Naver Changes 'Content Reproduction Fee' to 'Ad Revenue Sharing' for Sports and Entertainment Media

[Asia Economy Reporter Bu Aeri] Naver announced on the 21st that, like its news partner media outlets, it will change the business model for sports and entertainment service partner media outlets from a fixed article reproduction fee model to an advertising revenue sharing model.

Instead of paying news reproduction fees to media outlets last year, Naver decided to pay the newly introduced intermediate advertising revenue.

Yoo Bong-seok, Head of Naver Service Operations, explained at the online '2020 Sports and Entertainment Media Connect Day' held that day, "As the composition of each service area and users' content consumption patterns have changed, we want to reflect this in the business model of sports and entertainment service partner media outlets and change it accordingly."

Starting from November this year, Naver will provide all advertising revenue generated through articles, rather than fixed reproduction fees through individual negotiations, to sports and entertainment service partner media outlets, just as it has applied to Naver news partner companies.

The advertising revenue includes not only the revenue from ads within individual article bodies but also the portion of advertising revenue generated through articles on the mobile Naver main sports and entertainment pages.

The revenue sharing criteria for advertising sales on the sports and entertainment page home are based on a news distribution formula commissioned to external researchers, with an added factor reflecting the characteristics of sports and entertainment media: the 'number of journalist subscribers.'

Yoo said, "Even for articles about the same sports game or identical entertainment content, users actively subscribe depending on whether the article presents new and fresh interpretations or the stance of the team they support," adding, "We want to use subscription numbers as a measure of user loyalty to reflect qualitative value."

From the fourth quarter of this year, new revenue areas such as 'intermediate ads within article bodies' will be added to sports and entertainment news articles, just like existing news articles, and tools will be provided to allow specialized sports and entertainment media to open 'media homepages.' Subsequently, exclusive rights to all advertisements related to individual article areas (media homepage, intermediate article ads, bottom article ads) will also be provided.

If the media outlets' revenue decreases compared to the existing fixed reproduction fees after the introduction of the new business model, Naver plans to secure separate funds to compensate for three years.

Yoo concluded, "The new business model will be a sustainable growth foundation for both Naver and sports and entertainment partner media outlets," and added, "As has been the case so far, we will continue to provide technical and operational support so that Naver can continue various attempts as the most important service partner."

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