"Pay as Much as Netflix"... OTT Music Royalties Struggling to Find Common Ground

KOMCA "Domestic OTTs Must Pay 5 Times More"
Wave, Watcha, Tving Demand Joint Negotiation

[Image source=Yonhap News]

[Asia Economy Reporter Kim Heung-soon] The issue of music copyright fee payments included in online video services (OTT) remains unresolved between the Korea Music Copyright Association (KOMCA) and domestic OTT providers. KOMCA insists that domestic OTT platforms should pay music copyright fees at a level similar to that of global OTT Netflix, citing their contract with Netflix as a basis. Domestic OTT companies counter that they should pay copyright fees according to the retransmission service regulations for broadcasts approved by the Ministry of Culture, Sports and Tourism. The amount KOMCA demands is about five times higher.

According to industry sources on the 22nd, three domestic OTT providers?Wavve, Watcha, and Tving?sent an official letter to KOMCA the day before requesting a "joint consultation on music copyright." The deadline for a response is set for the 27th. They recently formed the "OTT Music Copyright Countermeasure Council." An industry official said, "There are additional OTT providers expressing their intention to join the council," adding, "We have conveyed our intention to renegotiate the copyright fee calculation standards with KOMCA by the end of this month and are awaiting a reply."

KOMCA recently demanded that domestic OTT providers pay copyright fees at a rate of about 2.5% of their sales, based on the music copyright rate contracted with Netflix. They also sent a certified letter indicating that legal action could be taken if negotiations fail.

Domestic OTT providers rebutted, saying, "KOMCA has not disclosed the exact calculation basis for the copyright fee payment method contracted with Netflix," and added, "It is unacceptable to insist on the same rate as Netflix without accepting the request to establish new calculation standards."

Currently, there are no separate collection regulations related to music copyrights used in OTT services. Therefore, domestic OTT providers have demanded that copyright fees be collected according to the 'retransmission service for broadcasts' regulations applied to broadcasters' streaming services. According to these regulations, the music copyright fee that OTT providers must pay is about 0.56% of sales.

The Ministry of Culture, Sports and Tourism, the competent authority, stated, "It is difficult to directly apply the copyright fee calculation standards stipulated in the retransmission service for broadcasts to OTT providers," and added, "An appropriate calculation standard through negotiations between providers is necessary." An OTT industry official also emphasized, "Instead of unconditionally demanding the same level as global providers, a new music copyright fee payment regulation considering the scale and circumstances of domestic providers should be established."

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