South Korea boasts world-beating tech firms and entertainment content that is currently hugely in demand, but locally-based SVOD companies are struggling to compete with the dominance of Netflix.
Competition for Korean eyeballs is set to intensify when Disney Plus launches in the country next month.
The CEOs of two Korean firms – Jay Yang of Tving and Phil Yoon of KT Studio Genie – discussed their dilemma on stage Tuesday at the Asian Contents & Film Market, that is allied with the ongoing Busan International Film Festival. One way to play catch up might be for all the Korean SVOD players to form an alliance.
“We are discussing with all the domestic players,” said Tving’s Yang. “There are huge risks, but if we don’t make quick decisions, we’ll fall behind.” Other key OTT players in Korea include Watcha, Coupang Play and Wavve, which itself is an co-venture involving three terrestrial broadcasters KBS, MBS and SBS and SK Telecom.
“We are interested in an alliance, but we are taking baby steps when it comes to producing content, securing original works and distribution. We must have better content to remain competitive,” said KT Studio Genie’s Yoon. “Telcos are latecomers [to the OTT game] and so we should partner up and share content, ensuring there is little overlap in viewership [as in the case with IPTV viewers].”
KT Studio Genie, is a newish holding company that contains all the media assets of telecommunications company KT Corp. (previously Korea Telecom). Its portfolio includes video streamer Seezn, IPTV service Olleh TV, satellite broadcasting provider KT SkyLife, music streamer Genie and recently acquired broadcasting channel business, Hyundai Media (formerly part of the Hyundai Department Store Group).
Tving has been around far longer. It started life in 2010 under CJ ENM, but a year ago was turned into a standalone operation with additional backing from producer-broadcaster JTBC and Korean internet giant Naver. Executives have previously expressed the ambition to reach 8 million subscribers by 2023. To date, it has backed 14 original pieces of content, including three feature films and the balance TV dramas and variety shows. “We had good response from viewers and are now thinking of second seasons for five programs.”
Catching up with Netflix will be no easy task. Researcher Media Partners Asia has forecast that Netflix could finish this year with six million subscribers. Market tracker, Nielsen Koreanclick estimated that it had over eight million monthly users in June. Netflix has achieved that by serving up dozens of Korean shows – licensed, co-produced and exclusive originals such as the recent hit “Squid Game” – with investments in Korean content running at around the same levels as its in country revenues.
Yang and Yoon pointed to quality content as Netflix competitive edge. “Consumers don’t choose to subscribe to OTTs based on whether they’re domestic or international. They choose the one that has interesting content,” said Tving’s Yang. He said that his company may also try to form an alliance with an international OTT players, and argued that money should not be a limiting factor that hinders the creation of good content.
Both bosses felt that the task of expanding into overseas markets would be harder still and a go-it-alone strategy would not work. The discussion then turned to the fanciful notions of ‘global super IP and a common content platform across production and distribution that would create a virtuous cycle and lower risks all round.
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