Temporary Postponement of Broadcast Suspension with Launch of Major Verification Council
Paid Broadcasting and Home Shopping Facing Growth Stagnation... Concerns of Repetition
"Mutual Consideration Among Operators Needed for Ecosystem Sustainability"
The blackout of KT Skylife transmission by Hyundai Home Shopping has been temporarily postponed, but the underlying conflict remains. There is a possibility that such incidents could recur next year. Opinions suggest that to sustain the ecosystem, other operators should be considered, and the government should take a more proactive role.
On the 20th, Hyundai Home Shopping announced through a notice that "although the 'program transmission contract' negotiations with KT Skylife have ended, the transmission suspension schedule will be temporarily postponed until after the conclusion of the fee verification council, in accordance with administrative guidance equivalent to the corrective order from the Ministry of Science and ICT."
Hyundai Home Shopping and KT Skylife initially extended the transmission suspension date from the 20th of last month to the 20th of this month and continued negotiations. However, since no agreement was reached by the evening of the 19th, the transmission suspension schedule was temporarily delayed.
Hyundai Home Shopping stated that it is difficult to bear the current high transmission fees and requested a reduction in fees and to move the channel number (6) currently located between terrestrial broadcasters to a later position, as channels adjacent to terrestrial broadcasters are more expensive. On the other hand, KT Skylife argued that it is difficult to unilaterally change channels already contracted by other operators. They also claimed that although transmission fees have been reasonably adjusted without increases for several years, this year Hyundai Home Shopping avoided providing formulas necessary for fee calculation and negotiations, rendering the guidelines meaningless.
The government initiated the operation of the fee verification council by holding its first meeting on the 17th, following KT Skylife's request for the council's formation on the 13th of last month.
KT Skylife stated, "We believe Hyundai Home Shopping's decision to temporarily postpone the broadcast transmission suspension is a fortunate choice to protect viewers and promote coexistence with small and medium-sized enterprises in home shopping. However, we deeply regret that the two prior announcements of broadcast suspension were used as negotiation cards for private interests." Hyundai Home Shopping responded, "In accordance with administrative guidance not to suspend broadcasts during the operation of the government-led fee verification council, we will temporarily postpone the transmission suspension schedule until after the council's conclusion and will sincerely participate in the council's activities."
Previously, disputes between other pay broadcasters and home shopping companies over home shopping transmission fees have also subsided. However, both sides are in a stagnant growth situation, and this is seen as only a temporary fix. Last year, home shopping transmission fees accounted for 27.5% of cable TV revenue and 27.1% of satellite broadcasting revenue. With subscriber numbers declining and another revenue source, reception fees, decreasing annually, even a few rounds of transmission fee reductions could make business impossible for some operators. However, maintaining the current transmission fees also poses challenges for the home shopping business environment. Last year, TV home shopping sales decreased by 2.5% to 3.0171 trillion won.
Experts suggest that to sustain the ecosystem, operators should show consideration for each other, and the government should actively mediate. Kim Yong-hee, a research fellow at Open Route, said, "While I agree that fees can be reduced due to weakened media power, consideration is needed regarding timing and scale. Excessive fee reductions in a short period will worsen the management environment of cable TV operators (SO) and satellite broadcasters, accelerating their merger into IPTV and creating a more unfavorable environment for home shopping." He added, "IPTV should also consider measures to reduce the rate of increase on a grand scale," and "the government should intervene in the overall transmission fee negotiation market with a fair standard to ensure operators can handle fee increases and decreases at manageable levels."
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