Korean OTT platforms look to AI to fuel growth

[Courtesy of Ministry of Science and ICT]

Major players in South Korea’s over-the-top (OTT) streaming platform industry, including Content Wavve, Tving, Watcha, and Coupang Play, are emphasizing the need for sustainable business models while recognizing the global recognition of Korean content. In a recent interview with Maeil Business Newspaper, they highlighted the potential role of artificial intelligence (AI) as a new driver of growth in the OTT industry.

Lee Tae-hyun, CEO of Content Wavve, emphasized the essential role AI plays in OTT services, saying that the company’s ongoing research is focused on better applying and enhancing AI technology. He pointed out that AI plays a significant role not only in content recommendation and searches but also in content production. He acknowledged the substantial impact of Korean content globally but noted that Korean platform companies still fall short of global standards in terms of subscribers and capital, making direct competition with global or local OTT platforms challenging.

Choi Ju-hui, CEO of Tving, predicted that the use and influence of AI in the media market, content, and OTT industry would continue to grow as the industry undergoes a transformation. Tving is exploring various areas where AI technology can be applied, including creative processes and content operations. Choi recognized that Korean content’s appeal and creation capabilities have risen to the forefront of the global content market, but with intense competition and rising content costs in Korea, establishing a sustainable business model remains a significant challenge.

Watcha CEO Park Tae-hoon emphasized that the diversity of Korean OTT platforms as their strength, with each offering unique features and competing based on their distinctiveness. However, he cautioned against excessive competitive investments, which could negatively impact the financial stability of the local OTT industry and pose a threat to content production.

Kim Sung-han, CEO of Coupang Play, highlighted Korea’s world-class ecosystem for content creation, emphasizing the importance of storytelling in attracting customers.

The Korean OTT industry has been aggressively investing in original content production and subscriber acquisition, raising concerns about financial sustainability, with both Wavve and Tving reporting operating losses of around 120 billion won ($90 million) in 2022. Wavve has been expanding into overseas markets, particularly in the United States, following its acquisition of the K-content platform KOCOWA, while Tving aims to enhance content investment efficiency for sustainable growth.

Meanwhile, over 250 domestic and foreign OTT industry players participated in the International OTT Festival, South Korea’s first international market event that was held in Busan from October 7 to 9. During the event, seven major OTT companies presented their business directions in investment attraction showcases, while 22 Korean content producers and creators pitched their content proposals. About 36 billion won in investment interest was confirmed for nine highly rated content projects.