Streaming

Korea may have been a late entrant into the streaming race, but its leading broadcasters and entertainment companies are already challenging the global giants, powered by their country’s techcentric economy and tech-savvy consumers. Juliana Koranteng reports

Original Wavve show Lie Of Lies

KOREA’S OTT PLATFORMS Homemade in Korea

KOREAN streaming-TV platforms’ relative late start in 2018 (compared to Netfl ix’s 2007 launch) has not stopped them from making a massive impact on both the local and international market. Korea’s lucrative local pay-TV market still fl ourishes. However, the country’s streaming operations, led by Wavve, Tving and Seezn, want to go big both at home and abroad with nothing less than the most engaging original and acquired content. “Korean consumers watch videos on various devices, such as PC, mobile and tablet. Watching videos on mobile phones is also steadily increasing,” says Wavve CEO Lee Tae-hyun. “According to a recent report by a domestic research agency, the proportion of video-usage time was ranked fi rst on mobile, accounting for 20% of the total — an increase of three percentage points from last year.”

Watching videos on mobile is steadily increasing. According to a recent report, the proportion of video-usage time was ranked fi rst on mobile, accounting for 20% of the total

Lee Tae-hyun

Streaming rival Tving, a subsidiary of Korean broadcast and entertainment behemoth CJ ENM, which has signifi cant interests in K-drama and K-pop, says its strategy is infl uenced by Koreans’ entrenched multi-device viewing habits.

“Korean audiences are early adopters of new technologies and innovative services,” Tving’s director of strategy and partnership, Cho Young, says. “Our data shows that more than 80% of consumers use multiple devices when they watch content from Tving. It’s critical for us to provide seamless multi-device experiences. Consumers also quickly embraced the idea of OTT VOD because they can watch their favourite content anywhere, anytime, on any device. Even at home, 70% of our users watch our content using their personal devices, not the TVs in the living room.”

In a severely competitive sector that research organisation Korea Communications Service says was worth 634.5bn South Korean won ($544.9m) last year (up from 306.9bn South Korean Won in 2016), Wavve is the domestic market leader. Targeting both the national and international markets, the platform was launched last year by Content Wavve, a joint venture between state-owned broadcasters MBC and KBS, commercial TV giant SBS and telecommunications conglomerate SK Telecom. It was created from amalgamating two existing services: Oksusu (a platform belonging to SK Telecom) and POOQ (an MBC, KBS and SBS joint venture), which had a combined total of 14 million subscribers. SK Telecom, the biggest single shareholder in Wavve with a 30% stake, is responsible for the business operations and chasing the required investments. The three broadcasters, commanding an estimated 23.3% each, supply content from their portfolios and co-produce originals with Wavve. According to recent figures from Nielsen Koreanclick, Wavve recorded 3.46 million monthly active users in May. Almost a decade old, CJ ENM subsidiary Tving offers a hybrid model that combines live channels and an SVOD service. It is scheduled to be revamped this year via a joint venture with broadcaster JTBC Worldwide. Nielsen Koreanclick reported that Tving had 2.54 million monthly active users in May — a figure that has almost doubled in about a year. Meanwhile, Seezn is owned and operated by

Crash Landing On You, one of Tving’s highest rated shows

another telecommunications goliath, KT Corporation. The platform is AI-powered to help subscribers personalise the service and discover relevant shows based on digitally driven recommendations. Seezn, which replaces KT’s IPTV mobile platform Olleh TV, is designed to be compatible with the emerging ultra-fast 5G technology. Nielsen Koreanclick calculated that Seezn had seen its number of monthly active users grow to 2.36 million in May.

As it is targeting a general-entertainment audience, Wavve’s unique selling point is its access to premium content from the powerful production divisions of its three key shareholders, MBC, SBS and KBS. It has pledged to invest 300bn South Korean won in original content alone by 2023, starting with 60bn South Korean won this year. The current flagship original show is SF8, an anthology of sci-fi dramas by eight of the country’s top film directors. “The topics [tackled in SF8] are about the society the future might throw at us and the issues, such as AI, AR, robots, games and disasters, are realistically captured,” Wavve’s Lee says. Other original Wavve shows include Zombie Detective, Lie Of Lies, My Dangerous Wife and Alice. “Alice recorded the highest viewership rate of 10.6%, overwhelmingly taking first place among the mini-series on at that time,” Lee adds. Among Wavve’s strengths is the ability to air live shows while offering new and established on-demand hits from its shareholding broadcasters. Lee points out that Netflix, which is also more expensive, will be offering only VOD shows. “Wavve is exerting a positive influence on the Korean media ecosystem as it is actively making large-scale investments to build its own line-up of original content,” says Jung HongDae, head of media strategies in MBC’s media planning department. Jung also points out that MBC will be drawing on the experience it gained from operating POOQ, the streaming platform launched in 2012 before it was

melded into Wavve. “In the long run we, as a shareholder, expect Wavve to expand MBC’s reach to younger viewers and strengthen our strategic partnerships with other shareholders, while increasing profits and share value,” Jung adds.

Wavve is exerting a positive influence on the Korean media ecosystem as it is actively making largescale investments to build its own line-up of original content

Jung Hong-Dae

For Tving, founding company CJ ENM plans to ride on the popularity of its existing K-drama and K-pop music productions. Future plans include working with new partner broadcaster JTBC to add original productions and international fare. “We focus on the preferences of our target audience of young female millennials and Gen-Z youth, who seek unique, exciting and new types of entertainment,” Tving’s Cho says. “Our content portfolio has been mainly composed of library shows and K-content, specifically dramas and entertainment shows that have already aired on TV channels. But we are planning to announce our first original shows very soon, as well as extend our line-up with exclusively licensed international content.” Netflix has brought the might of its well-funded quality international movies and shows to Korea. It is also going local by licensing Korean-language shows and forming co-production partnerships. Studio Dragon, a CJ ENM scripted-production subsidiary, entered into a multi-year production and distribution agreement with Netflix in November last year. Another international giant involved in the Korean streaming domain is NBCUniversal (NBCU). The Hollywood studio has signed a memorandum of understanding (MOU) to license K-content from Content Wavve and its broadcaster shareholders for NBCU’s US and overseas broadcast and streaming channels.

If there is one country able to illustrate how new technology is likely to impact on future viewing experiences it is Korea. In addition to offering futuristic shows such as the SF8 sci-fi dramas, Wavve encourages interactive viewing via its personalised discovery service. “Shows are recommended by looking at the audience’s viewing history and individual viewing characteristics,” Lee says, adding that this personalisation technology is now being used to develop other advanced services. The country’s telecommunications groups’ hefty investment in ultra-fast high-speed 5G connectivity is equally expected to enhance the introduction of VR, AR and AI-powered on-screen experiences via streaming platforms. “The one certain thing is that many IPTV and OTT players in Korea will continue to upgrade their personalisation services,” MBC’s Jung adds. When the CJ ENM and JTBC merger in Tving is completed, the platform intends to boost the amount of data-driven personalised content on offer. Additionally, Tving plans to exploit the personalisation infrastructure to deliver what it calls Dynamic Ad Insertion. “When we offer advertisements for the free users watching live linear channels via Tving, we use a technology called Dynamic Ad Insertion,” Cho says. “In live streaming, we can replace original TV advertisements with our own, whereby we personalise ads based on users’ interests and viewing history.” The question industry observers are asking is whether Korea can support the growing number of competitors entering its local streaming sector. Many believe there are more consolidations to come. UK-based tech, media and telco analyst Paolo Pescatore of PP Foresight predicts Netflix’s presence will hasten all forms of alliances — including many with Netflix itself. “No local broadcaster or domestic video service is immune to the challenges of taking on the online giant,” he says. “Many local domestic players should do what they do best — produce the next blockbuster and rely on working closely with Netflix on production and distribution.” Standing out as a brand will become imperative, as Tving’s Cho points out: “We are competing against very strong players to earn consumers’ love and trust. That is why we use multiple layers of data sets to increase our targeting accuracy. This sophisticated targeting capability not only engages more viewers, but also gives better results to advertisers.”

We are competing against very strong players to earn consumers’ love and trust

Young Cho

GLOBAL RIVALS

NETFLIX, the world’s biggest streaming platform by both number of subscribers and investment in content, is already making waves in Korea. It entered the market in 2016, before forming an alliance in 2018 with LG U+, one of Korea’s multinational telecoms conglomerates. This gave Netflix access to LG U+’s fourmillion-plus streaming TV subscribers. Following a similar deal this year with LG U+ rival KT Corp, which has more than seven million TV customers, Netflix looks set to be a key player in Korea. Korean media coverage of a report by the Korean Film Council indicates other major international SVOD services, including Disney+ and Apple TV+ and YouTube’s advertising-funded VOD platform, are vying for a space in the increasingly competitive Korean streaming landscape.