Ministry of Science and ICT Adopts CJ ENM's Increase Proposal in CJ ENM-D'Live Fee Dispute

[Asia Economy Reporter Kim Heung-soon] The government mediated the dispute between CJ ENM and D’Live over program usage fee increases and sided with the increase proposal presented by CJ ENM.

On the 16th, the Ministry of Science and ICT held a mediation committee meeting regarding the program usage fee dispute between CJ ENM and D’Live and announced that it adopted the increase rate proposed by CJ ENM as the mediation proposal.

The dispute mediation was conducted by having the mediation committee decide by majority vote on one of the increase rate proposals submitted by the two companies, selecting the one deemed more reasonable and valid, instead of the government proposing a specific increase rate as the mediation proposal.

As a result, regarding the 2020 program usage fee that D’Live will pay to CJ ENM, four votes supported CJ ENM’s proposal as valid, while three votes supported D’Live’s proposal. Accordingly, the Ministry of Science and ICT adopted CJ ENM’s increase rate, which received the majority support, as the final mediation proposal.

The increase rate in the mediation proposal will not be disclosed because negotiations on usage fees between other pay broadcasters and broadcasting channel usage operators are ongoing, and both companies requested confidentiality for business secrets.

Earlier, on the 4th, the Ministry of Science and ICT formed a dispute mediation committee consisting of seven experts from various fields including broadcasting, management/accounting, and law, in accordance with the dispute mediation method agreed upon by the two companies. Each company also submitted their desired year-over-year increase rate proposals. The dispute mediation committee reviewed the submitted written materials and held two hearings (September 14 and 16).

CJ ENM, which operates broadcasting channels such as OCN and tvN, demanded a 15-30% increase in program usage fees from pay broadcasters including Internet Protocol TV (IPTV) and cable TV in July. In response, cable TV operator D’Live opposed the demand, calling it unilateral.

The difference in positions between the two companies was so significant that at one point a “blackout”?the suspension of CJ ENM’s broadcast program transmission to D’Live?was even mentioned, but the Ministry of Science and ICT’s mediation averted this situation. However, the companies failed to narrow their differences afterward, and ultimately the increase rate was determined through government mediation.

The Ministry of Science and ICT stated, “According to this mediation method, the gap between the two companies, which started from a freeze (D’Live) and a 20% increase (CJ ENM), was significantly reduced by the time of the final mediation meeting,” and added, “We hope this will become a new precedent for dispute mediation as it adopts a more reasonable proposal through sufficient expert discussion.”

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