South Korean entertainment company CJ ENM is suing LG Uplus, accusing the mobile network operator of failing to pay usage fees for the CJ ENM content it provided via its IPTV service.
The content arm of CJ Group confirmed Tuesday that it had filed a civil action with the Seoul Central District Court last week. The firm is seeking compensation for the alleged violation of its intellectual property rights over the past 10 years.
“From 2009 to March 2019, LG Uplus provided video-on-demand content created by CJ ENM to its subscribers with multiple set-top boxes, without properly paying for it,” said an official at CJ.
At the center of the issue is LG Uplus’ fee system, which differed from that of its bigger rivals.
While IPTV network providers KT and SKT charge content usage fees based on the number of set-top boxes they provide, LG Uplus charged each household a flat fee until 2019. This fee allowed customers to watch CJ’s content on multiple devices.
The flat fee system cost the content producers more than 10 billion won ($8.4 million), CJ said. Around 16 percent of LG Uplus IPTV service users own more than one set-top box.
“The three telecommunication networks -- KT, SKT and LG Uplus -- account for 70 to 80 percent of the entire IPTV market. This fight is not about the price, but more about sending the industry a warning signal to pay the right price for quality content,” said another spokesperson from CJ ENM.
LG Uplus argues that it complied with its contracts. Before 2019, there was no clause stipulating that content fees be paid per device, according to an LG Uplus spokesperson.
After signing an amended contract with CJ in 2019, it followed the same fee system as other IPTV providers, the official added.
CJ ENM and IPTV network providers have long been at odds over the cost of video content.
CJ previously proposed doubling its fee, but LG Uplus rejected the amount as “excessive.”
In June, CJ stopped providing content on Uplus Mobile TV, a mobile video-streaming service from LG Uplus, as the two failed to reach an agreement on the matter.
By Kang Jae-eun (email@example.com