[Telecommunication company – Second trial verdict on sound bass dispute] IPTV usage fee is higher than cable Result of considering VOD characteristics 90% of the copyright ratio applied If you settle for 6 years, it will be in the tens of billions Inevitably affected by OTT-related lawsuits [Seoul Economy] After filing a lawsuit against a copyright organization stating that the music fees paid by domestic telecommunication companies for Internet TV (IPTV) business were high, they were ordered to pay billions of won. Since the judgment was made in 2015, it is expected that additionally recognized copyright fees will reach tens of billions of won if the expenses for six years are settled by 2021. In addition, the logic claimed by some telecommunication companies in this lawsuit is collapsing, and it is expected to affect the online video service (OTT)-related lawsuit that is currently ongoing separately from IPTV. ◇Telecommunication companies have to pay tens of billions of music copyright fees = According to the court and the telecommunication industry on the 16th, the Seoul High Court recently decided that KT (030200), SK Broadband (SKB), and LG U+ (032640) (LGU+) had a lawsuit against the Korea Music Copyright Association. In the debt non-existence lawsuit filed by the three companies, the three companies decided to pay a total of 7.779 billion won (KT 3.5 billion, SKB 2.4 billion, LGU+ 1.8 billion won). Eumjeohyup is a copyright trust management company that makes use of copyrighted works on behalf of copyright holders and distributes royalties. The case will be appealed by telecommunication companies early this month, and the Supreme Court will decide. A representative of the telecommunication company said, “As this is an ongoing matter, we do not have a special position.” An official of Eumjeohyup said in this judgment, “We are closely examining the advantages and disadvantages.” The conflict between the telecommunication company and the Eumjeohyup was raised when no agreement could be reached on the contract for the use of copyrighted works in 2015. In the middle, the Korea Copyright Commission arbitrated, but the discussion broke down as the Music Basketball Association rejected the mediation proposal. In response, the telecommunication companies filed a lawsuit to confirm that they were not obligated to pay music fees to them, saying, “The consultation was canceled because the Music Basketball Association did not faithfully fulfill its obligations.” However, the court judged, “It is difficult to see that only the Music Basketball Association is unilaterally responsible for the breakdown of the agreement.” ◇ “Cable and IPTV are different and must reflect market changes” = Through this ruling, the court is eye-catching in that it also made a judgment on the ‘appropriate music usage fee’ that telecommunication companies should pay for low-pitched music. A key issue related to the calculation of royalties was how to determine the royalties and copyright management ratios. The royalties for copyrighted works are calculated in proportion to the △IPTV sales △the royalty rate set according to the characteristics of the media △the market share of the copyright organization (copyright management ratio). % should be lowered. As a result, the court accepted the claims of the news agency and the copyright organization one by one on two key issues, and did not take sides. Telecommunication companies demanded that the IPTV usage rate be set equal to 0.5% of cable TV operators (SO). However, the court ruled that there was a structural difference in that video-on-demand (VOD) services were viewed much more on IPTV than on cable TV. The court said, “The fee rate of 1.2% is a result of considering these VOD characteristics,” and said, “There is no particular need for telecommunication companies to apply the same regulations as SO.” The news agencies argument that the copyright management ratio should be adjusted to the reality was accepted. In the past, Eumjeohyup was the exclusive trust management company and was in charge of royalties for 97% of domestic music works. However, as the trust management industry competition system was introduced in earnest from 2014, a new organization called the Music Writers Association appeared, and the market share of Music Basketball Association decreased. The court said, “With the newly launched Hamjeohyup, some members and managed works have been transferred to Hamjeohyup. ” he said. ◇ ‘Double-collection’ logic collapses and OTT lawsuits are inevitable = IPTV music copyright fees seem to be finding a compromise with the second trial judgment, but it is analyzed that the telecommunications company has entered the OTT business afterward, and the conflict with music bass has entered a new phase. Currently, telecommunication companies are arguing with the Ministry of Culture, Sports and Tourism regarding OTT in court. Similarly, when the OTT side and the Music Basketball Association failed to narrow the difference of opinion on the usage fee, the Ministry of Culture, Sports and Tourism decided to set the rate at 1.5%. The key to the OTT case is to examine the appropriateness of the Ministry of Culture, Sports and Tourisms disposition, so it is somewhat different from the IPTV case, which looked at the aspect of royalties. However, there is also a forecast that some of the logic claimed by OTT, such as double taxation, will collapse in the IPTV case and will adversely affect telecommunication companies. OTT claims that “music copyright fees have already been paid during the production of movies and dramas. Telecommunication companies previously made similar claims in the IPTV lawsuit, citing the relationship with the channel operator (PP). I can’t take it,” he said.
