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According to the Article 68, Korean Copyright Act (Compensation by broadcasting companies to phonogram producers), when a broadcasting company wants to use a commercial phonogram in its business, it shall provide proper compensation to the phonogram producer. The relevant regulations were newly established as the Korean Copyright Act was amended in 1987, and the Music Industry Association of Korea took charge of collecting and distributing royalties until 2001. We took over the task in 2002 and have operated it since.
While copyrighted work creators can exert exclusive rights with the broadcasting rights stipulated in the Korean Copyright Act, neighboring right owners do not have a right to keep the copyrighted works from being used, but do have the right to claim Compensation.
Current compensation in Korea, varying with broadcasting companies, accounts only for 1/10 of the broadcasting charge of the Creator (Writer and Composer). Association plans to adjust the amount on a gradual basis through sustainable negotiation with broadcasting companies so as to realize proper compensation.
Compensation shall be given to phonogram producers (those who fixed sound to a phonogram for the first time) or those who took over or succeeded the rights, under the Korean Copyright Act. However, those who released a compilation album by borrowing phonograms or only distributed phonograms are not qualified for compensation.
Compensation is calculated by dividing the amount collected from broadcasting companies in the relevant quarter by the number of the broadcastings monitored, and then by multiplying the unit cost by the number of phonograms of each copyright owner broadcasted (not number of appearances). In this sense, there may be a big gap in compensation between a quarter when the phonogram is broadcast many times and another quarter when it is not broadcast. The unit cost for each broadcasting company can vary depending on the quarter.
