[Alpha Biz= Paul Lee] Seoul, South Korea — Amid the ongoing downturn in the cable TV industry, a dispute over program usage fees has intensified between CJ ENM and LG HelloVision.
According to industry sources on December 2, CJ ENM recently sent an official notice to LG HelloVision stating that it would suspend the supply of two channels—including tvN— if the operator continues paying reduced content fees.
The warning was issued after LG HelloVision paid lowered content usage fees for two consecutive months, September and October, in line with the “Fair Distribution Guidelines for Content Fees” established by the Korea Cable TV Broadcasting Association. CJ ENM has indicated that a channel blackout is possible if LG HelloVision does not comply with its correction request.
The guidelines, introduced by the Cable TV Association in May, call for:
Adjusting the SO (system operator) content fee payout ratio—which has been significantly higher than the pay-TV industry average—to more reasonable levels,
Linking total content fee payments to SO revenue changes, and
Implementing changes gradually over three years to prevent sharp fluctuations in payment levels.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
