[Lee Gu-sun’s Slow Walk] The Cable TV Crisis Is a Policy Crisis

[Financial News] The cable TV industry is in turmoil, with contracts falling apart and legal disputes erupting one after another across the sector.
LG HelloVision failed to reach an agreement with CJ ENM on content fees and has finally decided to stop carrying four channels starting November 26. D-LIVE says it will soon suspend carriage as well. Thirteen cable TV operators have even filed administrative lawsuits against the government, arguing that the levy imposed for the Broadcasting and Communications Development Fund is unfair. Their business revenues are shrinking and they are running deficits, yet the government has no intention of easing regulations. Within the industry, operators are left with little choice but to fight over how to divide up their meager profits.
There is nothing particularly new about cable TV struggling as a business.
In 2024, cable TV system operators (SOs) posted operating losses of 184.1 billion won in their broadcasting businesses. Of the 571.9 billion won in revenue from subscriber fees, 516.6 billion won was paid out in program fees. In other words, most of the money earned from selling broadcasting services went to pay for content.
Subscribers and revenues are declining, but with the principles for setting content prices left entirely to negotiations between operators, it is hardly surprising that those negotiations do not go well. SOs say prices should reflect the decline in subscribers and ratings, while content production companies insist that production costs and the value of their content should be recognized. With the government failing to establish trading standards acceptable to both sides, negotiations end up leading to lawsuits and channel suspensions.
One could dismiss the cable TV crisis as something the government or outsiders need not meddle in. But on closer inspection, it seems the crisis in the cable TV industry may actually be a crisis in the government’s pay-TV policy.
In fact, cable TV is an industry created by the government through its new media policy. The government built the industry’s structure and brought operators into the market through strict regulation and market segmentation. It then went on to launch new media businesses, including satellite broadcasting and IPTV. Even then, although the government changed the market, it did not revise the rules governing how operators compete and do business.
Even as internet streaming services (OTT) such as Netflix encroached on the pay-TV market, the government left pay-TV regulations unreformed, keeping the industry bound by rules designed for an earlier growth phase. With policy holding cable TV back, it has no way to compete in the market.

Cable TV also shoulders some of the welfare responsibilities that should fall to the government. When the government pursued its digital broadcasting transition policy in 2014, it introduced one-way digital broadcasting (8VSB) as a digital broadcasting welfare measure for people unable to watch digital broadcasts because of the cost of equipment or additional expenses. It lets viewers watch broadcasts on a digital TV without a separate set-top box, at an affordable cost of around 5,000 won a month. At the end of 2024, 8VSB had 5.59 million subscribers, close to half of all cable TV subscribers. Although it is a government digital broadcasting welfare policy, cable TV operators bear the cost of maintaining the network and facilities.
Other countries are adjusting their obligations and rules to keep pace with changes in the broadcasting industry. In May this year, Canada established a new fund to support broadcasting services with significant public value, including local news and Indigenous content. Last year, the United States eased rate regulation for small cable TV operators and streamlined unnecessary administrative procedures. In other words, it tailored the regulatory burden to operators’ size and market conditions.
It is late, but I hope our government will review its pay-TV policy as a whole. It should establish objective standards for content fees that take into account subscribers and viewing performance, as well as production costs and investment value. It should also develop ways to make dispute mediation more effective so viewers are not harmed every time negotiations break down. The burden of the Broadcasting and Communications Development Fund should be redesigned after considering operators’ revenues, financial conditions and public roles. The government should also explore ways to share costs with operators for services such as local channels and 8VSB, which are difficult to sustain on market revenues alone.
The point is not to save cable TV. Government policy, too, must move beyond operator-by-operator silos and change to guarantee the public’s right to watch, so that everyone can consume content without distinguishing between cable TV, IPTV and OTT.

[email protected] Lee Gu-sun Reporter