[Invest&Law] OTT with Wings, Broadcasting Caught in the Net

While online video services (OTT) are rapidly growing under loose regulations, traditional broadcasting media remain bound by strict regulations, highlighting the urgent need for legislative improvements to ensure fair media competition. Legal experts also voice concerns that the government’s application of regulations favoring certain operators could undermine a fair competitive environment, calling for a review of the current legal framework.

[Image source=Beomryul Newspaper]

Rapid Growth of OTT and Stagnation of Traditional Broadcasting

Since the OTT market has been established, the OTT industry has experienced rapid growth, whereas traditional broadcasting media have shown stagnation in growth.

According to a report released in March this year by the Media and Content Industry Convergence Development Committee, OTT revenue increased by 118.52% between 2018 and 2022, while terrestrial broadcasting saw only a slight increase of 9.47%. Comprehensive cable TV operators (SO) decreased by 13.88%, and satellite broadcasting declined by 8.93%.

Traditional Broadcasting Bound by Unreasonable Regulations

There are many sponsorships or advertisements possible on OTT platforms but not on traditional broadcasting. This is because different regulations apply, such as △the obligation to report terms and conditions to the Ministry of Science and ICT from a fee perspective △content scheduling regulation obligations △advertising regulations including limits on advertising time.

For example, YouTube broadcasts can receive sponsorships or advertise alcoholic beverages with an alcohol content above 17 degrees, but this is not allowed on traditional broadcasts. This is because current broadcasting advertising review regulations prohibit advertisements for specific items such as infant formula or alcoholic beverages above 17 degrees.

Issues of Regulatory Fairness Between OTT and Traditional Broadcasting

The standards were established in the past and are criticized as outdated in today’s media environment.

Jae-hyung Ahn (53, Judicial Research and Training Institute Class 34), head of the legal team at SBS, said, “Current broadcasting laws and regulations contain many unreasonable restrictions. For example, the Medical Service Act prohibits medical advertisements only on broadcasts under the Broadcasting Act, but considering the influence of media, there seems to be no justifiable reason to regulate online video platforms like YouTube differently.” He added, “Rather, this causes an information gap for medical consumers, limiting their proper choice between Seoul and provincial areas, as well as between large hospitals and small- to medium-sized hospitals.”

Seung-hyuk Han (49, Class 33), a lawyer at Yulchon LLC, pointed out, “As competition between paid broadcasting and OTT becomes more visible, the lack of ‘same service, same regulation’ means that competitiveness is determined not by service quality but by differences in regulatory intensity.” He suggested, “It is preferable to ease regulations on paid broadcasting rather than strengthen regulations on OTT.”

By Hyun Ahn, Legal News Reporter

※This article is based on content supplied by Law Times.