Updated: Sep 5
The online cinema service, also known as OTT (Over-The-Top) service, has become increasingly popular and widely used in Korea as a result of the increasing demand for smart devices. The people can use the service whenever they are free and wherever they are. Since they do not need to visit a movie theatre, they can also prevent themselves from being infected by the coronavirus. In the annual report of the Korean Film Council (KOFIC), it was mentioned that the OTT services generated the revenue from 54.1 billion won in 2018 to 71,8 billion in 2019. The services contribute to 77.2 percent of the country’s movie demand market.
One of the giant services in Korea, Netflix, reported that there were about 2 million subscribers in 2019. IGAWorks published that the average monthly users increased to 10.01 million in February 2021. However, according to the data from market researcher Nielsen Koreanclick, the active users were down to 8.24 million in March and to 8.08 million in April. Although the users have decreased, Netflix is still influencing the Korean OTT market. In April 2021, Netflix announced that the revenue increased double, compared to last year’s sale, 415.45 billion won (US$356 million). Netflix claimed they continuously invested US$ 15 billion in 2020 and will invest more in 2021 in the original content marketing to maintain the current users and attract the new users.
To compete with Netflix, the local OTT services such as Wavve, Season, Coupand Play, etc. have emerged in Korea. Wavver announced that the monthly active users (MAU) are more than 8.0 million in September, and they expect to reach the highest record, 3.88 million in the same period. The other local service named Coupang Play attracted 2.8 million subscribers in the second quarter of 2021.
Disney+, one of the global OTT services, set the starting date in South Korea as 12 November 2021. They committed to bring the wide range of Disney movie brands such as Disney, Marvel, Star Wars, National Geographic, Pixar, and Star including movies and shows produced by Disney Television Studios, FX Productions, 20th Century Studios, Searchlight Pictures and others. To outperform the main competitors in Korea, Disney+ set the subscription rate as KRW 9,900 ($8.51) per month or KRW 99,000 ($85.10) per year. It is cheaper than other movie streaming services in Korea.
So far, what we observe is those OTT services are competing each other. Then, are they helping each other to boost the market against the cinema market and current TV screen time?. Definitely, they are enjoying the COVID19 era now, but we may see a different signal when Disney plus lunches in Korea on November this year.