOMCA’s logic, applying a copyright fee calculation method unfavorable to the OTT industry.

The amendment introduces a new clause for 'video transmission services' applicable to OTTs, raising the rate from 1.5% this year to 1.9995% by 2026. OTT providers must pay music copyright fees calculated by multiplying 1.5% of their sales revenue by an annual coefficient and the music copyright management ratio. The annual coefficient increases sequentially from 1.000 in 2021, 1.066 in 2022, up to 2026.