South Korea
Co-authored by Amanda D. Lotz and Jennifer Kang
Updated December 2022
Market brief
Given its reputation as an advanced technological market, South Korea (hereafter Korea) has been slow to adopt streaming services. This owes largely to the uncommonly high levels of pay-TV adoption (98 percent; cable that transitioned to IPTV) that has so strongly satisfied the market that it lags many in adoption of US-based services and has an under-developed and unusual marketplace of domestic services as well. Despite many uncommon features, Korea may suggest alternative models for the sector more broadly.
Korea features a handful of single-territory services. The major domestic SVOD services are Wavve, TVING, Watcha, and Coupang Play. Wavve is joint effort among multiple major Korean industry heavyweights, and Coupang Play is aligned with the Coupang e-commerce site and offers video as added value more than intentionally competing in the sector. Wavve has been the largest domestic SVOD service after Netflix, but TVING surpassed Wavve in September 2022.
Wavve is a joint venture between mobile carrier SKT (SK Telecom) and the three major terrestrial broadcasters (KBS, SBS, and MBC). It launched in 2019 when SKT’s platform Oksusu and the broadcasters’ platform POOQ merged. SKT is the major shareholder at 36 percent, and the broadcasters each hold 21 percent. Wavve’s strength is in offering popular broadcast content, and it has exclusive agreements with global services like HBO and Amazon Prime. Its original content is mostly entertainment, especially reality shows and a few drama series. Wavve established Studio Wavve in 2022 and plans to ramp up their original content production. The platform operates as mixture of SVOD, TVOD, and live streaming advertising.
TVING started as a joint venture between entertainment conglomerate CJ ENM and media company JTBC (Joongang Tongyang Broadcasting Company) in 2020; and the portal site Naver joined in 2021. TVING announced acquisition of KT Corporation (Korea Telecom)’s platform Seezen in July 2022, which made it the largest domestic streaming service, surpassing Wavve. The major shareholders are CJ ENM (41 percent), SLL (27 percent; owned by JTBC), and KT Studio Genie (11 percent). TVING is known for original content different from broadcast, like its sci-fi and thriller series (Yonder, Island). It has a partnership with Paramount, so TVING subscribers can access Paramount+ on the platform. TVING plans to launch services in Taiwan and Japan. TVING’s funding comes from a mix of SVOD, TVOD, and live streaming advertisements.
WatchaPlay launched in August 2012 and became Korea’s favorite movie review app, and streaming service. Watcha evolved from the personalized recommendation technology in 2016; both are owned by Frograms, a start-up. Watcha is the only SVOD service that runs on a subscription-only business model. It established a presence in the Korean market as a start-up platform specializing in indie and art films. It has since moved away to a more expansive library of domestic and global content. The platform also hosts original content and has a small but loyal fanbase around their original series (Semantic Error, Damn Good Company). Watcha is also available in Japan. Watcha has been struggling financially and the company put up their shares for sale in July 2022 but has not found a buyer yet.
SVOD services accounted for 13 percent of total streaming minutes in Q2 2021. Korea was reported to have nearly 15 million subscribers in Q1 2022. The MAU (monthly active users) for Sept. 2022 is reported to be led by Netflix (11.58 million), followed by TVING (4.18 million), and Wavve (4.13 million). SVODs grew during the pandemic, but the growth of SVOD subscribers slowed in Q1 2022. The domestic SVODs are consolidating (TVING and Seezen) and downsizing (Watcha) to survive. They are also expanding globally to gather more subscribers, as the domestic market size alone is too small for their survival.
Relative to other services, the Korean services feature much larger libraries – more than 8,000 titles for Wavve and more than 10,000 for Watcha – when the typical Netflix library of 5,000 titles is often the largest in most markets. Unlike what has been the norm among SVOD services of a flat license fee, the Korean services have used a blend of lower upfront, guaranteed payments paired with revenue based on viewing. The TVOD offered by the domestic services is also notable. There is greater acceptance of micropayments for on-demand access titles; this is similar to Apple or Amazon’s sell-through but was established pre-streaming as part of IPTV practice and the TVOD fees are frictionlessly added to service bills. While both practices are unusual relative to pervasive Western norms, there is nothing “normal” about those norms. Alternative approaches to licensing have emerged in other markets (see Israel) and may be crucial to sustainability of a greater number of services in the long run.
Notably, domestic content dominates the SVOD market. Korean dramas accounted for 48 percent of viewing time and variety and reality shows 23 percent. Also, Koreans are starting to use SVOD services for other types of content, such as sports (e.g., Coupang Play live streaming Korean footballer Heung-min Son’s Premier League games) and concerts (e.g., TVING’s live stream of Young-woong Lim’s concert).
The concern over IP ownership is another thing to note for the Korean market. The celebration over Squid Game’s global success soon turned into conversations about Korean creators not getting sufficient compensation from global platforms like Netflix. The drama Extraordinary Attorney Woo was seen as an exemplary case of retaining IP rights. The production company rejected Netflix’s offer to make it into an original series and instead sold the overseas distribution rights to secure the IP. There is speculation that this will be a trend for Korean creators (TVING’s Yonder will be streamed internationally via Paramount+), but it is too soon to tell, given that global platforms usually offer higher production budgets than the domestic SVODs.
