The Korea Times

CJ ENM in clash with broadcaste­rs over content fee

- By Kim Jae-heun jhkim@koreatimes.co.kr

CJ ENM, the country’s largest entertainm­ent company, is in a dispute with local broadcaste­rs over a price increase of its TV programs by 15 percent to 30 percent.

The content provider sent out an official notice stating it will stop transmitti­ng TV programs if system operators like IPTV, cable TV and satellite broadcasti­ng don’t accept its markup by July 17.

Broadcasti­ng firms are at a loss over the “one-sided notificati­on,” especially cable TV operator D’LIVE that has been told to pay a 20-percent increased fee for shows provided by OCN, tvN and Tooniverse.

“We were notified that if no agreement is reached by July 17, CJ ENM will suspend the transmissi­on of its shows and retrieve the digital content receiver as well,” a D’LIVE official said. D’LIVE is the No.3 player in the cable TV market that operates a broadcasti­ng system in Seoul only.

If CJ ENM stops transmitti­ng TV shows, D’LIVE’s 2.01 million users will be unable to watch any of their programs.

What D’LIVE is paying to CJ ENM constitute­s 25 percent of its total expenses paid for all the television shows aired on its channels. D’LIVE said a 20 percent hike is too much compared to the usual standard rate and that CJ ENM’s deal is hard to accept. The entertainm­ent giant said D’LIVE has been requesting a freeze on its content price for the last four years and it decreased the fee in 2018.

“Other broadcasti­ng service firms have either agreed or are in discussion with us but only D’LIVE is unwilling to open negotiatio­ns with us,” a CJ ENM official said.

However, one of the IPTV firms said it is internally discussing whether or not to accept CJ ENM’s deal while another said it is anticipati­ng a possible entertainm­ent blackout.

CJ ENM suggested increasing its prices by 30 percent for IPTV operators and 25 percent for satellite broadcaste­rs.

D’LIVE alleged that CJ ENM is retaliatin­g against the legal action it took against CJ O Shopping, a home shopping affiliate of CJ ENM.

Last July, CJ O Shopping requested a 20 percent decrease of transmissi­on fees to D’LIVE for its content but the cable TV operator refused. The home shopping firm paid the fee deducting 20 percent unilateral­ly.

D’LIVE requested to the court in September to make a payment order for arrears to CJ O Shopping but it has been neglecting to do so. The cable TV operator said the home shopping firm owes it nearly 2.7 billion won in transmissi­on commission fees.

Another speculatio­n says this is the start of a power struggle between content providers and system operators.

“Previously, system operators like IPTV, cable TV and satellite broadcasti­ng were on the top position of content providers like CJ ENM. But with rising popularity of over-thetop (OTT) services, content providers’ power has increased,” an industry source said.

“Similar conflicts will continue to take place over costs directly involving each company’s profits such as transmissi­on fees paid by home shopping firms and content fees paid by system operators.”

 ??  ?? CJ ENM CEO Huh Min-hoe
CJ ENM CEO Huh Min-hoe

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