"In the Era of Multi-Homing Across Multiple Platforms... Content Fee Standards Must Change"

Triple Burden on the Cable TV Industry:
Content Acquisition Costs, Retransmission Fees, and Declining Advertising Revenue
"Lower Rates Needed for Overlapping Content Consumption"

There has been a claim that, in the era of multi-homing?where consumers use multiple platforms such as online video services (OTT), internet TV (IPTV), and cable TV simultaneously, consuming content without restrictions of time or place?the system for determining content fees must also change.

At a media study session held by the Korea Cable TV Association on April 24, Han Junghoon, CEO of K-Entertech Hub, stated, "It is noteworthy that multi-homing viewers are still watching cable TV even while using OTT or IPTV." He explained that this means the public value and locality of content unique to cable TV?such as real-time news, emergency broadcasts, and hyper-local information?continue to serve an important function.

Han pointed out, "Nevertheless, the domestic cable TV industry is under triple pressure: the cost of securing content, the burden of retransmission fees, and declining advertising revenue." The biggest issue, he said, is that the current content usage fee structure is still designed on the premise of a single-platform distribution environment, and therefore does not reflect multi-homing. Han stressed, "The structure in which each platform must pay separate fees leads to excessive cost burdens, which are highly likely to result in increased viewer subscription fees."

Overseas, the principle of 'incremental pricing' has been introduced. This approach sets appropriate fees only for exclusive consumption of content, while applying lower rates to overlapping consumption. This principle was applied in the 2023 negotiations between Disney and Charter Communications in the United States. Charter argued that the existing transmission fees were unfair because Disney content was being distributed through various channels, including OTT. As a result, Disney agreed to provide some content without additional charges as part of the negotiation.

Han advised, "In Korea as well, an AI-based analysis system that considers viewership ratings, advertising revenue, and viewer preferences should be introduced to rationally determine content fees, and the government should establish standards to systematically verify this process."