OTT Big Bang… KT makes 100 dramas

◆ The turbulent OTT market ◆

While Netflix, the world’s largest online video service (OTT) company, has dominated the domestic content market with over 10 million subscribers in recent years, the OTT market is fluctuating as the global content dinosaur Disney announced its will to partner with a domestic telecommunications company ahead of landing in Korea in the second half of this year . In addition, KT, a telecommunications company, declared that it will invest more than 500 billion won in content production, including dramas, and it is a sign that even the destruction of sectors between industries will become active. In particular, the possibility of partnership was raised when Disney and KT held a press conference at the same time on the 23rd.

KT CEO Sue Su-mo said, “The media platform with 13 million subscribers such as IPTV (Internet TV), Skylife (Satellite Broadcasting), and Season (Internet Video Service) is KT’s core platform” at the KT Group’s media content business strategy presentation meeting. “To further strengthen and develop the media platform, content is now essential,” he said. Regarding the content investment, Koo said, “It will be the highest amount among domestic operators.

KT, which is transforming into a digital platform company (Digico), announced that it will secure 1,000 original intellectual property rights (IP) by 2023 and produce 100 original dramas. In the industry, it is estimated to be worth 500 billion won. It is expected to be the largest short-term investment in the media and contents sector since the founding of KT. This year alone, it falls short of Netflix, which announced a plan to invest 500 million dollars (about 550 billion won) in domestic content, but more than SK Telecom, three terrestrial broadcasters (300 billion won), and CJ ENM Teabing (400 billion won). With the advent of Netflix, the border between the platform and the content market is collapsing, and not only existing broadcasters, but also telecommunications companies and portal companies are fighting for content security. “Technology compatibility is very important, and we will select a partner by looking at security and service delivery methods in a comprehensive manner,” said Luke Kang, general manager of Walt Disney’s Asia-Pacific region, in an interview with Maeil Economic Daily.

KT reaching out to Disney… Confront SKT·CJ ENM with its own content

OTT enters the survival race

In general offensive such as Dinosaur Netflix
Media platform area is destroyed

KT, mobilization of professional studios
Teabing is a combined product with Naver
Distributor Coupang, sports broadcast

1.5 times increase in domestic OTT last year
Market size is likely to exceed 1 trillion this year

The battlefield of domestic platform companies is spreading to the content market in the Netflix air raid. Existing broadcasters and native online video service (OTT) companies such as Watcha are competing fiercely with foreign companies, while telecommunications companies with 5G (5G) networks are in the forefront. Naver and Kakao are also working hard to secure content, and distribution dinosaurs such as Coupang have also been added. He realized that if you catch viewers with good content, you can strengthen your platform’s dominance. Another background for jumping into the content market, both of you and me, is the emergence of a’variant’ called Netflix. Until now, domestic content providers and platform providers have been doing business in their respective fields. However, as Netflix absorbed subscribers with content as a weapon and evolved into a platform, it caused a market big bang.

The rapid change in the OTT market environment over the past 1-2 years also plays a part. As’Zipcock’ is getting longer due to Corona 19, the OTT market is growing rapidly. The domestic OTT market reached 781 billion won last year, more than 1.5 times larger than in 2018 (5136 billion won). It is certain to exceed 1 trillion won this year. Following Netflix, competition intensified as global dinosaurs such as Disney Plus, HBO Max, Apple TV+, and Amazon Prime Video were foreshadowed.

The most notable change is that viewers have started watching Korean dramas and movies on Netflix. Netflix has completely dominated the Korean market, including a recent survey that the Netflix viewership has exceeded 11 million. Now, people watch’Seungriho’, which could not be released in theaters on Netflix, and on weekends they run Korean dramas such as’Kingdom’ and’Sweet Home’. Netflix, which was regarded as a means to watch foreign dramas and movies, which content enthusiasts were not well known about two to three years ago, has deeply penetrated into the daily life of Koreans. Netflix’s market share is close to 40%. On the other hand, the number of OTT users in Korea was 5.59,973, down from January of last year (57,68,838).

Encouraged by the performance of the Korean market, Netflix is ​​significantly strengthening its investment. An official from the domestic production company Studio Dragon said, “K-dramas are gaining popularity around the world and demand is increasing.”

Domestic companies are also fighting back for survival. KT decided to start producing contents by mobilizing the group media platform, starting with KT Studio Genie, a content company that was newly established this year. It analyzed 700 billion media big data per year from 13 million customers to build a content box-office prediction model. This is used for content planning and production and platform selection.

It plans to build an open content ecosystem that shares not only content revenue, but also KT’s media platform and intellectual property rights (IP) assets with production companies and other platform companies. It is known that there is a high possibility of partnering with Disney among global media companies thanks to this strategic effect. Kang Kook-hyun, head of KT’s customer division, said, “We are reviewing the cooperation model with Disney from various angles.” KT has invested in technology to immediately burn content from overseas companies such as Amazon as well as Disney on its own media platforms such as Olleh TV.

Just as CJ ENM and Studio Dragon have partnered with Netflix for three years, they can not only service Disney Plus through KT’s Internet TV, but also stream KT’s contents on the Disney platform to stream or promote co-productions around the world. It means that there is. KT’s first work is expected to be released within the third quarter of this year. It set a goal to produce more than 100 dramas over the next three years, including a 50 billion won’Tentpole’.

CJ ENM, which operates Teabing, joined hands with Naver’s paid membership service, Naver Plus, on the 4th. This is a service that allows you to accumulate up to 5% of the payment amount on Naver Shopping as pay points if you pay a monthly fee of 4900 won. By adding unlimited teabing access to the content benefits of users of this service, about 2.5 million Naver Plus users can also be attracted to teabing customers. This is the first case of collaboration in the OTT field after CJ ENM and Naver agreed to exchange shares for comprehensive cooperation in October last year. An official from CJ ENM added, “We will focus on K contents such as dramas and entertainment that CJ can do well.” The wave, created in collaboration with the three terrestrial broadcasters and SK Telecom, is a trend to increase Kakao TV’s original content as an example of cooperation after SK Telecom exchanged a stake worth 300 billion won with Kakao in 2019. If the Amazon service starts through 11th Street, the’Amazon Prime Video’ service is also possible. Watcha joined hands with CJ CGV, the number one domestic operator in the offline movie industry last year, and in the second quarter of this year, Watcha is also paying attention to expansion of devices that can enjoy Watcha by installing it on Delive’s OTT box. An official from Watcha said, “We are not only expanding the lineup of contents such as movies, but also planning and producing original contents in earnest from this year.”

Ahn Jae-min, a researcher at NH Investment & Securities, said, “Netflix will be superior in that it has a variety of domestic and foreign IPs as well as its ability to mobilize funds.” It will be done,” he said.

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