"Broadcast Transmission Fees, Can't Pay Like This"…Hyundai Home Decides to Suspend Broadcast Transmission

Lotte Home also notified D'Live of suspension from October
Will home shopping 'blackout' domino effect occur?

As Hyundai Home Shopping decided to suspend broadcasting due to transmission fee issues, concerns are rising that a home shopping 'blackout' might continue like a domino effect.

According to the home shopping industry on the 27th, Hyundai Home Shopping reportedly notified LG HelloVision that it would stop broadcasting transmission after the end of next month. If the transmission suspension becomes a reality, viewers watching paid broadcasts through LG HelloVision in 23 regions including Seoul (Yangcheon-gu, Eunpyeong-gu), Gyeonggi (Bucheon, Gimpo, Uijeongbu, Yangju, Dongducheon, Pocheon, Yeoncheon), Gangwon, Chungnam, and Gyeongbuk will no longer be able to watch the Hyundai Home Shopping channel. The number of LG HelloVision subscribers in these areas is 3.68 million households.

Earlier, Lotte Home Shopping also notified D'Live Gangnam Cable TV that it would suspend broadcasting transmission starting October 1. The reason home shopping companies voluntarily decided to suspend broadcasting transmission is due to transmission fees. Transmission fees are channel usage fees paid by home shopping companies to paid broadcasting operators, and the home shopping companies claim that excessively high transmission fees are affecting their profits.

In fact, two-thirds of home shopping companies' sales are transmission fees. Last year, the scale of transmission fees was 1.9065 trillion won, a 33.3% increase compared to 1.4304 trillion won in 2018. According to the Korea TV Home Shopping Association, transmission fees have increased by an average of 8% annually, reaching 65.7% of broadcasting sales last year.

As a result, the profit capacity of home shopping companies has significantly decreased. Hyundai Home Shopping recorded an annual profit of 155.7 billion won in 2020, but last year it shrank by 40 billion won to 112.7 billion won.

Furthermore, the home shopping industry points out that paid broadcasting operators are forcing home shopping companies to accept expensive channel positions. Paid broadcasting operators charge the highest transmission fees for channel numbers adjacent to terrestrial channels. Hyundai Home Shopping requested to move to a cheaper, lower channel number on LG HelloVision due to the burden of fees caused by poor performance, but it was reportedly not accepted. Since transmission fees account for a significant portion of home shopping sales, it is difficult for home shopping companies to accept channel number changes.

With Lotte Home Shopping and Hyundai Home Shopping deciding to suspend broadcasting, there is a high possibility that this will spread to other companies as well. This is because all home shopping companies are complaining about deteriorating performance and excessive fee burdens. An industry insider said, "While the population watching TV is decreasing, transmission fees are increasing," adding, "They can no longer bear the fees."

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