"25% Increase Needed" IPTV Backlash Against CJ ENM... 'Content Usage Fee' Conflict Explodes

[Asia Economy Reporter Seulgina Jo] KT, SK Broadband, LG Uplus, the three major domestic IPTV providers, and CJ ENM, the largest media content company in Korea, have clashed head-on over content usage fees. While CJ ENM insists on receiving a fair price, the three IPTV companies argue that a 'maximum 25%' increase is an excessive demand, raising concerns that, in the worst case, major content supply could be cut off on each platform.

The Korea IPTV Broadcasting Association, composed of KT, SK Broadband, and LG Uplus, issued a joint statement on the 20th titled “Large content providers must immediately stop unreasonable fee increases and unfair trade practices,” stating, “Recently, large content providers have made an unreasonable demand to raise supply fees by more than 25% compared to the previous year,” and “They have even threatened to stop content supply if their demands are not met.”

The statement did not specify company names, but it is widely regarded as a direct public criticism of CJ ENM, with whom negotiations over content usage fees have recently been ongoing.

The association demanded in the statement, “Large content providers should stop unreasonable attempts to increase fees that burden viewers and restrict their choices, and engage in reasonable and fair negotiations.” It added, “This provider supplies the same content to its own OTT at a low price,” and demanded, “Stop discriminatory practices against pay-TV operators.” The claim is that CJ ENM supplies its internet video service (OTT) ‘Tving’ with content at a low price while restricting services other than live channels for pay-TV and demanding an unacceptable level of fees.

Additionally, the association demanded the withdrawal of CJ ENM’s notification that it would not supply content to the new service ‘Tablet IPTV’ devices. The ‘Pad TV,’ a tablet IPTV, has been recognized by the Ministry of Science and ICT as an IPTV terminal device. However, CJ ENM maintains its position that content supply is not possible.

CJ ENM immediately issued a rebuttal statement. CJ ENM argued, “The three IPTV companies are undervaluing the value of content excessively,” and “Despite being dominant players in the pay-TV platform market, the three IPTV companies set the lowest program usage fee rates compared to wired broadcasters or satellite platforms.” They claim this increase is a form of getting a fair price.

CJ ENM pointed out, “So far, IPTV has taken an excessive share.” Regarding the new IPTV terminal devices, CJ ENM dismissed the IPTV side’s argument, stating, “When new technology-applied services such as ‘Olleh TV Tab’ and ‘U+ TV Free’ are launched, usage fee negotiations can be conducted accordingly.”

At the same time, CJ ENM criticized domestic IPTV providers for giving preferential treatment to Netflix, Disney Plus, and others in a so-called ‘courting competition’ while neglecting domestic content. The revenue-sharing ratio between major IPTV providers and Netflix is known to be 1 to 9. In response, the IPTV association drew a clear line, stating that Netflix is a ‘Platform in Platform (PIP)’ type reseller, a different service from CJ ENM, which receives channel content and broadcasts it.

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