CJ ENM in clash with broadcasters over content fee
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.”