The online video service (OTT) and internet (IP) TV platforms for watching content have increased. It's natural for content prices to decrease. However, cable TV operators are spending 90% of their revenue on content usage fees. This is not a normal structure.
Han Jeong-hoon, CEO of K-Entertech Hub, spoke on the 24th as a presenter at the Media Study hosted by the Korea Cable TV Broadcasting Association at the Chungjeong Tower building in Seodaemun, Seoul. He noted that the standards for calculating the compensation for content need to change, asserting that as the era of 'multi-homing' opens, where content can be viewed without limitations of time and place, cable TV operators must break free from past regulations to establish a reasonable market competition environment.
CEO Han stated, "Domestic cable TV operators must receive government approval and have the obligation to operate local channels," adding, "In a situation where multi-homing is becoming common worldwide, there is a need for policy protection for cable TV operators."
CEO Han emphasized that multi-homing viewers are still using cable TV while utilizing OTT and IPTV platforms. He said, "The public nature and regional specificity of content that only cable TV can provide, such as real-time news, disaster broadcasts, and local information closely tied to daily life, continue to function strongly," analyzing that even in an environment where various platforms coexist, cable TV is establishing itself as an important part of 'complementary consumption' that satisfies viewers' content demands rather than simply competing media.
The United States, Europe, and Taiwan are establishing policies to balance viewer protection and market competition in line with the multi-homing era. CEO Han noted, "The European Union (EU) removed barriers to switching between platforms through the Digital Markets Act (DMA)," and that both the U.S. and the U.K. encourage fair competition among platforms while recommending 'à la carte pricing' that allows viewers to choose only the channels they want and prohibiting exclusive content contracts.
On the other hand, CEO Han believes that the domestic cable TV industry is not receiving such policy protection. He analyzes that due to 'triple pressures' including content acquisition costs, re-transmission fee burdens, and declining revenue, their performance is plummeting.
CEO Han stated that the compensation system for content needs to be redesigned reasonably. He explained, "Korea still operates under a single-platform distribution environment, which fails to reflect the multi-homing situation," warning that there is a significant possibility it will lead to an increase in viewer fees.
CEO Han emphasized that the 'incremental pricing' principle adopted by major overseas countries is also necessary in Korea. He believes that if reasonable compensation is applied only to exclusive content consumption, while lower rates are applied to overlapping consumption, domestic cable TV operators could engage in rational competition with competing platforms such as OTT and IPTV.
He also argued that there is a need to introduce an artificial intelligence (AI) analysis system that reflects viewership rates, advertising revenue, and preferences in the calculation of content compensation. He stated, "By limiting the annual increase to a certain percentage above the consumer price index (CPI), or by establishing a system that enables quick mediation in the event of disputes, the blackout situation caused by negotiation failures can be prevented."