As foreign video platform operators introduces unskippable ads to maximize ad revenues, non-paying users are expected to face more inconvenience. It remains to be seen whether non-paying users will become paid subscribers in droves or they simply stop using such video services, bringing a big change to the Korean online video service market, which is dominated by foreign video platform operators.
According to internet industry watchers on September 3, YouTube introduced 15- to 20-second unskippable ads in September. Netflix is also considering streaming unskippable ads, even though it is based on a flat fee model.
YouTube’s push to expand its advertising revenues and promote its paid service is receiving mixed responses from users. "The introduction of unskippable ads is positive news to content creators for YouTube,” said an industry expert. “But it is bad news to non-paying users, who were able to skip ads in five seconds but now have to wait for 15 to 20 seconds to watch content on YouTube."
The internet video service industry is carefully monitoring the market as YouTube's conversion to ads over 15 seconds or longer could change the industry landscape.
Unlike YouTube, Korean internet services such as Naver and Kakao have added 15-second introductory ads to most of their video content. Many experts pointed out that Korean internet services were less user-friendly than YouTube, which included five-second introductory ads in their video content.
The experts say that most consumers will likely wait for 10 more seconds to watch videos rather than subscribe to the paid YouTube service.
Netflix, an online video streaming service, has been stirring up a controversy by inserting ads in video content even though it is a flat rate service. The ads were produced by Netflix and cannot be skipped unlike commercial ads and run for 10 to 20 seconds. "They are not commercials but recommended videos. It is possible to skip them," a Netflix official said.
Korean mobile service carriers pushing forward with partnership with YouTube and Netflix are also focusing on what changes the paid service and longer ad time will bring to the internet video service market. In particular, they are paying attention to changes in the market as Netflix’s content policies will change dramatically as Disney content will be removed from Netflix’s playlist next year.