The Changing Landscape of Creator Compensation: From Advertising to Subscriptions and Sponsorships

The Changing Landscape of Creator Compensation: From Advertising to Subscriptions and Sponsorships

In the competitive market of content creation, even latecomers like Naver are trying to establish their presence to ensure creators are adequately compensated. Platforms like Instagram, TikTok, and YouTube are facing fierce battles to retain their share of the market.

However, beyond the struggle for market dominance, there are deeper issues at play. One of the biggest concerns is Google's implementation of its greedy policies. But even more problematic is the government's perplexing intervention efforts. In February of this year, the Ministry of Culture, Sports and Tourism announced the "Revision of In-App Commission Authority." The amendment process for collecting royalties for musical works is established by law. The procedure involves the copyright collective society proposing the revision, seeking approval from the ministry, and undergoing review by the Korean Copyright Commission. Finally, the Ministry of Culture, Sports and Tourism grants approval. However, this time, the revision of the collection of royalties did not follow this procedure. There was no proposal from the copyright collective society, nor did they seek approval from the ministry. Nevertheless, the government stepped in to assist the global giant platform, Google, and proposed a solution that would shift the burden of damages onto copyright holders and consumers.

To illustrate, if a music consumer was using a music streaming service for 10,000 KRW per month, 3,500 KRW would go to platform operators like Melon, while 6,500 KRW would be distributed to copyright holders. However, Google wants to charge an additional 15% in in-app payment fees for music transmission. According to the collection rules, if the in-app payment fees are calculated based on revenue, then 1,500 KRW out of the 3,500 KRW would go to Google. As a result, music streaming providers like Melon request that the in-app payment fees be excluded from the revenue. The Ministry of Culture, Sports and Tourism accepts this request, but Google shows no intention of complying with the law. What is even more astonishing is that the Ministry of Culture, Sports and Tourism itself also doesn't seem inclined to enforce the law. Intellectual property rights for music are unquestionably considered intellectual property. Therefore, the collection rules for intellectual property rights should respect the copyright holder's autonomous decision. However, changing the rules through administrative authority violates the proportionality principle guaranteed by the constitution (Article 37, Paragraph 2 states, "All freedoms and rights of citizens may be restricted by law only to the extent necessary for national security, maintenance of order, or public welfare, and even in such cases, the essential content of freedom and rights shall not be infringed."). Moreover, such decisions only result in the formalization of the law without preserving its essence or meaning. Who can trust such an unbelievable government?

The changing landscape of creator compensation raises important questions about fair compensation and the appropriate role of government intervention. As platforms continue to diversify their revenue streams, it is crucial to ensure that creators are not exploited and that their intellectual property rights are respected. Here are three actionable pieces of advice for creators and platforms alike:

1. Foster transparency: Platforms should provide clear and detailed information about their compensation models, including advertising revenue sharing, subscription fees, and sponsorship opportunities. This transparency will empower creators to make informed decisions and negotiate fair compensation.

2. Empower creators: Creators should not hesitate to assert their rights and negotiate for fair compensation. They should collaborate with other creators and industry professionals to create collective bargaining power and advocate for their interests. By uniting, creators can create a stronger position to ensure fair compensation.

3. Advocate for balanced regulations: Creators, platforms, and industry associations should engage in constructive dialogue with policymakers to advocate for balanced regulations that protect intellectual property rights while fostering innovation and competition. It is essential to find a middle ground that benefits all stakeholders involved.

In conclusion, the evolving landscape of creator compensation highlights the need for fair and transparent practices in the content creation industry. As platforms battle for market dominance, it is essential to prioritize the rights and compensation of creators. By fostering transparency, empowering creators, and advocating for balanced regulations, the industry can create a more equitable environment for all parties involved.