Second Major Verification Council Activated This Year on the 17th
Hyundai Home Shopping-KT Skylife Disagreement Intensifies
"Next Year's Negotiations Will Be More Difficult... Government Intervention Urgently Needed"
Although the fee verification consultative body between Hyundai Home Shopping and KT Skylife has been activated, the negotiations are expected to be difficult as both sides still show strong opposing positions. NS Home Shopping and LG Uplus, who were the first subjects of the fee verification consultative body this year, were able to reach an agreement thanks to their continuous dialogue, but such a scenario is unlikely to be expected from Hyundai Home Shopping and KT Skylife.
According to the home shopping industry on the 25th, the Ministry of Science and ICT (MSIT) held the first meeting of the fee verification consultative body for negotiations on transmission fees between Hyundai Home Shopping and KT Skylife on the 17th. After the fee negotiations between Hyundai Home Shopping and KT Skylife broke down on October 20, and Hyundai Home Shopping decided to suspend broadcasting transmission, KT Skylife requested the MSIT to activate the fee verification consultative body, which led to the start of the consultative body's operation. The core issue of the conflict is Hyundai Home Shopping's demand to move from the expensive channel (No. 6) to a somewhat cheaper channel in the 20s range. Even after applying for the consultative body, the two companies have continuously engaged in negotiations for the fee contract, but each has only asserted their firm positions without narrowing the gap.
The fee verification consultative body must notify the results to both companies within a maximum of 90 days. The 5 to 7 members appointed by the MSIT review whether there were any problems in the fee calculation process and whether the data was appropriately applied according to the formula established in the guidelines, and then provide their opinions.
Entering the fee verification consultative body does not mean the entire period must be used. NS Home Shopping and LG Uplus, who held the first fee verification consultative body this year, continued to reach an agreement autonomously without waiting for the consultative body's results, successfully concluding the fee contract. The MSIT also holds the position that it is preferable for the two companies to amicably determine the fees through agreement rather than maintaining the consultative body. Hyundai Home Shopping and KT Skylife are also being encouraged to reach an agreement through continuous dialogue outside the consultative body, but it is understood that both Hyundai Home Shopping and KT Skylife have closed the door to dialogue. A Hyundai Home Shopping official emphasized, “Currently, we are not conducting negotiations on two tracks outside the fee verification consultative body,” and “We made many proposals so that KT Skylife could accept a reasonable level, but they were not accepted.”
Industry: "More disputes expected next year... Need for government intervention grows"
As the gap between Hyundai Home Shopping and KT Skylife deepens, voices within the home shopping industry are rising, calling for active government intervention to fundamentally resolve the transmission fee issue. Currently, the government only presents guidelines and maintains a stance of not crossing the line with intervention.
An industry insider said, “With only guidelines, autonomous agreements between home shopping companies and broadcasters are increasingly difficult to achieve,” and added, “The mere movement toward government intervention can psychologically pressure both pay-TV operators and home shopping companies, so the need for active intervention is growing.”
Concerns within the industry are increasing as next year’s transmission fee negotiations are expected to be even more challenging than this year. Next year’s fee negotiations will be based on how much this year’s annual performance has increased compared to the previous year, but this year, home shopping companies’ performances have sharply declined compared to a year ago. If this year was a preliminary battle, next year will be the main game. Another home shopping industry official said, “Next year is actually the turning point rather than this year,” and lamented, “We have to negotiate with poor performance, and pay-TV operators who would suffer significant damage if fees are lowered will find it difficult to accept this, so disputes will inevitably increase.”
The government also appears to be closely monitoring this situation. An MSIT official said, “We are aware of concerns that more disputes may occur next year than this year,” and “While the basic principles will not change, we are considering measures to prepare for disputes.” The official also mentioned that if the industry agrees, adopting the U.S. Major League Baseball (MLB) arbitration method, which decides in favor of one side by majority vote on the final proposals submitted by the two companies involved in the fee conflict, could serve as an adequate dispute resolution mechanism. The MSIT official explained, “There are concerns about what happens if opinions are not accepted, but inquiries about this arbitration method continue, so it does not seem that there is no interest in this method,” and added, “It is applied in special situations such as planned transmission suspension, with the purpose of protecting viewers’ rights.”
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