Broadcast Platforms Demand Inclusion of Mobile Sales... TV Home Shopping Faces Renewed Clash Over Transmission Fees

Platform Industry Proposes Standards Ahead of Government

All Sales from Broadcast-Linked Product Codes Should Be Included

Home Shopping Industry Warns: "Basis for Transmission Fee Hike"

Government Has Yet to Start Detailed Discussions

While the government remains inactive in revising the standards for home shopping channel usage contracts (transmission fee guidelines), the pay-TV platform industry has proactively developed a joint proposal. The core of this proposal is that, if a product is attached with a ‘broadcast-linked product code,’ then all revenue generated from that product—regardless of the order route or sales method—should be recognized as broadcast sales. The home shopping industry is showing resistance, arguing that the platform side’s demands could be used as grounds for raising fees. The conflict between the two sides thus appears set to flare up again.

According to industry sources on September 23, Internet Protocol Television (IPTV) and System Operator (SO) sectors have drafted a joint proposal regarding the revision of home shopping transmission fee guidelines. It is understood that, at a recent working-level meeting, they gathered opinions on the content of the proposal.

The Full Amount of Products with 'Broadcast-Linked Product Code' Should Be Reflected

Transmission fees are the payments home shopping companies make to broadcast their programs via IPTV, SO, and satellite broadcast channels. These fees are determined through negotiations between businesses, taking into consideration the previous year’s fee, broadcast sales, platform subscriber numbers, and channel numbers. However, significant differences in opinion over which sources of revenue and subscriber bases should be counted for the fee calculation have led to annual disputes between the parties.

To reduce such conflicts, the government established guidelines in 2017 and amended them in 2023 to address pricing factors and negotiation procedures. The current guidelines require that total broadcast product sales and changes in the number of pay-TV subscribers be fundamentally reflected in fee negotiations. Broadcast product sales made via mobile and the internet, as well as viewership data, are reflected only to the extent agreed upon by the participants.

The core of the platform industry’s joint proposal is to clarify the inclusion criteria for mobile and internet sales, which were left to mutual agreement under the 2023 guidelines. The platform industry argues that any sales of products with a “broadcast-linked product code” should count towards total broadcast product sales, regardless of order route or contract/sales method. This means that not only calls to customer service, but also orders placed via mobile applications and online malls, should be included. They also hold that contract types—flat-rate, proportional, hybrid, or direct transactions—should not be a differentiator.

The platforms also requested that increases or decreases in adjacent channel fees be explicitly stipulated as considerations in calculating fees. While current guidelines include factors such as viewership data and other home shopping broadcasting elements, the actual scope of their reflection is left to mutual agreement between parties. The platform industry’s position is that each element should be codified to ensure more precise inclusion in negotiations. They also demanded an extension of the negotiation period. Currently, the guidelines allow five months for basic negotiations and up to three additional months after contract expiration.

Home Shopping Industry Burdened by Potential Fee Increase, Government Still Stalled

The home shopping industry counters that it is not appropriate to uniformly classify mobile sales as broadcasting results. They argue that, even if a product is introduced on a broadcast, if the consumer purchases it after searching portals, comparing prices, or taking advantage of app discounts, it cannot be concluded that TV broadcasting drove the sale. Home shopping providers are concerned that including all revenue from broadcast-linked products as broadcast sales could exaggerate the channel’s contribution, providing a rationale to maintain or even increase transmission fees.

There is also dissatisfaction about including fluctuations in channel usage fees as an explicit consideration. The industry argues that platforms could shift the costs they pay to adjacent program providers (PPs) onto home shopping companies. It is reported that the home shopping industry has yet to finalize its collective stance to counter the platform side’s joint proposal.

According to the “2025 TV Home Shopping Industry Report” by the Korea TV Home Shopping Association, the seven TV home shopping companies paid 1.9212 trillion won in transmission fees to pay-TV providers last year. This was down 0.8% from the previous year, but broadcast sales also declined by 0.9%, from 2.6424 trillion won to 2.6181 trillion won over the same period. As a result, the ratio of transmission fees to broadcast sales actually rose from 73.3% to 73.4%. Transmission fees increased by 59% over nine years—from 1.2086 trillion won in 2016 to 1.9212 trillion won last year. The ratio of transmission fees to broadcast sales climbed 13.5 percentage points, from 59.9% in 2021 to 73.4% last year. Although the total fee amount has declined slightly in recent years, the more rapid decrease in broadcast sales has heightened the burden felt by home shopping companies.

The Broadcasting Media Communications Commission announced “Measures to Promote Coexistence and Revitalization of Home Shopping” in May and decided to revise the guidelines again. The plan is to verify negotiation data—such as sales and subscriber numbers—in advance and expand the role of the fee validation council so that it can establish and propose adjustment plans for transmission fees.

However, progress on concrete standards has been slow. The public-private consultative body that the government convened to vitalize the pay-TV industry has so far held a few meetings but has reportedly dealt with content usage fee issues between platforms and program providers (PPs) as a priority. A specific revision of the home shopping transmission fee guidelines has not yet been formally discussed.

Industry insiders believe that it will be difficult to revise the guidelines within this year, considering the National Assembly audit schedule and other factors. A representative of the home shopping industry stated, “With revision discussions delayed, negotiations this year are also being conducted with no clear standards,” and added, “As broadcast sales decline, it will be impossible to maintain profitability through cost reduction alone if transmission fees are not lowered.”

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