‘Netflix craze’ swept the pay TV market… Media subordination gets worse

Input 2020.12.25 06:00

Netflix releases 8 Korean original contents next year
LG Uplus and KT Netflix increase user satisfaction through partnership
Communication industry-Disney partnership is also the media industry’s biggest concern

Netflix’s influence in the domestic media market is increasing day by day. IPTVs, which are the strongest players in the existing pay-TV market, need to cooperate with Netflix to attract consumers’ attention. There is a prospect that the domestic media industry can quickly become subordinate to global OTT (online video service) such as Netflix.

Under this trend, it is evaluated that after Disney’s entry into the Korean market next year, the partnership with Netflix and Disney can influence the content competitiveness of pay-TV. While securing content through alliances with global OTT can increase customer satisfaction, some point out that content competitiveness in the domestic media industry can be lowered.

◇ Netflix, which has surpassed 3 million subscribers in Korea… will pour out its own K-contents next year

According to the industry on the 25th, Netflix is ​​next year ▲If you like it 2 ▲Nemesis ▲The Sea of ​​Silence ▲Move to Heaven ▲Squid Game ▲Hellbound (Hell) ▲DP ▲Now our school is a series of 8 original Korean contents (exclusive content) Reveal.

Netflix has invested about 770 billion won (about $700 million) in discovering and exporting Korean content from 2015 to 2020. <킹덤>and <인간수업>Currently, more than 70 works have been exported overseas as Netflix’s original contents in collaboration with Netflix’s own productions and Korean content producers. Exported with subtitles in more than 31 languages ​​and dubbing in more than 20 languages.

These achievements were also linked to Netflix’s performance. In announcing its third quarter results, Netflix announced that subscribers in the Asia Pacific region, including Korea and Japan, contributed the most to the increase in total paid members. Netflix saw an increase of 2.2 million new paid subscribers in the third quarter of this year, of which 1.01 million (46%) occurred in the Asia-Pacific region, mainly in Korea and Japan. As of the end of September, the number of paid subscribers in the Asia-Pacific region was 23.5 million, and in Korea, it was estimated at 3.3 million, or 14%.

According to the announcement of Nielsen KoreaClick in September, Netflix is ​​taking a 40% market share, overtaking domestic OTT Teabing and Wave. This shows that Netflix is ​​rapidly dominating the tastes of domestic media consumers.

◇LG U+-KT in partnership with Netflix, ranked 1st to 2nd in user satisfaction

Thanks to this influence, in the user satisfaction category of this year’s paid broadcasting service quality evaluation survey announced by the Ministry of Science and Technology LG U+ (032640)Wow KT(030200)Is analyzed to be ranked first and second respectively, receiving higher scores than last year.

Both companies are providing IPTV service in partnership with Netflix. LG Uplus, which partnered with Netflix at the end of 2018, recorded 1 trillion won in IPTV sales last year for the first time ever. Following LG Uplus, KT, which formed an alliance with Netflix, achieved a net increase of 128,000 IPTV subscribers in the third quarter, reaching 8.68 million cumulative subscribers.

From the perspective of Netflix, it was possible to expand the audience, which was centered on the 20th to 30th generation, by exposing Netflix to the home TV through a partnership with a telecommunications company.

On the other hand, SK Broadband, which ranked first in user satisfaction in last year’s survey, was pushed to third place. SK Broadband is a bit embarrassed by the results of this investigation. This is because the evaluation was bad even though the advertisement time pointed out last year due to viewer complaints was shortened. In fact, SK Broadband recorded the lowest advertisement time among the three IPTV companies compared to its competitors. SK Broadband’s VOD ad time was 15.85 seconds and the frequency was 0.79, which was similar to or slightly lower than that of cable TV

An official from SK Broadband said, “There are various survey items not only for user satisfaction, but also for pay-TV competitiveness evaluation. The VOD advertisement time that was pointed out in the last year’s survey has improved greatly,” said “I will continue to think about other improvements.”

In the user satisfaction category of paid broadcasting service quality evaluation, we look at subscription, installation, use, and after-sales service. The media industry sees this result as the effect of the Netflix partnership, but KT and LG Uplus are reluctant to comment. In particular, Netflix can be sensitive in the context of litigation over rival SK Broadband and’network usage fee’.

A KT official said, “KT is the best in’video experience quality’, which is an important item in paid broadcasting services, and KT ranks first among the three IPTV companies in terms of the number of real-time channels, total VOD and free VOD contents in terms of content provision.” . An official from LG Uplus explained, “We significantly strengthened service quality such as channel switching time this year, and increased customer satisfaction during subscription installation through a home service subsidiary became the basis for achieving the No. 1 user satisfaction level.”

◇Netflix and Disney partnership…Korean media market’double-edged sword’

In response, an official from the Ministry of Science and ICT explained, “The user satisfaction category was comprehensively evaluated for the entire range of use including content.” This can be interpreted as partial recognition of the Netflix effect by the government.

If you look at the usage part in detail in the user satisfaction that evaluates actual subscription, installation, use, and AS, etc., items such as ▲image quality and sound quality ▲real-time channel and VOD contents ▲other services and contents ▲service performance (loading, remote control, response speed), etc. You can see that it entered.

Professor Kim Yong-hee of Soongsil University (Department of Business Administration) said, “In the case of LG U+, the usability innovation including UI and UX improvements including VOD service was large, but it was obvious that Netflix influenced 40% of the ranking in this evaluation. Seems to be,” he said.

In this situation, even Disney, one of the most powerful opponents of Netflix, announced its entry into the Korean media market next year through its OTT’Disney Plus’. Industry forecasts that Disney will form alliances with domestic carriers in some way to rapidly spread subscribers.

Professor Kim said, “Following Netflix, Disney’s entry into Korea and cooperation with IPTV are positive in terms of content diversity and customer satisfaction, but there is a risk of being subordinated if the domestic OTT platform cannot increase its competitiveness in the mid- to long-term and occupy a certain portion of the market.” Looked out.