Korean media struggles to keep up with Netflix spending heavily to sweep Korean contents

[Photo by Han Joo-hyung]

South Korean streaming services are calling for fair and lighter regulations for OTT platforms as they struggle to keep pace with multinational behemoths like Netflix that are spending massively to ramp up original contents and customer base.

According to a study by Maeil Business Newspaper on Wednesday, Netflix in 2020 spent 18 trillion won ($13.6 billion) on contents development and production, towering over 1.6 trillion won spent by terrestrial broadcasters KBS, MBC, and SBS and CJ ENM with a number of cable channels and streaming platform Tving.

The spending gap would have widened as contents and streaming market turned bigger during pandemic period.

The global success of Netflix-backed ¡°Squid Game¡± has sharply raised production cost for Korean contents, worsening the profitability of local media producers and broadcasters.

According to data from Korea Communications Commission, KBS, MBC, and SBS¡¯s combined investment in contents came to 969.8 billion won in 2020, dropping by 10.5 percent from the previous year. Spending on contents fell under 1 trillion won for the first time since 2017.

CJ ENM¡¯s Tving upped investment from 600 billion won in 2020 to 800 billion won last year but has continued to face difficulty in upgrading licenses as Netflix has been scooping up promising contents since its mega-success with Squid Game.

To survive in the titled playing field, rivals SK broadband, KT, LG Uplus, and other internet protocol television (IPTV) companies have established a joint fund worth 300 billion won for content production.

The government has not helped matters as it continues to apply regulations regarding user fees and TV listings only on domestic streaming services.

The Korea Communications Commission finally held a meeting in April, promising to carry out a more in-depth analysis of OTT platforms in response to the changing market.

While domestic television networks and content services welcome the move to make the regulations apply to foreign streaming services as well, they are calling for an eventual lifting of regulations.

[¨Ï Maeil Business Newspaper & mk.co.kr, All rights reserved]