The 2020 OTT Landscape and Challenges for Korean Players

Below’s account is an analysis of the global OTT landscape, an introduction of Korean OTT players, the challenges they face, and an account to Korean production studios' views in selecting an OTT partner and going global. 

In recent years, we’ve seen the rise and fall of several over-the-top (OTT) players. According to a study by Allied Market Research, an estimated revenue of $332.52B is expected by 2025 and while American and European markets dominate much growth, Asia is expected to overtake by 2025. Netflix, Disney+ and China OTT players are the top 3 expected to take the lead, as HBO Max, Amazon Prime Video and Apple TV+ will closely chase the pack. Merger and acquisitions will also likely contribute to more OTT players with a diverse range of content offering, entering the market.

According to Nielsen Koreanclick’s research efforts, it is evident other than the few exceptions from Naver and Melon, global platforms are dominating the eyeballs of the Korean market today. Mr. Yoo Konshik, Executive Director at KBS Public Media Institute, stated at BCWW 2020’s “Strategic Analysis to 2020 Global OTT Market” that for Korean OTT platforms have to up their game in order to compete with these global players. 

So who are the key Korean players in the OTT space today and how have they worked to differentiate themselves in the already crowded Korean market? Taking reference from BCWW 2020’s panel discussion, “The Challenges of Korean OTT”, with Watcha CEO, Park Taehoon, CRO of Policy Planning at Contents Wavve Corp, Lee Heejoo and SK Broadband’s Head of Growth Strategy, Cho Youngshin, here’s a look at Korea’s OTT players, COVID-19’s impact on their business and growth plans in a nutshell. 

  1. Wavve Intro: Launched in September 2019. The result of a merger between POOQ, an OTT platform investment by terrestrial TV broadcasters, MBC, SBS and KBS, and Oksusu, owned by SK Broadband and SK Telecom. Refer to a previous post about the merger. The COVID-19 impact on them: An increase in registration during the COVID-19 period. Also raised investments to create more Wavve Originals.  Growth plans: More movies and international series expected in October. A slate of originals will continue in H2 2020 through 2021. Strengthening the classic category of variety shows and series will also be a continuous point of focus.  International expansion: Preparation for a South East Asian launch in early 2021. 

  2. Watcha Intro: Launched in January 2016. Started with Watchapedia in 2012 as an equivalent to IMDB, but for movies, series and books. Watchapedia also algorithmically recommends content based on user preferences on various platforms including Watcha.  The COVID-19 impact on them: Film markets’ attendance and sponsoring network parties were business effective in getting up to date with newly released content and meeting with film directors, producers and actors, but haven’t done so due to COVID-19 in 2020.  Growth plans: Changed their name from the more cumbersome “Watcha Play” to “Watcha”. Focus on content marketing for growth. More Watcha drama and film exclusives in H2, while testing formats.  International Expansion: Japan launch in September and South East Asia penetration planned for 2021. 

  3. Kakao TV Intro: Owned by Kakao and relaunched in Sep 2020. Digital short content platform, following an AVOD business model, thereby directly competing with YouTube.  The COVID-19 impact on them:  Positive as they seem to be off to an impressive start with more than 58M views on their short-form original content.  Growth plans & international expansion: Pioneering themselves as the short-form content OTT platform of choice, there will be more original short form content and vertical formats created to target the MZ generation already on Kakao Talk.  

In the case of International expansion, let’s also not forget fierce competition from other Asian players such as Viu, Catchplay, Line TV, and Chinese OTT platforms such as Tencent Video, iQiyi and Youku, to name a few. Fans of video consumption are certainly spoilt for choice with such a wide array of OTT platforms. The vast number of players also creates more economic viabilities and opportunities for local production studios. 

From the flip side, what are Korean producers’ considerations when selecting an OTT partner? Below is an account from Yoon Shin Ae, CEO of Studio 329, producer of Netflix Original, “Extracurricular”, and Chang Hyukjae, CEO for Company Sangsang, responsible for Netflix Original Variety shows, “Busted!” And “Twogether”, at a BCWW 2020 discussion, “Expansion of Korean Content in the Age of New Platforms”, moderated by Surh Jungmin, media reporter of culture desk of The Hankyoreh.

The key question throughout the panel was, "How to choose an OTT platform partner?” Much of the discussion was centered around YouTube and Netflix, due to their global standing and rising popularity in the Korean market. One factor considered is the platform’s strength in content offered. For Ms. Yoon, she mentioned, “YouTube is well known for K-pop and though they are shifting focus, it is clear they’re still strong in K-pop (and music). Netflix on the other hand, is more unique, has a diverse content offering with a growing library of originals. Hence, Netflix was eventually chosen as their partner for “Extracurricular”.”

The second consideration was the ease of platform usage. According to Ms. Yoon, while there was no major difference in the original content distribution, except Netflix was perceived as “easier to use” with it’s Korean user interface, compared to YouTube’s in English. When asked about their opinions on Korean OTT players facing global competition, both Ms. Yoon and Mr. Chang mentioned there isn't a real answer, but targeting might lead to a differentiation. Mr. Chang reckon catching onto global trends and localization are important in Korean content’s success internationally.  In the case of “Twogether”, he was clear about targeting global viewers on Netflix from the start, hence crafted storylines to suit these viewers’ tastes. To sum up, for production studios, it is essential to keep their stories authentic and spend increased efforts nurturing the production crew, creating a suitable environment to keep the flow of unique stories. 

How will Korean OTT players perform in the global market from hereon? Will the Koreans’ sense of patriotism help local OTT players through the tough global competition? Who will emerge victorious? 

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