The key to success for the new over-the-top (OTT) platform to be created by SK Telecom and Korea’s three terrestrial TV broadcasters is securing influential partners, industry analysts say.
SK Telecom and the three TV broadcasters -- KBS, MBC and SBS -- have agreed to integrate their OTT services “Oksusu” and “Pooq” to challenge global video streaming giant Netflix.
But industry watchers note that the Korean OTT alliance still has a good way to go as the integrated platform has a combined service utilization rate of less than 5 percent. The status of the three terrestrial broadcasters has deteriorated compared to the past.
Even though the Korean OTT alliance unveiled its new blueprint by dividing roles among themselves, it is still questionable whether the new platform can compete well with YouTube or Netflix.
YouTube has a 85 percent share of the mobile video market while Netflix plans to spend about $7 billion on producing its own content this year. Some industry watchers say that in light of YouTube’s power and Netflix’s investment in content, the Korean OTT alliance is hard pressed to enter the fray with YouTube and Netflex. They say that the Korean OTT alliance has to secure good partners in order to get into its stride.
The new OTT platform has to compete with domestic platforms as well. In Korea, Naver TV and Kakao TV have the highest utilization rates except YouTube and Facebook. The combined utilization rate of Oksusu and Pook is lower than that of Naver TV.
In terms of content, the Korean OTT alliance has to join forces with JTBC and CJ ENM. The drama and entertainment content of the two cable TV broadcasters are more competitive than that of the terrestrial broadcasters. In fact, SK Telecom and the terrestrial broadcasters contacted JTBC and CJ ENM before forging the alliance.
The Korean OTT alliance said that they would not rule out the possibility of joining hands with various partners including broadcasting companies, content producers and distributors at home and abroad for co-production and distribution of content.