IPTV 3 Companies' PP Program Fees Increased by 13.8% but Conflicts Persist

The total program usage fees paid by the three Internet TV (IPTV) providers to Program Providers (PP) last year amounted to 549.582 billion KRW, representing a 13.8% increase compared to the previous year.

On the 9th, KT, SK Broadband, and LG Uplus disclosed their payment details. KT paid 239.919 billion KRW, SK Broadband paid 155.489 billion KRW, and LG Uplus paid 154.174 billion KRW in program usage fees to PPs. Program usage fees are divided into fees for real-time general channel programs and free Video On Demand (VOD) usage fees. Terrestrial, comprehensive programming channels, paid channels, and paid VOD are excluded.

[Image source=Pixabay]

원본보기 아이콘

Among them, KT showed the largest increase in payments compared to 2021, rising by 17.6%. In particular, free VOD usage fees increased by 30.3% to 97.493 billion KRW. Real-time general channel program usage fees rose by 10.2% to 142.426 billion KRW. Fees paid to small and individual PPs increased by 6.3% to 46.49 billion KRW.

SK Broadband paid 127.46 billion KRW for real-time general channel program usage fees, up 9.5%. Fees to small and individual PPs increased by 8.9% to 42.785 billion KRW. Free VOD usage fees rose by 3.4% to 28.083 billion KRW. Overall payments increased by 8.4%.

LG Uplus paid 117.33 billion KRW for real-time general channel program usage fees, a 13.4% increase from the previous year. Fees to small and individual PPs rose by 17.1% to 48.313 billion KRW, the highest amount paid to small and individual PPs among the three companies. Free VOD usage fees increased by 13.4% to 36.871 billion KRW during the same period.

The scale of program usage fees paid by the three IPTV providers has been increasing annually. They paid 400.776 billion KRW in 2020 and 483.043 billion KRW in 2021. Compared to the previous year, the payments increased by 13.3% in 2020, 20.5% in 2021, and 13.8% in 2022.

Although program usage fees are increasing every year, conflicts between IPTV providers and PPs persist. The PP industry voices that despite the increase, the absolute amount remains small, so they still do not receive fair compensation. A PP industry official stated, "Although IPTV providers continuously increase program usage fees, the increase is not significant given that the initial fees were extremely low." On the other hand, the IPTV industry maintains that they have made their best efforts to pay fair compensation despite challenging market conditions. An IPTV industry representative said, "The payment amounts continue to increase compared to the previous year. We strive to pay fees based on fair indicators."

In response to the recurring conflicts, the Ministry of Science and ICT is developing guidelines for reasonable program usage fee calculation. Additionally, to break the practice of supplying content first and signing contracts later, they plan to introduce the principle of 'contract first, supply later.' However, progress has been slow due to disagreements among operators.

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.