[2022 National Audit] "Netflix and Disney+ Must Pay Film Development Fund"

Assemblyman Lee Gae-ho "No Contribution to Public Resources Despite Excess Profits"
"Film Development Fund Depleted... Need to Introduce Systems Like France and Germany"

[Image source=Yonhap News]

There has been a call to impose a film development fund and other charges on global online video services (OTT).

On the 5th, during the National Assembly’s Culture, Sports and Tourism Committee audit, Lee Gae-ho (Democratic Party) stated, "Global OTTs such as Netflix, Disney+, and Apple TV+ are generating excess profits in Korea through market dominance but contribute nothing to public resources," adding, "They are essentially free-riding on the domestic film industry foundation."

In fact, the OTT industry has grown at an average annual rate of 28% since 2012. Last year, its scale reached 1 trillion won, and it is expected to approach 2 trillion won by 2025. Lee emphasized, "These achievements were made on the foundation of the domestic film and broadcasting industry," and stressed, "Global OTTs enjoying monopolistic profits should be required to provide fair compensation and donations."

In France, funds are collected in areas such as film (TSA), broadcasting (TST), and VOD (video tax) to support the domestic film industry. Germany also imposes film contribution fees on OTTs. Lee said, "After COVID-19, the film distribution structure changed, and the film development fund, which is raised by collecting 3% of movie theater ticket sales, is on the verge of depletion," adding, "Korea also needs to introduce a system similar to those in France and Germany." The film development fund is used to support independent and art film production, nurture talent, invest in film production funds, and support overseas expansion.

However, Lee noted, "Since this could impose a financial burden on domestic OTTs, small businesses that do not meet certain user numbers or sales thresholds should be exempted from charges, as in the EU case."