"KRW 1.5 Million per KRW 100 Million in Sales"…OTT Music Copyright Rate Set at 1.5%
Ministry of Culture, Sports and Tourism Approves Revision of Music Copyright Fee Collection Regulations
[Asia Economy Reporter Kim Heung-soon] Domestic online video service (OTT) providers will have to pay 1.5% of their total sales as usage fees for music copyrights included in video content next year. For an OTT provider with sales of 100 million KRW, 1.5 million KRW will be set as the music copyright usage fee.
The Ministry of Culture, Sports and Tourism announced on the 11th that it has revised and approved the music copyright usage rate that OTT providers must pay, based on the amendment to the music copyright usage fee collection regulations submitted by the Korea Music Copyright Association (KOMCA), a music copyright trust management organization, in July.
According to the approved amendment, a new clause for "video transmission service" applicable to OTT was established. The music copyright usage rate for OTT videos where music copyrights are used as a subsidiary purpose will start at 1.5% in 2021 and will be gradually increased annually to a final rate of 1.9995% in 2026. Additionally, considering the existence of multiple music copyright trust management organizations, a music copyright management ratio was added, representing the proportion of music copyrights managed by KOMCA among the total music copyrights used by the user.
Based on next year, OTT providers with sales of 100 million KRW must pay music copyright fees calculated by multiplying 1.5 million KRW by the annual coefficient and the music copyright management ratio. For content primarily using music copyrights such as music entertainment and live performances, the music copyright usage fee is set at 3.0% for sales of 100 million KRW. In this case, the copyright fee is calculated by multiplying 3 million KRW by the annual coefficient and the music copyright management ratio.
The Ministry of Culture, Sports and Tourism explained, "The level of music copyright usage rates was decided by referring to existing domestic contract cases and overseas cases, while considering the domestic market situation and the conditions of providers."
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Previously, KOMCA submitted an amendment proposing a music copyright usage rate of 2.5% of sales, citing reports published by the International Confederation of Societies of Authors and Composers (CISAC) and contracts with global OTT Netflix. On the other hand, major domestic OTT companies such as Wavve, TVING, and Watcha argued that about 0.625% of sales is appropriate, based on the existing "broadcast retransmission service" regulations applied to broadcasters' internet catch-up services.
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