Government promises tax cuts, eased regulations for local online streaming services

Tech

Published: 18 Nov. 2022, 13:40

Government promises tax cuts, eased regulations for local online streaming services

Minister of Science and ICT Lee Jong-ho announces the government's plans to nurture the local streaming services in the global market in an economic ministers' meeting held Friday at the Seoul Government Complex in Jongno District, central Seoul. [NEWS1]

The government on Friday promised tax cuts and eased regulations for local online streaming services in an aim to help domestic platforms expand globally and grow Korea’s content exports with its very own Netflix.

The announcement came from a ministers’ economic meeting held Friday morning, where Science Minister Lee Jong-ho presented the ministry’s “Digital media content industry innovation and global strategy” containing the government’s plans for the domestic streaming market.

A bill was put forward by the government to revise the Restrictions of Special Taxation Act last September, to allow streaming services to get tax cuts on production costs currently only applied to television and film production companies. If passed, the bill will allow streaming services to benefit from 3 to 10 percent in tax cuts for production costs.

A new government-led fund will be established to provide financial support, along with an increase in volume of two existing funds — a 629.8-billion-won ($471 million) fund for immersive and virtual content and a 26-billion-won fund for digital media content.

Regulations will be loosened for venture capitalists, allowing them to invest in content companies that are 40-percent or less owned by a conglomerate, up 10 percentage points from the current 30 percent.

The government will also hold a Global OTT Awards to promote high-quality works from online streaming, otherwise known as over-the-top (OTT), services. The awards will take place as a part of existing popular events, such as the Busan International Film Festival (BIFF).

Local streaming services and content will be promoted at high-level meetings. The metaverse will be promoted as a next-generation media platform and production companies will be encouraged to distribute their content through metaverse services.

“The media content industry is fast-changing around OTT, metaverse and creators,” Minister Lee said. “It is the core industry to determine the future of our country’s competitiveness and also let young people realize their endless imagination. It is of utmost importance that digital media platforms leap beyond the domestic market and go global.”

The government also announced on Friday that it will set up a five-year strategy to nurture the service industry, including tax cuts, eased regulations and financial support. Details will be announced March next year.

BY YOON SO-YEON [yoon.soyeon@joongang.co.kr]