Will Netflix Retain Its Throne as Korea's Top OTT Platform Next Year?

Wave, TVING, Disney+, and Other Domestic and International Competitors' Counterattack
Legal Disputes Over Network Usage Fees Also a Burden

[Image source=Yonhap News]

[Asia Economy Reporter Koo Eun-mo] This year, Netflix solidified its position as the undisputed king of the online video service (OTT) market by achieving consecutive global hits with ‘Squid Game’ followed by ‘Hellbound.’ Although Netflix has firmly held the top spot, attention is focused on whether it can maintain its throne next year amid ongoing challenges from domestic and international OTT competitors and legal disputes over network usage fees.

According to market research firm Nielsen Korean Click on the 21st, Netflix recorded 9.48 million monthly active users (MAU) in September, marking its highest since launching domestic service. Although it set a record with 8.99 million MAU in January, it experienced a decline afterward, leading to speculation that the COVID-19-related surge had ended, making this rebound notable.

In August, Netflix ignited interest with ‘D.P.,’ and in September, it crowned its success with the global hit ‘Squid Game.’ Over 140 million households worldwide watched Squid Game, making it the most viewed Netflix original series, and it held the number one spot for 46 consecutive days from September 23 to November 7, setting a new record for the longest duration at number one. Following this, K-content such as ‘My Name’ and ‘Hellbound’ continued to succeed, further solidifying Netflix’s position as the strongest OTT both domestically and internationally.

[Image source=Yonhap News]

Despite Netflix’s best year, it is difficult to guarantee it will maintain its throne as challenges from domestic and international OTT competitors continue. According to Mobile Index released by mobile big data platform company IGAWorks, as of the third week of last month, the average usage time per person for major OTTs showed Wavve leading with 236.8 minutes, surpassing Netflix’s 191.35 minutes. Tving (186.73 minutes) and Coupang Play (103.35 minutes) ranked third and fourth respectively, while Disney Plus (+) remained fifth with 100.18 minutes.

While Netflix content continues to dominate in terms of global buzz, domestic OTTs are enhancing their competitiveness by leveraging distinctive original content. Wavve has compensated for its weaknesses by securing exclusive domestic rights to over 70% of HBO’s major works since last July, along with familiar content from the three major terrestrial broadcasters. Recently, the original drama ‘Since We Met, We Went to the Blue House’ attracted attention ahead of the presidential election. Tving has also gained popularity among younger viewers with dramas like ‘Work Later, Drink Now’ and variety shows such as ‘Street Woman Fighter’ and ‘Transit Love.’

Disney+ and Apple’s ‘Apple TV+,’ which launched domestic services last month, have shown relatively sluggish initial performance but are considered potential long-term threats to Netflix. Disney+ faced early challenges such as poor subtitles, and while its content volume is overwhelming, it has been criticized for lacking freshness. Apple TV+ is limited in accessibility as its viewers are restricted to Apple device users. However, both are expected to gradually increase their market share due to their overwhelming intellectual property (IP) and investment capabilities.

Despite generating massive traffic domestically, Netflix has not paid any network usage fees, sparking controversy over ‘free-riding’ on network costs. Recently, Netflix’s surprise subscription fee hike has added to the burden. On the 18th of last month, Netflix announced an increase in its standard plan from 12,000 KRW to 13,500 KRW per month and its premium plan from 14,500 KRW to 17,000 KRW per month.

Netflix argues that the price increase is inevitable to maintain service through content investment, but raising fees amid ongoing free-riding controversies has inevitably sparked debate. Some speculate that Netflix raised prices preemptively as the National Assembly is pushing a bipartisan bill to mandate payment of network usage fees.

Netflix filed a lawsuit against SK Broadband, claiming that demands for network usage fees violate the principle of net neutrality. However, the first trial court ruled against Netflix, stating that “Netflix has an obligation to pay for accessing the internet network through SK Broadband.” Netflix has appealed the decision, and SK Broadband has filed a counterclaim demanding the return of unjust profits from Netflix. Both companies are preparing for the second trial hearing scheduled for the 23rd.

[Image source=Yonhap News]

This content was produced with the assistance of AI translation services.