Video Content Battleground

The Korean market has an advantage of being utilized as global media’s test beds before their entry into China.
The Korean market has an advantage of being utilized as global media’s test beds before their entry into China.

 

Korea is emerging as a battleground for global media giants. Netflix which started domestic service early this year participated in production of Korean TV shows and films and acquired their exclusive overseas broadcasting rights. YouTube is promoting K-pop star “Big Bang” as a core content of its paid service “YouTube Red.” In addition, Amazon began to provide its service to Korean homes by airing the over-the-top (OTT) “Prime Video” via smart TVs of Samsung Electronics and LG Electronics.

The reason why global media giants are coveting the Korean market is that Korea boasts the world's fastest ICT infrastructure for downloading large volumes of videos and real-time playbacks and Korea is a big market as more than the half of OTT service customers in Korea use a monthly fixed rate system. In particular, the Korean market has an advantage of being utilized as their test beds before their entry into China, the largest market in the world.

However, few Korean pay-TV and telecommunication companies, which dominate the Korean IPTV and OTT markets, dared to invest in production of their own contents. They are still replaying network TV programs. Especially, SK Telecom and CJ Hello Vision announced that they will produce own content after merging with each other but their merger was put on hold by the Korean government. Therefore, an opinion is strengthening that measures are needed to promote the Korean contents business.

According to related industries on December 15, LeEco called the “Netflix of China” started to exchange contents between Korea and China by establishing a joint venture in Korea after Netflix, YouTube (Google) and Amazon. LeEco is China's largest OTT operator with nearly 75 million monthly active users (MAUs).

In 2004, LeEco expanded the number of its subscribers by offering videos of its own production like Netflix at the time of its establishment in 2004 and based on the subscribers, is successfully expanding its business into the hardware (HW) area such as smartphones, smart TVs and connected cars. In other words, harnessing users who are enthusiastic about LeEco contents, LeEco made a foray into Korea after the United States, India and Russia, making mobile phones, TVs and cars. “LeEco has proven that media dinosaurs should not be viewed as simply a video platform,” a representative of a social network service (SNS) company. “Its market capitalization exceeded 19 trillion won (US$17 billion) based on a network of customers who fell in love with contents of its own production."

That is why industry experts are pointing out that advancement into the Korean market by global ICT giants such as Netflix, YouTube and Amazon should not be considered a tempest in a teapot.

Copyright © BusinessKorea. Prohibited from unauthorized reproduction and redistribution