Netflix, TVING and other popular over-the-top (OTT) video streaming services in Korea have increased subscription fees by an average of about 40 percent over the past six months, as the companies are striving to improve the bottom line despite consumer complaints of financial burdens.
According to the state-run Korea Creative Content Agency (KOCCA), 55.2 percent of the country’s 52 million population subscribed to paid video streaming services as of December 2023. With the market saturating and businesses finding it increasingly difficult to expand their subscriber base, they are turning to improving profitability by raising rates, observers say.
Rate hikes began in earnest in 2023. YouTube, which has about 46.6 million monthly active users (MAUs), increased the premium membership price to 14,900 won ($10.87) in December, up 42 percent from 10,450 won. The premium service provides users with ad-free access to music and video content across the platform. While YouTube does not disclose the number of its premium service subscribers, app market analysts estimate at least some 4 million Koreans are subscribing to YouTube's premium service.
Last Friday, TVING, operated by the entertainment wing of Korea's food and entertainment giant CJ Group, increased the annual subscription fee for its basic plan to 114,000 won, up 20 percent from the previous price of 94,800 won. The hike followed a 20-percent increase in monthly subscription fees in October 2023.
Coupang, Korea's top e-commerce operator, said on April 12 that the company will increase the price of its premium membership by 60 percent from 4,990 won to 7,890 won in August. The premium membership offers Coupang Play, the video streaming service of Coupang, and early morning and overnight delivery services for selected products. Coupang's premium service users can also receive benefits and coupons for the company's food delivery service Coupang Eats.
Netflix, the world's largest video streaming platform, also stopped users from selecting the basic plan, which cost 9,500 won, in December 2023, virtually forcing consumers to choose more expensive subscription plans costing more than 13,500 won. Netflix also started regulating the number of people accessing its service via a single paid account in November to have more viewers subscribe to its plans.
The U.S. firm pioneered Korea's OTT market when it started its service here in January 2016. According to app market analyst firm Wiseapp, Netflix is the biggest OTT operator in Korea with some 12.3 million MAUs and a market share of about 39 percent, as of February 2024.
OTT services are operated based on internet video-on-demand (VOD) platforms that receive monthly subscription fees for unlimited video content such as dramas, films, and live sports events. The global video streaming market was estimated at $554.3 billion in 2023 and predicted to reach $2,486.5 billion by 2032, according to global market analyst Fortune Business Insights.
According to KOCCA data, Korean consumers use an average of 1.8 paid OTT plans and spend an average of 12,005 won every month. They feel that an adequate fee for a monthly video streaming service is 7,006 won.
reporter
Park Sae-jin
swatchsjp@ajunews.com
