Naver Vibe 'Naedonnaedeut' Settlement... Some Earnings Increased by 40%

[Asia Economy Reporter Buaeri] Naver announced on the 25th that it has applied the 'Individual Settlement Method (VPS)' to its music service VIBE.

The VPS (VIBE Payment System), which Naver announced it would introduce in March, is a system that pays money only to the copyright holders of the music that consumers listen to. It calculates the settlement by dividing the subscription fee paid by an individual user by the total number of plays, then multiplying by the number of times a specific track was played.

Most domestic music sites such as Melon and Genie Music adopt a 'proportional distribution' settlement method, which distributes the total revenue from users' streaming service monthly subscription fees and advertising fees according to the streaming share of each singer. Under this method, if a song ranks high on the charts, it can receive a large amount of music usage fees, making it difficult to resist the temptation of chart manipulation known as 'music fraud'.

Brokers used macros (automatic repetition programs) to infinitely repeat songs to raise rankings and earn profits. In the proportional distribution system, the monthly subscription fee of users who only listen to indie bands is also delivered to idol singers at the top of the charts, causing criticism that it deepens the 'rich get richer, poor get poorer' phenomenon. Naver devised VPS to improve these issues.

According to Naver, out of 297 domestic and international music distributors supplying music to VIBE, VPS settlement has been applied to 280 companies. Some large distributors, distributors owning music streaming services, and some distributors expected to see reduced revenue from VPS settlement are currently postponing adoption.

Naver stated that the settlement results through VPS matched the simulation results announced before the actual introduction. Although the settlement amount for music intensely listened to by a small number of users decreased, the settlement amount for music widely listened to by many users in the month?such as mid-tier singers, drama OSTs, and artists newly recognized for songs released long ago?increased by up to about 40%.

On the other hand, the settlement amount for music registered under common nouns (such as lullabies, prenatal education songs, children's songs) misused in the AI recommendation system and music with abnormally detected per capita play counts decreased significantly.

Gu Gyo-cheol, head of Blending Music Business Division distributing the OST of the drama "Itaewon Class," which actually conducted settlement according to VPS, said, "I had high expectations for VPS, which can recognize the value of music loved by many people through settlement amounts, and the settlement amount increased as expected in this first settlement." He added, "I hope that through VPS, a fairer distribution can be made for music widely loved by the public, not just big stars, contributing to the diversity of music."

Lee Tae-hoon, Naver Music Business Leader, said, "Although not all rights holders supplying music to VIBE participated in the first settlement, the number of distributors who sympathize with the purpose is increasing, and we could see a trend similar to the simulation results before actual application." He added, "We will continue steady communication with non-participating companies so that more musicians can directly feel the reactions of users who resonate with their music through VPS."

This content was produced with the assistance of AI translation services.