Research Report
A Legislative Study for Vitalization of Culture Industry
Ⅰ. Background and purpose
▶ As the industries are digitalizing and their genres are converging expeditiously due to the corona pandemic, Korea's cultural industry has been remarkably growing.
○ The Korean Wave The increase in global popularity of Korean pop culture starting from China, Japan and countries in East Asia since late 1990s. Standard Korean Dictionary, National Institute of Korean Language
, which began drawing global attention around 2000, has shown remarkable results with <Gangnam Style> in the 2010s, and <Parasite>, BTS, and <Squid Game> in the 2020s.
○ These results are leading to the industrial achievement.
- Domestic sales from the Korea’s cultural content industry has annually increased 5% between 2016 and 2000.
- In 2020, the exports of the cultural content industry totaled USD 11.924.28 million, an increase of 16.3% from the previous year in contrast to the difficulties in the domestic market due to the corona pandemic
- The export markets focused on China (30%) and Japan (20%) have been expanded to many other countries including those in Southeast Asia (21%) and North America (12%), showing that the markets are being diversified.
○ The transition to a 'non-face-to-face' society caused by the corona pandemic is accelerating further as it interlocks with the technological innovation that has been going on so that 'convergence' and 'digitalization' are emerging as the popular topics in various fields.
- Recently, online release of movies has become commonplace and soap opera and entertainment shows can be produced, distributed, and enjoyed through one platform, making the border among movies, videos, and broadcast blurred.
- In the field of stage performance, a typical face-to-face cultural experience, non-face-to-face or digital stage performances combined with technologies such as holograms and metaverses are getting more and more popular not only in the popular music industry but also in the performing arts field.
▶ In order to promote the Korea’s cultural industry, which is showing remarkable growth amid the new environments and challenges, convergence and digitization of the cultural industry, the government of Korea announced the 'growth strategy for the culture content industry linked to digital'.
○ The main focus of the growth strategy for the culture content industry linked to digital are as follows: ① digital transformation to respond to non-face-to-face environments; ② opening the new market of the next-generation immersive and intelligent content; and
③ strengthening competitiveness in the global market.
The government also announced policies to expand the basis for online content production, distribution, and use in a non-face-to-face environment such as over-the-top media service, to foster next-generation high value-added content based on the combination of technologies such as content and data, artificial intelligence, and virtual/augmented reality, and to support for creating values form the ecosystem of the Korea’s cultural industry by securing intellectual property (IP) of cultural content
- It is an express will of the government to maintain the global popularity of the Korea’s cultural industry by fully applying the digitalization, of which the development has been accelerated, achieved by technological advances to the cultural industry.
○ In 2022, the government announced policies for programs to promote the cultural industry to provide support for the revitalization of traditional culture using the metaverse and the production of genre-based content such as games and animations for the metaverse by investing about 20 billion won.
▶ The policy for digitization of the cultural industry is not just a phenomenon unique to Korea. There has been a broad consensus on the need for policy to ensure future growth of the cultural industry of each region or country because the cultural industry will grow based on digitalization between international organizations such as the OECD and UNESCO and countries including the UK and France since 2010s despite the different characteristics of culture in different countries. And they have established and implemented policies to achieve the growth.
▶ As mentioned above, it is deemed reasonable and persuasive to establish and implement a series of policies for promotion of the cultural industry by responding to the challenges of the times and the industrial needs, and by comparing cases of foreign countries, independent of the subsequent evaluation of the policy implementation.
Ⅱ. Summary
(1) How to improve the Framework Act on the Promotion of Cultural Industry
1) The need to improve the legal system
▶ 'Convergence' and 'digitalization' which emerged in the cultural industry raises new questions regarding the legal system.
○ For example, the film and broadcasting industries have been regulated under different policy governance, and have been grown with different financial resources and deliberation systems in accordance with different laws. It is now deemed less reasonable to separate them for both regulations and support as the two have been converged.
○ The introduction of the metaverse will accelerate the digitalization of analog products and an attempt to change things in reality into digital content will be made. In this background, cultural products will be created and distributed in a digital format and the need to protect intellectual property rights will increase for creating, producing and distributing digital content.
▶ Although Korea's cultural industry market has grown significantly in quantity and quality over the past 20 years, the related legal system has not been efficiently improved. The legal system related to the cultural industry and content industry is divided so that many have said there are difficulties in development of the cultural content industry.
○ The cause of this goes back to May, 1945 when Bureau of Cultural Industry was established in the Ministry of Culture and Sports to come up with policies for cultures. Since then, laws related to the cultural industry have been enacted first in the field drawing attention in terms of the economy and politics.
- In 2009 when policies related to the content and the relevant laws were transferred to the Bureau due to reorganization of the Ministry, the amendment of the existing Online Digital Content Industry Development Act to the Content Industry Promotion Act has not fully complied with the legislative purposes and legal function of the Framework Act on the Promotion of Cultural Industries, which leads to various legal problems.
- Recently, a legislative proposal to include a new concept of metaverse content in the Framework Act on the Promotion of the Cultural Industry is being submitted. It seems appropriate the metaverse content is governed by the Contents Industry Promotion Act, but both the Framework Act on the Promotion of Cultural Industry and the Content Industry Promotion Act provide the same provisions related to cultural content. Therefore, it is quite plausible to include provisions related to the metaverse content in the Framework Act on the Promotion of Cultural Industry, the basic law, and this will give reasonable grounds for implementing policies.
▶ In terms of the legal system, the cultural industry promotion legislation has a very complex and overlapping aspect so that the policy makers for cultural industry promotion does not effectively show a consistent political will to those applicable to the relevant laws.
○ Digital content, which is the core of the cultural industry promotion legislation, is governed by different Acts: the Game Industry Promotion Act, the Craft Industry Promotion Act, the Popular Culture and Arts Industry Development Act, the Promotion of Cartoons Act, The Framework Act on the Video Industry Promotion, the Act on the Promotion of Animation Industry, the Promotion of the Motion Pictures and Video Products Act, the Music Industry Promotion Act, the Print Culture Industry Promotion Act, the Publishing Industry Promotion Act and others. Those Acts are based on the Contents Industry Promotion Act of which the basic law is the Framework Act on the Promotion of Cultural Industries.
- In order to fix inefficiencies in the legal system with different Acts overlapped each other, it is necessary to clearly understand the meaning of the basic law type legislation, and to improvement the cultural industry promotion legislation focusing on the contribution to the elaborate legal system.
○ Another problem with the cultural industry promotion legislation, especially regarding digital content, is that each competent Ministry enacts similar laws and implements policies sporadically and disconnectedly.
- This disconnected approach and response sometimes creates a competitive atmosphere or cause conflicts between Ministries. For example, the over-the-top (OTT) industry is governed by the different competent authorities such as the Ministry of Science and ICT, the Ministry of Culture, Sports and Tourism, and the Korea Communications Commission. In June 2021, when the Ministry of Culture, Sports and Tourism was amending the Promotion of the Motion Pictures and Video Products Act to deregulate OTT services, the competent authorities failed to reach an agreement and each said that they would enact or amend separate laws.
2) Establishment of (draft) legal system maintenance
▶ In order to improve the legal system to achieve the purpose of promoting the cultural industry, it is necessary to seek an alternative that can overcome the overlapping regulations and systematic confusion between the Framework Act on the Promotion of Cultural Industries and the Act on the Content Industry Promotion Act. It needs to reorganize the legal system in such a way that the Framework Act on the Promotion of Cultural Industries can function as a basic law which is the highest in the hierarchy regarding cultural industry promotion legislation.
○ The first law that can be looked into from the perspective of improving the system of the cultural industry promotion legislation is the Framework Act on Culture, which presents the basic policy principles for the entire cultural industry of Korea and which covers the promotion of culture and art and development of cultural industry and the comprehensive cultural area including conservation and use of cultural heritage and tradition.
- Therefore, although it is true that the Framework Act on Culture provides the provisions regarding the cultural industry, it seems difficult to achieve the purpose of coordination of the cultural industry promotion legislation by improving that Act because the cultural industry itself is just one of the factors to be considered for the overall cultural policies.
○ The laws directly related to improving the cultural industry promotion legislation are the Framework Act on the Promotion of Cultural Industries and the Content Industry Promotion Act. Both are different in title but similar in type, a basic law.
- Therefore, to improve the system of cultural industry promotion legislation by fulfilling the purpose of a basic law, which presents will and direction of policy and legislation, it is necessary to seek how to improve the system based on these two Acts.
- The Framework Act on the Promotion of Cultural Industries and the Content Industry Promotion Act seem to have differences in the scope of their regulations, but from the perspective legal development, the Framework Act on the Promotion of Cultural Industries has included a significant part regarding the content industry, and the Content Industry Promotion Act has been being governed by the regulations of the competent authorities of cultural industry promotion legislation due to the change in the competence between the Ministries.
- As a result, it can be said that the two Acts seem not different in substance, but in their historical changes.
▶ Judging from all this, at this stage, it seems more appropriate to amend the Framework Act on the Promotion of Cultural Industries and the Content Industry Promotion Act individually, maintaining their functional systems, rather than unifying them.
○ Although the Framework Act on the Promotion of Cultural Industries and the Content Industry Promotion Act regulate similar matters, but the former one is designed to promote the cultural industry in general, while the latter one focuses on the promotion of the content industry.
○ The two Acts both have the characteristics as a basic law, they should be seen as a general law and a special law. So it would be more desirable that the Framework Act on the Promotion of Cultural Industries provide for general matters necessary for promoting the cultural industry in a comprehensive manner while the Content Industry Promotion Act provide for specific matters focusing on the content industry.
- If the functional systems of the two Acts are coordinated through reorganization of their provisions from a mid- to long-term perspective, unifying them can be considered in the future.
- However, if the provisions of the two laws governing different matters are physically integrated, such integration is highly likely to fail to reflect the characteristics of the content industry mediated by digital technology. For this reason, it would be better, in terms of stability, to operate these two Acts separately keeping their functions intact and to pursue their chemical bonding step by step after they are systematically established.
▶ Accordingly, this study suggests a pack of improvements for the Framework Act on the Promotion of Cultural Industries and the Content Industry Promotion Act regarding definitions, basic concepts, relationship to other laws, general governance involving all relevant Ministries for the coordination of legal systems, encouraging the use of public information and the convergence of the cultural industry, and basic measures to raise and secure funds. It also proposes the revision of overlapping provisions regarding production support, training professionals, promoting technology development, and other relevant matters.
○ In the case of definitions, it is desirable to remove content-related terms in the Framework Act on the Promotion of Cultural Industries while keeping the definition provisions of the Content Industry Promotion Act as they are.
○ In the case of basic concepts, only the Content Industry Promotion Act includes the relevant provisions, but rather it is the Framework Act on the Promotion of Cultural Industries that needs such provisions to adequately perform its functions as a basic law. Therefore, it seems desirable to transfer the basic concept provisions of the Content Industry Promotion Act to the Framework Act on the Promotion of Cultural Industries.
○ The provisions regarding the relationship to other laws in the Framework Act on the Promotion of Cultural Industries describe the typical general law-special law relationship, which is not a legislative form that shows its status as a basic law. For this reason, it is necessary to add new provisions to ensure that laws related to the cultural industry are enacted or amended in compliance with the provisions and purposes of the Framework Act on the Promotion of Cultural Industries.
(2) New challenges facing the cultural industry, such as convergence and digitization, and legal responses thereto
1) Over-The-Top (OTT) services
▶ With Netflix launching its services in Korea in 2016, Over-The-Top (OTT) services started in earnest, allowing people to enjoy videos with various devices anytime, anywhere. The growth of OTT has brought various changes to the cultural industry ecosystem.
▶ In response to such environmental changes, it is necessary to re-define major concepts related to the video industry and to repair relevant systems.
○ As OTT is reshaping the cultural industry ecosystem in terms of the production, distribution, and consumption of videos, the video industry should be defined and promoted in a comprehensive manner, desirably in the Framework Act on the Video Industry Promotion.
- In September 2020, a bill was proposed to overhaul the Framework Act on the Video Industry Promotion, in which a new concept ‘video media content industry’ is defined to encompass both ‘broadcast video content’ based on broadcasting networks and ‘online video content’ based on communications networks, and necessary provisions are drafted to promote the relevant industry.
- As the Telecommunications Business Act was partially amended in June 2022, OTT’s legal status has been defined, and that means the same subject would not be regulated by other laws. Yet there remains unresolved matters. The definition of OTT service provider needs to be clarified, and it would be better to revise the provisions regarding the promotion of the industry and regulatory systems.
○ It is also necessary to amend the Promotion of the Motion Pictures and Video Products Act, which includes key systems related to film and video such as the Korean Film Council, the Korea Media Rating Board, Korean Film Archive, the Film Development Fund, and ratings.
- As movies and videos are mainly consumed online with the recent spread of OTT services, there arises a need to modify the relevant concepts and systems provided in the Act. First of all, film and video needs to be redefined. According to the definitions in Article 2 of the Act, they are distinguished in terms of where to play or how to play. But given that an increasing number of people are consuming movies using various primary channels, including OTT platforms, other than the theater, regulating them separately is no longer necessary nor appropriate.
- The current definition of video is based on the physical elements, such as video tape and offline space, and thus is losing relevance to the industry. In addition, considering the recent movie consumption pattern, it is also practicable to newly define a video viewing room and a small-sized video theater as a video viewing facility along with a general theater. The distinction between film and video is undermining the effectiveness and institutional legitimacy of the Act in general.
- Such distinction has a significant impact on the preliminary review system for ratings. As the Korea Media Rating Board separates movies and videos in deciding their ratings, a mixed concept of movies and videos are causing considerable inefficiency. Separate rating system needs to be introduced for videos distributed online.
2) Cultural content metaverse
▶ To help achieve a goal to make Korea a global media leader, as part of 120 national tasks of the new administration announced in July 2022, the Korea Communications Commission and the Ministry of Science and IST have presented the metaverse as a representative policy to develop immersive media technologies and to foster upstream and downstream industries such as devices and equipment. The Ministry of Employment and Labor and the Ministry of Culture, Sports and Tourism also announced metaverse-related projects. Considering all this, no one can deny the value and importance of the metaverse.
▶ As different Ministries are proposing metaverse-related policies, the process of legislation is not smooth. The ostensible reason for the delay is that there is a disagreement among competent Ministries over policy initiatives. But that does not seem to be real problem. Ministries and the National Assembly are preparing new laws regarding the metaverse, rather than amending existing laws. And comparing the three bills pending in the National Assembly, the overall composition and details are similar, except competent Ministries and implementation plans. Moreover, the bills contain provisions overlapped with those in existing relevant laws, and none of them provides specific measures reflecting the unique characteristics of the metaverse.
○ Metaverse legislation should be prepared in a way that can provide proper definitions and characteristics and establish a support system that can increase its economic and cultural value. There are two options to improve the legislation. One is to enact a new law tailored to the unique characteristics of the metaverse; and the other is to amend existing relevant laws.
○ The government and Ministries seem to choose the first option. However, given that the proposed laws have similar provisions and fail to properly reflect the characteristics of the metaverse, adding necessary provisions in existing laws would be more practicable and better in terms of the legal system.
- It is considerable to amend the Framework Act on the Promotion of Cultural Industries or the Content Industry Promotion Act, among other laws related to the cultural industry.
▶ The metaverse industry is an area of industrial convergence governed by the Industrial Convergence Promotion Act, and therefore, a comprehensive negative regulation seems more appropriate for the industry.
○ The legal status of the metaverse should be prescribed by amending existing laws, and then legal and institutional alternatives should be prepared in advance to ensure that other regulations for similar subjects, such as games, broadcasting, and information and communications, are not applicable to the metaverse.
○ Apart from introducing negative regulation, user protection measures need to be strengthened to build a sound user culture.
- Considering most of metaverse users are youth, it is required to establish a monitoring system for content produced and distributed on metaverse platforms and to prepare response measures in case of sex crimes and the like.
- One option is to apply mutatis mutandis the provisions regarding user protection policies in Article 25 of the Content Industry Promotion Act and the provisions regarding the dispute mediation committee in Article 29 of that Act or to revise such provisions to be more suitable for the metaverse content user environment. It is also considerable to amend and extend the Framework Act on Consumers and the Youth Protection Act to strengthen user protection.
3) Laying foundation for intellectual property to promote the cultural industry
▶ As the cultural industry is developing various content and doing mass distribution through the internet, online platforms, playing a crucial role in the industry, are evolving into the metaverse with the advancement in artificial intelligence and computing technologies.
○ The introduction of the metaverse will accelerate the digitization of analogue products, transforming everything in reality into digital content. In this situation, cultural products will be developed and distributed as digital content, and accordingly, the need for intellectual property protection will increase in the creation, production, and distribution of content.
▶ In the past, cultural products were consumed mainly offline, but today online consumption accounts for a considerable proportion compared to offline one. The problem is that digital content is an easy target of illegal copying, and such act is likely to lead to mass downloading and distribution in a short period of time. Sometimes illegal copying could erase the entire economic value of content.
○ With regard to digital content distributed in the metaverse, not just its creation and production but also its consumption is important. To achieve an effective and fair development of the industry, content should be distributed and consumed in a legally proper way.
- Intellectual property rights such as copyright are the very foundation to establishing the cultural industry and could protect the industry from negative externalities. For this reason, intellectual property rights are inseparable in an effort to develop the cultural industry.