South Korea’s three major broadcasters KBS, MBC and SBS have joined forces with the country’s leading telecom firm, SK Telecom, to launch a new video streaming platform. The move is regarded as a defensive reaction against the growing influence of foreign competitors, lead by Netflix.
The broadcasters already jointly own Pooq, with MBC and SBS holding 40% each, and KBS the remaining 20%. The platform claims some 3.7 million subscribers. SK Broadband currently operates Oksusu, the country’s largest video streaming service, with some 9.5 million subscribers.
Netflix, which does not disclose a breakdown of subscriber numbers, is estimated to have far fewer subscribers than either Pooq or Oksusu. Also, according to app usage research service WiseApp, Android users in South Korea spend a total of 283 million minutes a month, as of September 2018, watching Netflix. Both Pooq and Oksusu users were known to have spent some 600 million minutes over the same period.
But the same data shows Netflix to be gaining share very rapidly. For 2016, Korean users watched only 20 million hours per month. And while Netflix has exhibited 20-fold growth since then, viewership of Pooq and Oksusu has only doubled. Amazon Prime Video was launched in Korea in 2016, but has had only a small impact to date.
Netflix is also competing strongly for talent and content. While the Korean platforms have rarely scored with their original content efforts, Netflix has launched successful originals including Bong Joon-ho’s “Okja” feature movie, and variety shows that involved major Korean talent and their agencies.
The new platform seeks to remedy that deficit and to compete for audiences in places where Korean content is already successful. With SK’s financial might, the new platform will benefit from an original content budget of $8.9 million (KRW10 billion). It may also make use of Pooq’s business relationships in the Asian region, notably with China’s iQIYI, Hong Kong’s Viu, and Malaysia’s iflix.
At a launch ceremony, Park Jung-ho, president and CEO of SK Telecom, said the new service would be launched in Southeast Asia later this year.