tvN Unavailable...? LG Uplus and CJ ENM Enter Final Negotiations

Breakdown on the 12th with 10 Channels
U+ Mobile TV Broadcast Suspended
IPTV Industry on Alert

[Asia Economy Reporter Cha Min-young] LG Uplus and CJ ENM, which have been in conflict over program usage fee negotiations this year, will sit at the final negotiation table on the 11th. If negotiations fail, the transmission of 10 channels including tvN on LG Uplus's U+mobiletv may be suspended.

LG Uplus and CJ ENM plan to engage in the final content usage fee negotiations on this day. The negotiation results are expected to be announced in the afternoon. If no meaningful progress is made in the negotiations, transmission is scheduled to be suspended from midnight on the 12th. The affected channels are 10 channels owned by CJ ENM, including tvN, XtvN, Olive, Mnet, and Tooniverse.

The core of the controversy is the program usage fee payment rate that paid broadcasting channels providers (PP) receive from pay TV operators. The three IPTV companies stated that CJ ENM demanded a 25% increase in program usage fees compared to the previous year, citing increased content production costs. It is reported that they demanded up to a 1000% increase for online video services (OTT). The IPTV side argues that this is an unreasonable demand that does not consider the difficulty of raising pay TV prices due to household communication cost burdens. In response, a CJ ENM official said, "It appears high due to the base effect of providing content at a very low price linked to existing IPTV fees."

Among the three IPTV companies, LG Uplus has taken the lead, but KT and SK Broadband are also paying close attention to this negotiation. KT's OTT subsidiary, KT Season, is also negotiating with CJ ENM. A pay TV industry official hinted, "In the old cable TV days, there was a perception that even a slight delay in the speed at which the TV turned on was a problem," adding, "Channels not being available is the worst situation from the broadcaster's perspective."

Within the industry, mid- to long-term cooperative solutions such as the 'Pay TV Win-Win Council,' 'PP Evaluation Committee,' and the legalization of 'limited pre-contract supply' are being discussed. Since June 2018, the government has planned to supplement the negotiation imbalance between pay TV operators and PPs, establish and disclose channel evaluation, contract procedures, and standards reflecting PP opinions to ensure fair trade, and monitor compliance. However, there is no immediate effectiveness.

An industry official pointed out, "The practice of retransmission fees for terrestrial broadcasters, program usage fees for general PPs and comprehensive programming PPs being decided through individual negotiations without a certain compensation calculation standard has not disappeared," adding, "Ultimately, the entire market is controlled by powerful platforms or PPs." There is a call for a standard contract for pay TV operators and PP broadcasting program supply contracts and unified standards.

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