On January 31, the Ministry of Culture, Sports and Tourism pushed for legislation stating that autonomous ‘holdback’ guidelines are the principle of preparing and complying with film investment. However, the conflict between the film industry, which advocates for pushing forward with legislation, and the Over-The-Top (OTT) industry, which sees it as excessive regulation, intensifies as time passes.
‘Holdback’ refers to the expiration date of a certain period before movies screened in theaters can be distributed on other platforms such as IPTV or OTT. The conditions for legislating holdback are expected to be similar to those implemented last year on a trial basis, excluding movies with a budget of less than 3 billion and setting the period to around four to six months.
The film industry has traditionally operated holdbacks according to autonomous agreements within the industry, allowing for a certain period of distribution in sequence: theaters, IPTV, OTT, and TV channels. However, the film industry has been hit hard after COVID-19, significantly decreasing in moviegoers. They added that during the severe COVID-19 period, masterpieces could not be released and immediately moved on to OTT, exacerbating this pattern. As a result, movie theaters, distributors, and production companies favor legislating holdbacks to revitalize the film industry.
On the other hand, the OTT industry opposes holdback, saying it is an excessive regulation that limits viewers’ choices. They argued that keeping movies as holdbacks for longer could increase illegal downloads, resulting in worse outcomes. They added that if movies are held back for a long time, it will not only reduce the value of the movie and eliminate viewers’ interest but also reduce profits due to the holdback mandate for OTT contracts, which account for a large portion of secondary market profits.
The Ministry of Culture, Sports and Tourism said, “Even within the film industry that sympathizes with the need to introduce holdbacks, there are differences of opinion among production companies and investment distributors regarding the preconditions.” They expressed the opinion that industry stakeholders should engage in autonomous agreements before pushing for legislation.
