Domestic Music Industry Welcomes Ministry of Culture's Decision on 'Implementation of Music Copyright Royalty Win-Win Plan'

The Ministry of Culture, Sports and Tourism's approval of the revision to the 'Music Copyright Usage Fee Collection Regulations' has been welcomed by domestic online music service providers.

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On the 9th, domestic providers including Naver (Vibe), Dreamus Company (Flo), NHN Bugs (Bugs), YG Plus, Genie Music, and Kakao Entertainment (Melon) issued a statement saying, "We welcome the revision" and "We hope this will lead to greater stabilization of the domestic music industry."

On the same day, the Ministry of Culture, Sports and Tourism announced that it would implement a cooperative agreement on copyright fees for online music services in response to the increase in payment fees triggered by Google's mandatory in-app payment policy.

The revised Music Copyright Usage Fee Collection Regulations focus on excluding the 'in-app payment fees' resulting from the mandatory in-app payment policy from the calculation of 'sales revenue,' which serves as the basis for settling music usage fees. Only the prices for in-app payment services will be increased, while prices for PC web services will not be raised. When the usage fees for in-app payment services and PC web services are the same, the usage fees for in-app payment services will be settled using the pricing and settlement methods applied to PC web and other services.

This regulation will be applied temporarily to music usage fees for services provided from June last year through May 2024.

Domestic providers stated, "The mandatory in-app payment policy has caused difficulties in service operation, which could affect creators, record producers, rights holders, and users alike," adding, "This revision of the collection regulations is meaningful in eliminating confusion caused by differences in settlement methods between domestic and international online music service providers and minimizing consumer harm."

The domestic online music service industry predicted that without the revision of the collection regulations, a significant price increase would have been inevitable due to the additional in-app purchase (IAP) fee burden. They also expressed concerns that increased consumer harm and price burdens could lead to consumer attrition and cause an overall downturn in the domestic music industry.

Domestic providers said, "It is highly significant that stakeholders within the music industry have resolved key issues through intense and constructive discussions," and added, "We express our gratitude once again to the Ministry of Culture, Sports and Tourism and music rights holders (the four trust organizations and the Korea Music Content Association) who worked together to minimize consumer burden, guarantee rights holders' revenue, and enable fair competition with overseas providers through this revision of the collection regulations."

Furthermore, they added, "Domestic providers hope that the application of this revision will continue for the stability and growth of the domestic music industry, and we will continue to make our best efforts to provide high-quality music listening services at reasonable prices and to protect the rights of creators."

As the agreement reached through discussions between the Ministry of Culture, Sports and Tourism and stakeholders in the music industry is reflected in the revision of the collection regulations, concerns about consumer harm and price burdens are expected to be partially alleviated.

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