OTT Copyright Royalty Rate Approved at 1.5%... KMCIA "Considering Only OTT"

Ministry of Culture Approves Collection Regulation Setting OTT Copyright Usage Rate at 1.5%
Music Copyright Association "We Advocated 2.5% but Approval at 1.5% Is Regrettable"

[Asia Economy Reporter Han Jinju] The Korea Music Copyright Association, a creators' organization, expressed regret over the government's decision to set the copyright rate for online video service (OTT) music at 1.5%.

On the morning of the 11th, the Ministry of Culture, Sports and Tourism announced the revised approval of the "Music Copyright Usage Fee Collection Regulation Amendment" submitted by the Korea Music Copyright Association in July. In response, the association stated that this was "a result of considerable consideration of domestic OTT operators."

The core of this regulation is that Article 24 (Transmission Service of Video Works), which applies to OTT services, will collect copyright usage fees starting from 1.5%. For example, if the sales amount is 100 million KRW, the copyright fee to be paid is the amount obtained by multiplying 1.5 million KRW (music copyright usage fee) by the annual coefficient and the music copyright management ratio. The rate will start at 1.5% next year and gradually increase to 1.9995% by 2026. The government finalized the rate after gathering stakeholder opinions since the end of July, consulting the Music Industry Development Committee, and reviewing through the Korea Copyright Commission.

Previously, the Korea Music Copyright Association, based on reports from the International Confederation of Societies of Authors and Composers, over 10 domestic and international contract precedents, and regulations from more than 20 countries, proposed setting the rate at 2.5%, but this was not accepted. On the other hand, the OTT industry argued that 0.625% is appropriate according to the "Broadcast Re-transmission Service" regulation applied to VOD services.

A representative from the association said, "Internationally, the rate for video services such as movies and entertainment is generally 2.5%, and we actively presented this," but expressed regret that the 1.5% rate was approved. "Despite having solid existing contracts with Netflix and several domestic OTT companies over the years, it is unfortunate that the rate was approved lower due to opposition from some non-contracted companies."

The association added, "Unlike the original proposal from the creators' side, we plan to submit a statement to the Ministry of Culture, Sports and Tourism regarding the significant reflection of OTT opinions on the music copyright management ratio and annual coefficient."

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