CJ ENM CEO Delivers Harsh Critique: "Need to Modernize K-Content Distribution and Allocation Structure"

Kang Ho-sung, CEO of CJ ENM, Criticizes at Press Conference on 31st
Overseas OTTs Entering Production
Calls for Improvement in Distribution Structure to Reduce Excessive PPL Dependence

Kang Hoseong, CEO of CJ ENM

[Asia Economy Reporter Cha Min-young] Kang Ho-sung, CEO of CJ ENM, sharply criticized the conflict between the content industry and IPTV over appropriate content usage fees, stating that "the content distribution and allocation structure must also be advanced to meet global standards."

At a press conference held on the morning of the 31st at the CJ ENM Center in Sangam-dong, Mapo-gu, Seoul, CEO Kang pointed out, "The value of K-content is globally recognized for its excellence, but I have not seen a platform in Korea that can sustain growth in the content supply structure."

He added, "Overseas online video services (OTT) are directly entering production, and if this continues with interest only in Korean content, there is a very high possibility of becoming dependent on major OTTs," urging that "the problem needs urgent resolution."

He also expressed discomfort toward the IPTV sector within the paid broadcasting industry. Recently, CJ ENM and the three IPTV companies have issued statements opposing each other over content usage fees, escalating tensions. CJ ENM demanded a 25% increase in IPTV real-time channel usage fees from the three IPTV companies, citing rising content production costs. For KT-operated OTT Season and LG Uplus U+ Mobile TV, they are demanding a 1000% increase. IPTV providers argue that it is difficult to raise consumer fees due to household communication fee burdens, leading to a deadlock in negotiations.

In response, CEO Kang pointed out that content producers need stable funding sources such as subscription fees to reduce excessive reliance on additional revenue sources like product placement (PPL). He said, "When supplying to IPTV companies and producing programs, only about one-third of production costs can be recovered through subscription fees, so additional revenue must be carefully considered," adding, "In the U.S., they receive between 100% and 120%, so changes are necessary for K-content to advance globally."

He also highlighted the issue of content being supplied before contracts are finalized, a point of sharp contention between IPTV, cable broadcasters, and program providers (PPs). CJ ENM advocates for a pre-contract, then supply approach. He explained, "With the introduction of comprehensive programming channels, contract signings have been delayed, and the practice of supplying content first and determining contract amounts later seems to have become entrenched," pointing out that "content producers bear all the risk without being able to predict recoverability."

On this day, CJ ENM announced its vision to become a global total entertainment company and revealed plans to invest 5 trillion won in content over the next five years. This year, they will invest 800 billion won in content, building systems and infrastructure to secure major intellectual property (IP) in films, dramas, entertainment, and music.

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