CJ ENM, "IPTV 3 Companies Severely Undervalue Domestic Content"

[Asia Economy Reporter Eunmo Koo] CJ ENM has rebutted the statement released by the Korea IPTV Broadcasting Association, composed of KT, SK Broadband, and LG Uplus, which claimed that the increase rate of program usage fees was excessive, arguing that the three IPTV companies are undervaluing the content's worth.

On the 20th, CJ ENM expressed its position through a statement regarding ▲ the increase in program usage fees for IPTV live channels ▲ the increase in program usage fees for IPTV-affiliated OTT live channels ▲ and the calculation of compensation for new technology-applied services such as Pad TV.

First, regarding the increase in program usage fees for IPTV live channels, CJ ENM argued that the three IPTV companies are excessively undervaluing the content's value. CJ ENM stated, “According to data from the Korea Communications Commission, only 16.7% of the basic channel subscription fees and home shopping transmission fees collected by IPTV from customers in 2019 are distributed to all PPs as compensation for supplying live channels. Compared to domestic platforms such as music, webtoons, and theaters, which distribute about 50-70% of customers' content usage fees to content providers, the current share taken by paid broadcasting platforms is excessive.”

CJ ENM further explained, “In particular, although the three IPTV companies are dominant players in the paid broadcasting platform market, they set the lowest program usage fee rates compared to cable TV operators (SO) or satellite platforms, and the transmission fees IPTV companies receive from home shopping channels have increased by an average of 39.3% annually over the past five years.”

Regarding the increase in program usage fees for OTT live channels operated by IPTV, CJ ENM emphasized that it is important to determine how to classify the OTT service operated by IPTV. CJ ENM stated, “While IPTV claims that the service is simply a ‘mobile IPTV’ that transfers its paid broadcasting platform IPTV service to a mobile environment, we maintain that the service is clearly an ‘OTT service.’”

They added, “Since the service has a different pricing structure, a separate subscriber route, and additional separate content from IPTV, starting this year, we are requesting separate renegotiations apart from the IPTV contract under the judgment that ‘fair compensation for content’ fitting the OTT’s status due to user expansion is necessary.”

Lastly, regarding the issue of calculating compensation for new technology-applied services such as Pad TV, CJ ENM said, “While there is no reason to reject the emergence of new platforms based on technology and innovation, we deeply regret that the Korea IPTV Broadcasting Association’s statement implied that we are obstructing the introduction of such services.” They continued, “When new IPTV technology-applied services like Pad TV are launched, it is simply a matter of sincerely providing content providers with technical protection measures related to copyright and subscriber data, and negotiating usage fees accordingly.”

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