Culture Minister Meets OTT... Will There Be a Breakthrough in Resolving Conflict with Music Copyright Association?

First Meeting Between New Minister Hwang Hee and OTT Industry Leaders
Unresolved Copyright Fee Conflicts Between KOMCA and OTT Industry
Ministry of Culture Approved KOMCA Amendment in December
Interest in Whether Win-Win Solutions Will Emerge

[Asia Economy Reporter Cha Min-young] At the first official meeting scheduled for the 1st between representatives of the domestic online video service (OTT) industry and Hwang Hee, Minister of Culture, Sports and Tourism, the issue of music copyright fees is expected to be a key topic. With both sides holding parallel positions, attention is focused on what stance the Ministry of Culture, Sports and Tourism, which previously sided with the Korea Music Copyright Association (KOMCA), will take.

According to related industries and the Ministry of Culture, Sports and Tourism on the 1st, Minister Hwang Hee is scheduled to hold a meeting with representatives of domestic OTT companies at the Ministry’s Seoul office in the morning. Discussions will cover conflicts within the industry regarding music copyright fees and regulatory issues.

The conflict between the domestic OTT industry and KOMCA, which has continued since last year, remains unresolved into this year. The Ministry of Culture, Sports and Tourism approved a revised version of the 'Music Copyright Collection Regulation' submitted by KOMCA in December last year, despite ongoing disagreements within the industry over how to calculate music copyright costs included in the transmission of video content. There have also been criticisms that the prior opinion-gathering process was insufficient.

The new revision includes a provision for 'video transmission services' applicable to OTTs, raising the royalty rate from 1.5% to 1.9995% by 2026. This rate is significantly higher compared to other broadcasters such as comprehensive cable TV operators (SO) at 0.5% and IPTV at 1.2%.

KOMCA has increased pressure on the OTT industry by citing Netflix, which is known to pay a 2.5% rate. On the other hand, the OTT industry argues that a thorough discussion is needed starting with redefining concepts included in the royalty calculation method such as 'revenue' and 'retransmission.' There are also points raised that it is impossible to directly compare domestic companies with global OTT firms like Netflix, which keep specific copyright fee negotiation terms confidential.

Although a major promotion policy was announced last year, discussions are also expected regarding the sluggish implementation of support measures for the domestic OTT industry. Last year, the government, led by Prime Minister Chung Sye-kyun, announced the 'Digital Media Ecosystem Development Plan and Digital Inclusion Promotion Plan,' promising the promotion of the OTT industry through a joint effort of related ministries including the Ministry of Science and ICT, the Ministry of Culture, Sports and Tourism, and the Korea Communications Commission. The Ministry of Culture, Sports and Tourism is responsible for establishing the OTT Content Global Win-Win Council. The government also announced plans to introduce a voluntary rating system for OTT online video content.

A representative of the OTT council said, "The focus is expected to be mainly on the copyright fee conflict with KOMCA," adding, "There will likely be discussions about the slow progress of proposed policies such as last year’s policy support and voluntary video rating regulations."

Meanwhile, Minister Hwang Hee of the Ministry of Culture, Sports and Tourism met with the music industry, including KOMCA, on the 9th of last month and emphasized the need for coexistence. The attendees also conveyed that accurate data provision by users is important when setting copyright usage fees and expressed hope that the Ministry would establish a consultative body to discuss these issues with OTT operators.

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