KBDF dismisses Watcha's claims that its royalty system is 'fair'

The Association of Korean Buyers & Distributors of Foreign Films (KBDF)

The Association of Korean Buyers & Distributors of Foreign Films (KBDF) has refuted claims by local streaming service Watcha that the current royalty system is “transparent” and “fair."

The association emphasized that it wasn’t criticizing the service itself but the unfairness of the way it is paid royalties to copyrighted films.

Regarding Watcha’s transparency, the KBDF pointed out that it is unable to check whether the information provided on the platform’s account settlement is credible.

“The data that the distributors receive from Watcha is [only] a proportion of how much the film is viewed out of the total number of hours the users spend on the platform,” KBDF said. “Even in Webhard, a local file-sharing service, the account settlement not only entails the profit the content is making in real time, but also the protective measures to ensure the copyrights, such as applying hash value and the digital rights management [DRM]. With Watcha, however, the data regarding the proportions aren't open, and if the numbers are wrong, there’s no other way for the content providers to check [to see if it’s true]."

The KBDF also refuted the streaming service’s claims that the data are helping local distributors collect additional profit from films no longer screening in cinemas.

“To say that the ‘old films’ do not hold any commercial merits would be too hasty of a conclusion,” the association said. “For instance, although it varies upon each contract, if the assumption is that the copyright holders receive 40 to 55 percent of the total profit made [from the content], in other platforms the holders receive around 1,000 won [$0.84] per transaction if the content costs 2,500 won. For Watcha, the average royalty we receive is around 100 won."

While the KBDF understands that the Over-The-Top model is one of the fastest-growing forms in how the public views video content, if the current method of royalty payment in local streaming platforms continues, the distributors’ profit will shrink, and this would ultimately hinder the provision of various kinds of content to the people, the organization said.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]