The digitalization of content is transforming the media and entertainment industry in Korea. Video streaming platforms have been on the rise even before COVID-19, however, the COVID-19 situation has really accelerated this trend. After years of fast growth, the streaming industry in Korea is expected to grow even more in the coming years. There is now a huge global demand for Korean content due to the global expansion of K-pop, K-drama, and Korean culture. Also, there is a high demand for video streaming services in South Korea like never before. It is estimated that the Korean video streaming market stands at over $680 million according to the Korea Communications Commission.

The streaming market is also known as OTT (over-the-top) market. This includes all types of media services and content offered to consumers directly online. Now media platforms no longer have to go through cable companies, broadcasters, and TV networks. This is really changing the content consumed in Korea and many big players in the media industry are scrambling to adapt.

Why Korean Consumers are Moving to Video Streaming Platforms

According to the yearly report by the Korean Film Council (KOFIC), the total revenue from SVOD platforms in 2019 reached $58 million in Korea. Compare this to 2018 where combined revenue was $4 million. The number for 2020 is not yet in but it could be as much as $100 million. Why such rapid growth? Almost every consumer in Korea owns a smartphone. Therefore, consumers in Korea have access to content right at their fingertips. Therefore, the demand for OTT or SVOD (Streaming Video on Demand) series is all about convenience. They want easy access to content so they can watch it where they want when they want, and with any device.

With many young customers in Korea moving towards these SVOD services, the prices need to stay relatively low. Many SVOD providers charge low monthly fees when compared to going to a movie theater in Korea which could cost you at least 30,000 won. Many SVOD platforms in Korea offer original content that is also high in quality.

Most SVOD platforms in Korea follow the same strategy set by Netflix. This strategy includes creating original content for its subscribers. As more and more premium content that would have been released in theaters will now be made directly available on these platforms due to COVID-19. The SVOD industry in Korea will accelerate even further. 

Top Video Streaming Services in South Korea

Netflix Korea

Netflix Korea Video Streaming Services in South KoreaNetflix is the top Video Streaming Platform in South Korea. Back in 2018, Netflix partnered with LG Uplus Corp. to offer its content on LG’s pay-TV service. In addition, in 2020, they were able to partner with telecom operator KT Corp. to offer their services on KT’s pay-TV platform Olleh TV. Therefore Olleh TV subscribers now have access to Netflix. The two Korean telecom companies hold a combined 35% share of Korea’s pay-TV market. Now, Netflix has the most active users among the OTT services in Korea with an estimated 7 million subscribers. 

Some of the most popular Korean originals on Netflix include the zombie thriller Kingdom (2019) and the teen romance “Love Alarm” (2019). Netflix has been able to thrive in Korea because they have been buying the copyright of Korean films outright. 

Netflix will need to continue to make big investments in Korea and help make Korean pop culture more accessible outside of Korea. Since 2015, Netflix has invested over $700 million to finance partnerships and co-productions in Korea. To date, there are more than 70 Korean-made shows that are available in over 30 subtitled languages and more than 20 dubbed languages. 

Netflix Law 

The Netflix Law was passed back in May of 2020. It requires all content providers (Foreign and Korean) to share network costs with internet service providers in Korea. There are costs for internet service providers in Korea like SK and KT in expanding their network infrastructure to support the high amount of traffic from Netflix. 

Wavve

WavveKorean OTT service provider Wavve was launched by 3 Korean terrestrial broadcasting companies (KBS, MBC, and SBS) in September of 2019. It offers both paid and unpaid memberships and in total has over 10 million subscribers with 3.5 million being paid subscribers. They have monthly subscription models as well as one-off payment models for their movies. They also offer child protection functions, a recommendation system, and an easy purchasing process. Wavve plans to invest $251 million into creating original content over the next 4 years. They have already begun investing in original content and well as getting exclusive release deals for foreign content. There have been talks of a merger with Tving, a Korean SVOD platform to compete with Netflix. 

“We are investing our proceeds back to content production to grow as a platform that can contribute to the growth of Korea’s media content industry. We will continue to make more aggressive investments next year to meet the expectations of users for our original content,” said the CEO of Wavve Lee Tae-hyun.

TVING

TVINGTVING is a video-on-demand platform that is run by Korean media company CJ ENM. Subscribers can watch both foreign and Korean movies as well as original content. TVING is available on smart TVs, PCs, and mobile devices. In addition, they offer TVING Mall where viewers can purchase products directly on the platform. Currently, the OTT platform has 2.5 million monthly subscribers. TVING will do a joint venture with broadcaster JTBC in late 2020 to produce stronger content. 

YouTube Premium 

YouTube Premium Video Streaming Services in South KoreaYouTube Red was launched in Korea back in late 2016. It was a new ad-free subscription service for its YouTube Platform. It offered a range of exclusive viewing options for paying subscribers. At the time it only cost 7,900 won and subscribers were able to watch ad-free videos and continue playing videos in the background while other apps were running. In addition, they had access to new video content available exclusively through YouTube Red. YouTube Red later became YouTube Premium. It still offers an ad-free experience, background play, and downloads across the millions of videos on YouTube. YouTube Premium currently costs 9,500 won a month.

The Future of Video Streaming in Korea

With the massive success of Netflix in Korea, many other global OTT services like Disney+ and Apple TV are looking to start to launch their services in South Korea. This could be very bad news for Korean OTT services like Wavve and TVING. It is also bad news for major theaters in Korea like CGV and Megabox. As consumers in Korea start to see all the content available online, video entertainment from home will be an essential part of life in Korea moving forward. Major entertainment companies and channels understand this and are looking to make streaming an essential part of their business. It is possible that consumers in Korea will see the value in multiple streaming services and will be willing to pay for both.

Early signs show while Netflix is doing great in Korea, Korean OTT Services like Wavve and TVING are still seeing a rise in subscribers. This proves that consumers in Korea don’t see the video streaming market as a zero-sum game. Will this change if more OTT services enter Korea? This is the big question. The future will probably have different OTT services that provide curated content for niche sectors. One platform will not be able to handle all forms of content in Korea. New content creators in Korea will have more options to shop around their content. This will create niche OTT services that specialize in a particular industry. One thing is for sure, with 5G technology, VR/AR, and the strong IT infrastructure in South Korea, OTT is here to stay.