KLRI : KOREA LEGISLATION RESEARCH INSTITUTE

Ⅰ. Backgrounds and Purposes

▶ Recently, OTT services have continued to grow steadily as a new content demand source, encouraging code cutting

○With the expansion of the content distribution environment to the mobile environment, various contents can be provided based on the platform without restrictions, and the OTT service market continues to expand based on the advantages of content distribution and use, such as recommending customized contents to individuals' tastes through analysis of viewing history data

▶ It is noteworthy that securing original killer content is emerging as a major strategy in the competition structure for global OTT companies to secure subscribers

▶ However, on the other hand, content production between OTT operators is underwayAs the dispute intensifies, the issue of unfair distribution of economic profits between the creator group and OTT platform operators is emerging due to copyright transfer contracts (so-called 'exclusive content contracts')

▶ This study examines the main contents of the three types of amendments to compensation claims and transfer estimates recently  proposed by the National Assembly and examines the appropriateness of the introduction of each right as a countermeasure for fair distribution and copyright transfer contracts

   

Ⅱ. Major Content 

▶ In this study, the complex legal surrounding music and video content produced and distributed in OTT services, focusing on the following four issues We looked at the relationship and the resulting revenue imbalance from a copyright law perspective

▶ First, some argue that the controversy triggered by the success of Netflix's Squid Game should correct the unfair distribution of profits between OTT operators and content creators

○ In other words, there is a voice that some of the profits should be distributed to the creator group to OTT operators who adopt a business method that exclusively owns all copyrights to content, and related legislation leads to a proposal in the National Assembly

○ In order to discuss this, OTT operators, that is, content providers, are recognizing the level at which the imbalance in revenue distribution is actually occurring and the legitimate compensation for the imbalanceSufficient consideration should also be given to the possibility of causing legal instability of the business operator

▶ In addition, there is a problem in securing copyright for original content produced and serviced by OTT operators 

○ In order for investors and producers to fully use video works produced by investors and producers, the Copyright Act introduced a special provision on video works, presuming that both copyright and adjacent rights of video works are transferred to video works producers

○ As a result, video production producers have acquired the right to fully use video works, but in certain fields, especially in the case of music, if the composer or lyricist is a member of a copyright intensive management organization There is a dispute over whether the copyright trust contract takes precedence or whether the producer who signed the video work production contract with this member takes precedence, and a legislative bill was proposed to resolve it from the perspective of the creator group

○ Problems of the legislative bill are being discussed in relation to OTT, which requires all rights to video works to be transferred

▶ Next, the discussion on the introduction of the right to claim compensation for transmission becomes a problem

○ The right to claim compensation for transmission is a very convenient concept for users of works by changing the exclusive right of copyright into a creditor right

○ From the perspective of OTT operators who transmit most of the video content, the introduction of the right to claim compensation for transmission is a significant cost for content production and service Can reduce savings and reduce legal risk

○ However, OTT is a very unusual type of right to protect the trust of transaction contracts in that it has already acquired exclusive rights to the content through agreement between the parties by setting an appropriate price based on the possibility of failure of the content

○ Therefore, we have to be careful in introducing it, and there are limitations that it is difficult to introduce because there is a discussion that the concept of the right to claim transmission compensation itself violates the international treaty related to copyrights currently joined by Korea and FTA regulations signed with Korea

▶ Finally, the usage rate determined by the Ministry of Culture, Sports and Tourism for the smooth collection of copyright usage fees The issue of adequacy is also an important issue in terms of the balance of revenue distribution 

○ In particular, the issue of determining copyright usage rates is that the government has a responsibility as a public entity to promote legitimate transactions of private contracts, so it is necessary to reach smooth market consensus by performing appropriate regulation, control, and coordination

○ However, there is a fierce dispute in Korea over the music copyright usage rate borne by OTT operators that provide various types of services

○ Accordingly, it is reasonable under domestic law by reviewing the case    of Germany, where the state is actively coordinating to solve unfair and asymmetrical problems arising in the private contract areaThey want to insist on the need for a smooth market adjustment function through artificial regulation

▶ Chapter 2 of this study introduced changes in the content production and distribution environment and the importance of copyright securing strategies. Chapter 3 introduced various issues such as copyright trust contracts with central management organizations

   

Ⅲ. Expected Effects

▶ If the introduction of various forms of compensation claims discussed in this article is difficult to secure legal validity and it is not easy to balance the actual interests of interested parties, it is also important to consider how to play an active role in distributing balanced transactions

▶ This will contribute to fair contracting practices in the OTT service market by encouraging the market to voluntarily distribute appropriate economic returns, although it is difficult to predict whether the brokerage and mediation functions will work effectively for each case