[The Editors' Verdict] Approaching OTT Copyright Issues

Seong-Yeop Lee, Professor at Korea University Graduate School of Technology Management and Director of the Technology Law Policy Center.

The intelligent information society, where all objects and humans are connected through a hyper-connected infrastructure and accumulated data, significantly enhances the cognitive abilities of humans and objects, thereby improving problem-solving capabilities, accompanies technological innovation. Such technological innovation inevitably increases the need to protect intellectual property rights such as copyrights and patents. Meanwhile, information and communication technology (ICT) plays a role not only in networks that transmit knowledge and information but also in supporting the creation and utilization of knowledge and information. Additionally, it also serves to protect knowledge and information through information security and personal data protection. Ultimately, ICT contributes to the formation and development of intellectual property both as a direct purpose for the creation, utilization, and protection of intellectual property and as a foundational infrastructure for these purposes. However, the recent trend of ICT, which leads data-driven innovation in the era of the Fourth Industrial Revolution, focuses on data sharing, openness, and utilization, sometimes creating tension with intellectual property, which seeks to exclusively protect knowledge as a right.

Recently, issues surrounding internet video services (OTT) and copyright are an example of such tension. In December last year, the Ministry of Culture, Sports and Tourism approved the amendment to the Korean Music Copyright Association’s (the Association) music copyright usage fee collection regulations, which introduced provisions applicable to video transmission services for OTT. According to this, the music copyright usage fee will start at 1.5% of sales this year and be set at 1.9995% from 2026. Domestic OTTs such as Wavve and Watcha have argued that the 2.5% usage fee demanded by the Association is excessive and that, given the nature of OTT as a catch-up service, it is reasonable to pay a usage fee of 0.625% of sales, which corresponds to the level for retransmission services under the Association’s collection regulations. On the other hand, the Association emphasizes that OTT is a service of a different dimension from traditional retransmission services and that the usage fee standards of major global music copyright management organizations for OTT are above 2.5%. The conflict is expected to continue as OTT providers have filed administrative lawsuits against the amended collection regulations.

Unlike catch-up services that allow viewers to watch desired content at their preferred time, OTT should be considered different from retransmission services in that it allows viewing content not only at the desired time but also at the desired place and even while on the move. It is recognized that OTT differs from traditional broadcasting in that it uses a general-purpose internet network rather than a broadcasting network and provides an on-demand service rather than one-way transmission. Legally, it is defined as a special type of value-added telecommunications business. Ultimately, OTT is a service applying new digital technologies, providing much greater consumer utility, so the argument to maintain the traditional collection rate is not very persuasive. However, as important as strengthening rights to works to encourage creativity is the sharing and utilization of intellectual property to spread the fruits of innovation throughout society and thereby induce new innovation. In this regard, raising the OTT music copyright collection rate could lead to increased costs for consumers and potentially harm the competitiveness of domestic OTTs, which are still in their infancy and struggling against global OTTs like Netflix, so a cautious approach is necessary.

If intellectual property focuses solely on asserting rights, it may lose the greater benefits that can be gained from the vast flow of information and communication characterized by openness, sharing, and utilization. In the future, a virtuous cycle is needed in which ICT acts as the cornerstone of intellectual property, and conversely, intellectual property promotes the informatization of society, the development of the ICT industry, and information security, ultimately enriching ICT itself.

Seong-Yeop Lee, Professor at Korea University Graduate School of Technology Management and Director of the Technology Law Policy Center

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