KOMCA and OTT video services clash over a sharp increase in royalty fees

By Emmanuel Legrand

South Korea's over-the-top video services Watcha, Tving and Wavve, through their joint organisation the Music Copyright Countermeasure Committee, have filed an administrative lawsuit against the Ministry of Culture, Sports and Tourism in an effort to reverse a December 2020 decision to increase the fees they pay for the use of music.

  Right society Korea Music Copyright Association (KOMCA) asked the Ministry of Culture last July for the right to increase music copyright fees paid by local streaming services from the original 0.625% rate to 2.5% of their revenues. KOMCA argued that since Netflix was paying a 2.5% fee, the same fee should apply to local services.

  Eventually the Ministry of Culture agreed to a plan that would see the fee rise from 0.625% to 1.5% in 2021, and incrementally increase the fee to bring it to 1.9995% by 2026. 

  "While the Ministry of Culture claims the fees are not high, it is monumental to us,” Noh Dong-hwan, Wavve policy corporation department manager, told the Korean Herald.

Lack of fairness

  The MCCC said it filed the suit because it felt that the Music Industry Development Committee that took part in the rate-setting decision making process was biased due to the fact that seven of its 10 members represented copyright holders and only three represented users of copyrighted material.

  “We filed a lawsuit because parts of Ministry of Culture, Sports and Tourism’s approval process could be illegal. They did not gather the industry’s opinion and violated equality. We didn’t file the lawsuit to win. If the Ministry announces a new policy, the lawsuit can be cancelled at any time,” said Hwang Kyoung-ill, head of MCCC, who also complained that the MCCC had not been able to engage with KOMCA despite attempts to arrange a meeting.

  KOMCA has not commented on the lawsuit.