[Public Voices] Deregulation and Support Policies for Cable TV Are Urgently Needed

During the COVID-19 pandemic, global media companies entered the domestic market through various channels, and the domestic content industry achieved remarkable growth in overseas markets. On the other hand, the media platform sector ended up losing a significant portion of the market to overseas platform companies combined with strong content. The penetration of online video service (OTT) companies such as Netflix into the domestic market exemplifies this. Overseas platform companies have emerged as formidable competitors to domestic platform companies, growing their influence as powerful forces that shake the entire ecosystem of the media industry.

The difficulties faced by cable TV, which was born with inherent limitations as a regional media, are intensifying, and its competitiveness as a platform operator is being pushed into crisis. Cable TV operators are primarily requesting deregulation, which relatively holds them back compared to OTTs.

The first is deregulation of channel transactions, which are the basic acts that constitute products. Unlike OTTs that freely program based on viewer data, cable TV currently faces rigid regulations such as regular programming changes, guidelines, and re-licensing conditions. Under these circumstances, it is difficult to respond to the rapidly changing media environment and changes in viewer behavior. Even changing channels that survive only by rebroadcasting other companies' content without producing their own is not easy. The inability to freely use limited channel frequency resources leads not only to a decrease in viewer benefits but also to a decline in competitiveness.

The second is the improvement of the content usage fee system. Disputes are increasing due to the rapid demands for price increases from large content providers such as terrestrial broadcasters and comprehensive programming channels (general programming channels) that have relatively superior bargaining power, including news functions. While cable TV revenues have been continuously declining, the proportion of costs paid to these channels relative to revenue rose from 44.5% in 2015 to 66% last year. In addition, there are protective policies for small PP (program providers) and a policy stance to get fair prices from PPs with global competitiveness, making it difficult for platforms like cable TV with regional license structures to conduct reasonable content transactions. It is urgent to establish measures to prevent short-term increases in program usage fees and institutional devices that enable reasonable transactions based on coexistence between content and platforms.

Policies such as adopting a fixed-rate system for content usage fees linked to subscription revenue could be alternatives. Cable TV operators are also strongly demanding support measures such as exemption from retransmission fees for terrestrial broadcasters on 8VSB products configured for low-income groups from a broadcasting welfare perspective, or tax credits for platform operators' content production costs or usage fees.

Third, they point to the simplification of the re-licensing system. Although institutional improvements are being made in line with the government's deregulation and self-regulation policies, they are still insufficient. Issuing corrective orders by including conditions that are difficult to enforce under the Broadcasting Act as attached conditions is making the business environment very difficult. It is time for a policy direction that maximizes business autonomy and induces investment by operators.

Support measures to strengthen the regionality of cable TV must also be considered. Support or reduction of payments from the Broadcasting and Communications Development Fund is necessary. Cable TV is the only paid broadcasting service that contributes in the public domain of regional channels. It continues to invest most proactively in regional election broadcasts and local disaster broadcasts, but support is minimal. Furthermore, outdated laws remain as regulatory provisions, such as clauses prohibiting commentary related to regional channel operations or restricting the scope of programs under current law.
Lee Raewoon, Chairman of the Korea Cable TV Broadcasting Association

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