LG HelloVision and CJ ENM have clashed head-on over how to calculate content fees. They were "former family" who once shared the same table in the days of "CJ HelloVision," but now they are confronting each other, even raising the possibility of a broadcast blackout. Industry watchers point to the vacuum created as pay-TV policy duties moved from the Ministry of Science and ICT to the Korea Media and Communications Commission (KMCC) as the backdrop that intensified the conflict.
According to the broadcasting industry on the 4th, the Korea Media and Communications Commission (KMCC) called in working-level officials from LG HelloVision and CJ ENM on the 1st to hear both sides on the recent flare-up over content fees. The dispute escalated when LG HelloVision put the Korea Cable TV Assosiation's "calculation standards for fair distribution of content fees" on the negotiating table. The standards aim to ease the expense burden by reflecting declines in system operator (SO) broadcast revenue in the content fee calculation. Applying these standards, LG HelloVision paid a reduced program fee to CJ ENM in September–October.
LG HelloVision said that after COVID-19, as over-the-top (OTT) services spread, the pay-TV business deteriorated, reducing subscribers and leading to a drop in broadcast revenue. In fact, LG HelloVision's subscribers totaled 3.47 million last year, down 12.3% from 3.96 million in 2019. Ratings for channels provided by CJ ENM are also falling in tandem. According to Nielsen Korea, compared with 2019, the decline rates in 2024 by channel were Tooniverse 79.2%, Mnet 66.2%, OCN 63.9%, and tvN Drama 23.7%.
CJ ENM, for its part, argues that LG HelloVision unilaterally breached existing contract terms. According to the industry, CJ ENM recently sent an official letter to LG HelloVision saying, "If you do not withdraw the reductions and normalize the fees, we will suspend transmission of 12 channels including tvN starting on the 22nd." It was effectively a warning of contract termination. With another cable TV operator, D'Live, also known to have sent a letter to CJ ENM saying it would apply the association's standards and reduce fees, the dispute is spreading beyond individual operators to the SO industry as a whole.
SOs say, "We cannot pay fees the same way when revenue is shrinking," while program providers (PPs) such as CJ ENM counter that "unilateral reductions are a clear contract breach." Analysts say a fundamental conflict of interest in the pay-TV structure has surfaced.
The problem is that as the conflict erupted, the government's control tower was effectively "absent." Although pay-TV policy duties were transferred from the Ministry of Science and ICT to the newly established Korea Media and Communications Commission (KMCC), the body remained a "zero-member commission" for over 50 days after launch. The government body that should step in to mediate had not even been formed. Although a Chairperson nominee was recently named and one standing Commissioner appointed, the KMCC is not yet fully constituted, leaving it unable to take up dispute mediation. As a result, there is growing frustration in the industry that "when the government needed to step in, there was effectively no one there."
Unlike the Ministry of Science and ICT, where the Minister made decisions alone, the KMCC operates by consensus, inevitably slowing decision-making. Concerns raised from the outset about a lack of "speed" have materialized. A broadcasting industry official said, "Even if the authorities try to impose sanctions in the form of an administrative disposition to prevent a blackout, a decision is impossible unless all seven Commissioners are seated," adding, "The structure requiring at least four for a decision also makes a swift response difficult."
Viewers are likely to bear the brunt. If the two sides ultimately fail to find common ground, a "blackout" in which major channels such as tvN go off the air in some regions could become reality. With the pay-TV market already shaken by subscriber losses and weak advertising, concerns are growing that adding a dispute over viewing rights could accelerate an industrywide "crisis of attrition."
Experts see this situation as a signal for restructuring the pay-TV ecosystem. An Jung-sang, adjunct professor at Chung-Ang University's Graduate School of Communication, said, "This kind of turmoil was foreseen from the moment pay-TV duties were transferred to the KMCC. It is time to establish new rules on the value of content and usage expense between SOs and PPs," adding, "The government should swiftly complete the KMCC's formation and clearly set content fee calculation standards and dispute resolution procedures to reduce market uncertainty."