Between Content Providers and Home Shopping... Pay TV Stuck Without Moving

Conflict Over Home Shopping Broadcast Fees Reduction Amid Content Cost Increase Demands

[Asia Economy Reporter Cha Min-young] The IPTV industry, including the three major IPTV providers KT, SK Broadband, and LG Uplus, along with the paid broadcasting sector, is facing a double burden due to conflicts over content cost burdens and reductions in TV home shopping transmission fees.

According to industry sources on the 21st, CJ ENM is demanding a 25% increase in IPTV real-time channel usage fees from the three IPTV providers, citing increased content production costs. For Season, an online video service (OTT) operated by KT, and LG Uplus's U+ Mobile TV, CJ ENM is demanding a 1000% increase. They are also claiming that separate fees should be paid for tablet PCs recognized as IPTV terminals by the Ministry of Science and ICT, such as 'Pad TV'.

The industry issued an unusual joint statement in protest. The three IPTV providers said the day before, "CJ ENM is demanding a 25% fee increase, which is an unreasonable attempt to raise fees that increases the burden on viewers and infringes on their choice," and criticized that "the share allocated to other small and medium-sized broadcasting channel operators (PPs) may decrease." Regarding OTTs, it was pointed out that CJ ENM is applying harsher standards as it directly competes with Tving.

To cover the increasing content costs, revenue must be increased, but this is not easy. With the popularity of OTTs like Netflix leading to code-cutting (subscription cancellations) by general consumers, raising monthly fees is difficult. From the perspective of telecommunications companies as period operators, they have no choice but to consider public sentiment. They are structurally dependent on transmission fees received from major PPs such as home shopping channels. However, the home shopping industry is also expressing difficulties to platforms due to loss of competitiveness caused by the growth of live commerce and e-commerce.

At a seminar held the day before on "Measures to Create a Reasonable Trading Environment within the Paid Broadcasting Ecosystem," hosted by the Korean Media Policy Association and the Korean Broadcasting Association, the Korea TV Home Shopping Association and the Korea T-commerce Association demanded active government market intervention and effectively lowering the transmission fee increase rates across the IPTV, cable TV, and satellite broadcasting industries.

The paid broadcasting industry insists that realistic measures considering both revenue and cost aspects are necessary. Kim Hyuk, Head of Media Strategy at SK Broadband, pointed out, "If gross profit forecasts are available, we would take some action regarding the (home shopping transmission fee) increase rate, but if one side applies one set of rules and the other side applies another, this will inevitably lead to further conflicts."

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