Publication of the 2021 Broadcast Program Production Outsourcing Business Status Report.

▲ Comparative analysis of outsourced production contracts signed between broadcasters and independent video production companies and the results of a transaction inspection.
▲ 98.5% of broadcasters use standard contracts.
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On December 29, KISDI (President Kwon Ho-yeol) and the Korea Communications Commission (Chairman Han Sang-hyuk, hereinafter referred to as the KCC) published the “2021 Broadcast Program Production Outsourcing Business Status Report – with the focus on broadcasters”, a document that examines the current status of the outsourcing of broadcast program production.

The report contains the results of in-depth interviews and surveys conducted on 33 broadcasters and 171 independent video production companies who entered into agreements to outsource the production of broadcast programs in 2020, with a particular emphasis on the agreements. The KCC and KISDI investigated the status of outsourcing contracts issued by broadcasters, while the Ministry of Culture, Sports and Tourism and the Korea Creative Content Agency investigated the outsourcing contracts won by independent video production companies.

◆ Standard contracts are used by 98.5% of broadcasters, a slight increase (0.2%) from the previous year

The use of standard contracts by broadcasters and producers increased slightly from the previous year. Out of all outsourced production contracts, ▲ 98.5% of broadcasters used standard contracts and ▲ 89.8% of producers used standard contracts, showing a difference of about 8.7% (6.4% in 2020). Analysis of the data revealed a clear pattern of improvement in contracting practices when it comes to broadcast program production, as evidenced by the increasing preference for standard contracts. The surveyed broadcasters responded that they used standard contracts or quasi-standard contracts in 98.5% (98.3% in 2020 and 92% in 2019) of outsourced production contracts, which means the use of standard contracts rose slightly (0.2%) from the previous year. When the use of standard contracts by broadcasters is broken down by genre, ▲ standard contracts were used in 100% of transaction involving the production of dramas, ▲ and in 98.4% of transactions involving the production of entertainment programs and talk shows.

◆ Differences in perception between broadcasters and production companies regarding the appropriation of rights and level of agreement

There were some differences in perception between broadcasters and production companies regarding the appropriation of program rights, such as intellectual property rights. In the case of intellectual property rights (broadcasting rights, transmission rights, reproduction rights, and distribution rights), ▲ 74.1% of broadcasters and 74.6% of producers replied that such rights belong to the broadcaster, ▲ whereas 0% of broadcasters and just 8.8% of producers replied that the rights belong to the producer, ▲ and 25.9% of broadcasters and 16.7% of producers replied that such rights belong to both broadcasters and producers. However, in the case of the right to use the data, ▲ the proportion of respondents who replied that intellectual property rights belong exclusively to broadcasters fell from 56.3% to 51.9%, a decline of 4.4% from the previous year. ▲ Finally, the proportion of respondents who replied that such rights belong to both broadcasters and producers increased by 4.3% from 43.8% to 48.1%.

There was also a difference in perception between broadcasters and production companies regarding the level of agreement reached over the terms and conditions of contracts. ▲ When the rights to broadcast programs (e.g. intellectual property rights) were allocated, the broadcasters gave a score of 4.7 out 5.0 on the level of mutual agreement reached, and replied that there were strong agreements in most cases. However, production companies gave a considerably lower score of 3.0 out of 5, indicating a negative opinion about the level of agreement. ▲The level of agreement over the revenue sharing ratio also showed a similar pattern, with broadcasters giving a score of 4.7 out 5.0, and production companies again giving a score of 3.1 out of 5, revealing a clear discrepancy in their respective levels of perception.

◆ Revenues from sponsorships secured by producers, and the gap in perception between broadcasters and producers narrowed with regard to revenue-sharing

It was determined that the gap in perception between broadcasters and producers over the revenue sharing ratio has narrowed. Concerning the statement “Revenues from sponsorships secured by production companies should be allocated to the production companies”, ▲ 64.3% of broadcasters agreed with the statement (60.7% agreed in 2020), ▲ while 53.5% of production companies agreed with it (43.6% agreed in 2020). The 10.8% gap in perception between broadcasters and production companies is an improvement of 6.3% from 2020, when the gap was 17.1%.

This analysis was carried out as a part of the ‘Comprehensive Measures to Improve Unfair Practices in the Market for the Outsourced Production of Broadcast Programs’ announced by five government organizations (KCC, Ministry of Culture, Sports and Tourism, etc.) in December 2017. The analysis is conducted jointly by KISDI and the Korea Creative Content Agency and the results are published every year.

The ‘2021 Broadcast Program Production Outsourcing Business Status Report – with the focus on broadcasters’ can be downloaded free of charge from the KISDI website (www.kisdi.re.kr). The report contains the results of the surveys and in-depth interviews with broadcasters and production companies.