Netflix is attempting to increase its presence in the South Korean market in partnership with local IPTV service providers. Controversy may arise over network fees in relation to local mobile carriers.
According to industry sources, South Korean mobile carriers, which are planning to strengthen their media platforms, are currently positive about a partnership with Netflix. Negotiations are going on for a partnership between Netflix and LG U+, which recently provided a promo voucher for certain customers so they can use Netflix for three months.
The number of Netflix subscribers can increase at a rapid pace once it is combined with IPTV. Netflix made its debut in South Korea in January 2016 but the number is still small, 300,000 at most. This is because paid broadcasting is very cheap in the market and Netflix requires a dedicated over-the-top (OTT) box.
This, however, can be easily addressed by means of a partnership with local IPTV service providers. It also can increase the number of its subscribers by means of unique content of Netflix.
Those in the industry, however, are pointing out that network fee issues should be solved in advance. Netflix is already in the South Korean market via system operators yet is paying no network fees.
At present, CJ Hello and D’Live are running cache servers as network equipment for saving time regarding frequently searched information. This is limited to users with certain set-top boxes though. South Korean mobile carriers currently have no Netflix cache server and most Netflix users in South Korea are using the service directly via servers in the United States.If Netflix is combined with IPTV under these circumstances, disputes may arise in the form of reverse network fee discrimination and so on. Cache server installation and profit distribution adjustment are being mentioned as possible solutions to the potential disputes.