OTT Sighs in Relief as Self-Rating System Introduced... Industry Says "Now the Real Competition Begins"

National Assembly Approves Amendment to Film Promotion Act in Plenary Session
Voluntary Rating System Expected to Launch in April Next Year
Industry Optimistic About Government's Regulatory Easing Efforts
Reduced Scheduling Burden Including 'Simultaneous Overseas Release'

[Asia Economy Reporter Cha Min-young] The long-awaited 'self-rating system' for domestic online video service (OTT) industry players such as TVING and Wavve has been confirmed for introduction in April next year, bringing a wave of optimism to the industry. As differentiated marketing is crucial in this sector, the establishment of practical regulatory improvements is raising expectations within the industry that "the real competition is just beginning."

On the 7th, the National Assembly held a plenary session and passed an amendment to the "Act on the Promotion of Movies and Video Contents" (Yeongbi Act), allowing a self-rating classification system for online videos. Accordingly, OTT operators now have a legal basis to classify content ratings independently. Domestic OTT companies will be able to provide online video content through self-rating classification, excluding restricted viewing ratings, starting from April next year. Self-rating classification operators will be designated by the Minister of Culture, Sports and Tourism for a period not exceeding five years after undergoing screening among current OTT operators.

The OTT industry has responded positively as the new system will shorten the video release schedule, which was previously delayed due to prior review by the Korea Media Rating Board (KMRB). Under current law, KMRB has been required to determine ratings within 15 days. Complaints arose when important marketing schedules such as "simultaneous worldwide release" or "OTT pre-sale" coincided, causing tight deadlines. In the case of overseas drama series, even a delay in rating review for a single episode often disrupted the release of the entire series.

Some even resorted to tactics to avoid prior review by KMRB. For example, Coupang Play aired "SNL Korea" at 3 a.m. through QBS, a DMB broadcaster, to bypass KMRB review. This utilized the provision in Article 23 of the Enforcement Decree of the same law, which allows programs broadcast through a broadcaster to be produced as videos without prior rating review, requiring only post-review.

It is also expected that the number of cases where dramas simultaneously broadcast on terrestrial or general broadcasting channel operators (PP) are re-edited into director's cuts will increase. For instance, popular works such as the drama "Extraordinary Attorney Woo" were simultaneously aired on KT-affiliated ENA channel and Netflix. An industry insider said, "Even if a work is rated for viewers aged 15 and over, it is possible to present a director's cut version on OTT by restoring edited scenes, which will increase industry freedom and intensify competition."

However, there are concerns within the industry that the designation system, rather than a notification system, could be disadvantageous to new entrants in the future. According to the amended Yeongbi Act, self-rating classification operators will be designated by the Minister of Culture, Sports and Tourism for a period not exceeding five years after screening among current OTT operators. They may be re-designated after the expiration of the designation period, with detailed matters to be determined by Presidential Decree (Enforcement Decree).

Attention is also focused on the details of the Presidential Decree. Another industry official said, "The amendment to the Yeongbi Act is a significant change, and the industry only hopes for its prompt implementation. However, the degree of regulatory relaxation will vary depending on the specific guidelines included in the Enforcement Decree, so we are paying close attention to this," he said.