"I want to go to the back number..."
Every time I change channels while watching TV, home shopping is what I come across.
Home shopping channels are established in every other channel up to the 20th, which is the low-numbered channel that viewers prefer.
It is the best place for home shopping operators to catch the eyes of viewers who change channels. Recently, a home shopping TV official complained that he wanted to go to the 'back number' but could not.
'Transmission fee' accounts for 60% of home shopping sales
Home shopping TV operators, which are more advantageous with more exposure, have mentioned 'back number' because the burden of 'transmission fee' has increased.
The transmission fee is a rental fee paid to a pay-TV operator that broadcasts home shopping broadcasts.
It is a concept of paying a fee according to the channel number to IPTV, cable TV, and satellite broadcasting service providers such as KT, SK Broadband, and LG U+.
However, as IPTV has recently grown into the No. 1 market for pay-TV, it is said that the burden of transmission fees has increased in particular.
Twelve domestic home shopping companies spent 2.2 trillion won in transmission fees last year.
The burden increased from 1.3 trillion won in 2017 to nearly 1 trillion won in just four years.
However, the sales growth rate of home shopping operators was not so.
Sales growth was slow from 3.5 trillion won in 2017 to 3.8 trillion won last year.
In 2017, the proportion of transmission commissions to sales of home shopping operators was less than 40%, but last year, the proportion of transmission commissions was close to 60%.
60% of the money received from selling goods through home shopping TV went to pay-TV operators.
IPTV, in fact, 'suffering' with transmission fees
Home shopping operators explain that IPTV has created a strange structure in which 60% of sales go to rent.
IPTV's transmission fee has grown sharply every year.
The transmission fee, which was 490 billion won in 2017, exceeded 1.3 trillion won last year.
Over the past five years, the transmission fee has been increased at an average annual rate of 28.3%.
There is also a reason for the increase in IPTV transmission fees.
This is because IPTV has been continuously expanding its pay-TV market share.
The total number of pay-TV subscribers exceeded 35 million last year.
Among them, the number of IPTV subscribers is 19 million.
With a market share of 55%, it is approaching 20 million subscribers.
After reversing the number of cable TV subscribers in early 2018, the number of cable TV and satellite broadcast subscribers has been steadily decreasing, while the number of subscribers is increasing by 8% every year.
In other words, as the number of subscribers increases, the transmission fee received from home shopping operators also increases.
However, the logic weakens when comparing the home shopping transmission fee and the number of subscribers.
The transmission fee increased by 28% every year, while the number of subscribers only increased by 8%.
The point that IPTV operators are paying double for transmission fees can be confirmed by looking at the sales of IPTV operators.
In 2017, home shopping transmission fees accounted for 16.7% of IPTV operators' broadcast sales.
The proportion of sales, including license fees from IPTV subscribers, reached 70%.
On the other hand, the proportion of transmission commissions received through home shopping among broadcasting sales in 2021 increased to 28.6%.
Sales, including commissions from subscribers, fell to 58.6%.
Home shopping operators point out that IPTV operators' sales are growing because of home shopping transmission fees that are actually easier to earn than essential businesses.
Sales of IPTV operators grew from 2.9 trillion won in 2017 to 4.6 trillion won last year.
Home shopping transmission commission sales accounted for half of sales growth.
Enlarging an image
During the same period, IPTV operators' largest spending area, content usage fees, did not increase significantly.
Expenditure on program usage fees for terrestrial broadcasters, general broadcasters, and PP providers providing programs increased by 9% annually from 900 billion won in 2017 to 1.2 trillion won in 2021.
The growth rate is similar to that of the number of subscribers.
As of 2021, the total program transmission fee of 1.2 trillion won is less than the transmission fee of 1.3 trillion won from 12 home shopping companies.
The rent received from home shopping operators exceeded the fees paid to terrestrial broadcasters, general broadcasters, and PPs.
Calculation standard for 'transmission fee' without considering sales of home shopping operators
IPTV operators are of the view that they have increased the transmission fee through the calculation standards approved by the Ministry of Science, Technology and Information and Communication, which is a supervisory department.
It is the result of reflecting the rate of increase and decrease of pay TV subscribers, average inflation rate, and the adjustment coefficient for negotiations with home shopping operators in the transmission fee of the previous year.
However, home shopping operators point out that they are not following the guidelines presented by the government.
According to the Ministry of Science and ICT's 'Guidelines for Home Shopping Broadcast Channel Use Contract', it is necessary to consider the increase or decrease in sales of home shopping operators while prohibiting the coercion of unfavorable transmission costs.
However, this was excluded from consideration.
Who manages and supervises the telecommunication companies that have taken over 90% of pay TV?
When IPTV operators sharply raise transmission fees from home shopping operators due to the increase in the number of subscribers, the home shopping transmission fees of cable TV and satellite broadcasters with reduced subscriber numbers hardly decreased.
Only the burden of transmission fees on home shopping operators has increased, but the sales of pay-TV operators have increased.
It is the telecommunication companies that dominate the pay-TV market.
As of 2020, telecommunication companies dominate 90% of the pay-TV market, with KT affiliates with 2.4 trillion won, SK Broadband with 1.8 trillion won, and LG U+ affiliates with 1.7 trillion won.
Lee Jeong-moon, member of the National Assembly's Science and Technology Information and Communication Committee, said, "Excessive increases in home shopping transmission fees, etc. will cause cost increases for product manufacturing, distribution, and sales operators, etc. pointed out
In fact, in a situation where telecommunication companies dominate pay-TV, home shopping operators have no choice.
Even when home shopping operators complain that they want to go to the 'back number', it is impossible to leave a room from the 'front number' without the permission of the pay broadcasters.
The days of watching TV through an antenna are over.
Pay TV can never be freed from the universal right to watch TV.
There seems to be a need for government management and supervision to see if there is any unfairness in the contract using channel control, and whether the burden of transmission fees will eventually be passed on to viewers and consumers.