Refusal of Broadcasting Channel Operators' Meeting
New Year Talks Resume but Significant Differences Remain
[Asia Economy Reporter Oh Su-yeon] The government has initiated efforts to establish content compensation standards between broadcasting channel operators supplying content to paid broadcasting service providers, but conflicting positions have caused difficulties. Failure to reach an agreement within the year has made it difficult to apply the principle of pre-contracting before content supply for next year's content distribution.
According to the industry on the 30th, the Ministry of Science and ICT's 'Content Compensation Standards' has been postponed until next year. The paid broadcasting market has been trading content under the practice of 'supply first, contract later.' This method supplies content first and calculates compensation retroactively. There have been ongoing concerns that negotiations only conclude near the end of the year, making it difficult for major PPs to establish management plans.
In response, the Ministry of Science and ICT held a win-win consultative body in December last year and specified the principle of pre-contracting before supply. Although the exact timing of application was not specified at the time, the ministry expressed its intention to apply it from contracts in 2023. To implement pre-contracting before supply, it is necessary to first establish compensation standards that define the payment rates for program compensation. However, the stark differences in views between PPs and paid broadcasting service providers have caused the process to stall.
On the 14th, the Ministry of Science and ICT planned to meet with paid broadcasters and PPs to gather opinions on the draft compensation calculation guidelines, but three PP industry organizations?the Korea Cable TV Broadcasting Association PP Council, the Korea Channel Broadcasting Promotion Association, and the Korea Broadcasting Channel Usage Business Association?strongly opposed the guideline contents and boycotted the meeting. Terrestrial and comprehensive programming PPs did not participate in the discussions.
A PP industry official explained, "PPs currently view the revenue distribution structure as skewed, but the government's draft calculates formulas based on recognizing the current structure and sets upper and lower limits on the increase rate. It is difficult to accept a proposal that increases rates by a few percent when the starting point itself is skewed, so the gap is large."
After a meeting that only confirmed the differences in positions, the Ministry of Science and ICT has been meeting individual major PPs and paid broadcasters one by one to gather opinions. The previous morning, it met with the Korea Communications Commission to share the current situation and discuss future plans. As consultations between the industry and government have prolonged, it has become difficult to present content compensation standards within the year. The government plans to resume discussions in the new year.
A Ministry of Science and ICT official stated, "Starting from the second week of the new year, we plan to diligently meet with the industry and others to coordinate opinions," adding, "Since the industry's interests conflict, we plan to coordinate as much as possible to establish compensation standards."
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