One of the distinguishing features of Korean culture is the ‘Bbalee Bbalee’ culture, which translates to ‘fast and faster’ culture. Korea is believed to have the fastest and easiest accessible internet systems in the world.
Korea is known to have a robust IT Infrastructure facilitated by the population density in large cities. Close to 50% of the population lives in the Seoul Metropolitan area which makes free, high-speed Wi-Fi easier to deliver than in other countries.
Most cafés and restaurants have free Wi-Fi and all mobile phone companies provide free Wi-Fi in subways. While the internet is essential to everyone, the dominant mode of access is shifting from computers to mobile devices. As a result, the penetration rate for computers per household is actually decreasing.
Source: Korea Communications Commission
Korea boasted the fastest internet speed over 13 quarters until 2017. In 2019, Korea's internet speed ranked 30th. As the 3rd generation and 4th generation communication networks were established in Korea before most countries, as time passed, other countries installed more advanced technology-based communication networks providing faster internet and edged ahead of Korea. However, Korea was the first to commercialize high-quality 5th generation communication network so it is likely to recover first-rank status again soon.
Source: Compiled by IRC Consulting
As the speed of internet increased, it created an ecosystem for the growth of online streaming. As there are no location and time restrictions to online streaming creates more demand for its content. The Z generation, which is comfortable with digital environment with the growing content to choose from also contributes to the demand.
As much as the demand for online streaming content is growing, the supply is also increasing. Not only is it becoming simple to create and distribute contents, it is also easier to penetrate the market as the number of streaming platforms increases. Moreover, as all platforms are internet based, there is no longer any distinction between domestic and international content.
After MP3 players were introduced and replaced most of portable music devices, the music industry discovered new emerging problems. Initial issues were the decrease in CD sales and poor returns on massive investments in music albums. One solution to this problem was to create a ‘Digital Single Album’ which contains a single digitalized mp3 file song. However, digital single albums did not solve the core issue which was free uploads that violated copyright. The music industry had to make major changes to overcome these new developments. These problems encouraged the music industry to take advantage of streaming, which turned out to be a great success. Compared to videos, live media sound data files are smaller and much easier to stream. Live streaming solved most of the issues that were plaguing the music industry but also changed the consumers. After moving on to streaming, consumers did not have to wait in line or stay over-night in front of a store to be the first to listen to a new album. Moreover, the Golden Disk Award (Korean Music Award) changed its evaluation ratings from ‘album sales’ to ‘music streamed.’
There are currently three main music stream services Melon, Bugs Music and Genie Music. Melon is the number one music service provider and has services connected with other favorite contents like Kakaotalk and they offer a discount for SKT telecom mobile services. Bugs Music, the oldest of the three has the most albums.
Over the Top (OTT) video streaming was first introduced to the public in 1999 by ‘Hananet’ and ‘DreamX,’ but due to the slow streaming speed and poor quality, it did not take off. As transmission speeds began to grow, it was possible to provide video streaming with speed and quality. In 2016, a survey by a mobile app ‘CashSide’ revealed that out of 1,173 viewers about 75% watched two or more videos every day and within the 75%, 34.4% watched 2~3 videos, 21.8% watched 4~5 and 18.4% watched over 10. Youtube has the largest streaming market in Korea but other Korean platforms are growing and challenging Youtube to become number one.
The freedom to choose content and time that suits the viewer is one of the most significant advantages of the streaming media. Also, the consumption pattern and media trends for streaming consumers are changing and they now enjoy ‘Snack Culture’, contents which are short and natural like a snack. As internet streaming grows, television viewing is decreasing. Some elementary school students do not know famous movie stars or past presidents but remember all the favorite live streamers.
l Web/Portal Based Streaming
1. Afreeca TV: Afreeca TV is the domestic leader in live broadcast streaming. As a broadcasting system, it requires an open chat room where the viewers have instant interaction with the Streamer (also known as Broadcasting Jockey in Korea). Similar to Twitch, Afreeca TV has a donation system to ‘shoot stars’ to the streamer you would like to support which, along with advertising is a revenue source.
2. Naver (TV cast): Naver is the number one Korean portal website that gives it a strong brand image, interaction and connections. Naver started developing the streaming platform in 2015 with highlights from sports events such as baseball, soccer and other sports. Naver expanded into three types of platforms. The first is ‘TV cast’ which focuses on sports highlights, e-sports and comedy. The second is ‘Playleague’, a subcategory of TV cast but based on user content. The third is ‘V app’ which is a platform for celebrity live broadcasting. V app is a mobile-based platform essential for fans of K-pop or K-culture.
3. Kakao TV: Kakao is one of the most popular mobile messenger apps in Korea, similar to ‘Whatsapp’ in the U.S. Daum TV was the name of the initial platform but after the merger of Kakao and Daum it was changed to Kakao TV because of the brand power. Kakao TV focuses on videos and live internet broadcasting allied with new major broadcasting companies. The most significant advantage is that consumers can simply and directly share media through their messenger platform.
l OTT/VOD Based Streaming
1. Whatcha: Whatcha is similar to Netflix but is a startup company that provides service at a lower monthly cost. Like Netflix, Whatcha creates a recommendation algorithm for users based on viewing patterns.
2. Tving & Pooq: Tving and Pooq are both known for their content businesses. Tving provides contents from CJ E&M, which is running the largest K-culture businesses such as tvN & Mnet dramas, music videos, movies, comedy and other types of shows. Pooq is a joint investment by all the terrestrial broadcasting companies.
3. Mobile Carrier Streaming: One of the best ways for users to consume more mobile packet (data) is large video media, which accounts for a significant portion of data. Therefore, to encourage data usage, all three major mobile carriers (SKT, KT, LGU+) have been developing new and exciting platforms. With the penetration of smartphones, the mobile carrier streaming industry is proliferating.
A. LGU+ started in May of 2015 with a business platform and held the higher ground compared to the other two companies with the most contents.
B. SKT started after LGU+ with live TV, VOD, video clips, sports and movie contents with a platform named Oksusu.
C. KT started most recently in 2016 with ‘Dovido.’ Dovido is a compound word of do+video+do, which can shoot, edit, upload and make videos on one platform.
l Social media
Until recently, the most popular social media was Facebook but this has changed. A ‘Report on Social Media and Search Portals in 2018’ by Open Survey stated that compared to the previous year the users of Youtube as a social media had significantly increased becoming the most used followed by Instagram, Facebook and Naver post/blog.
Opportunities and Risks
The online streaming industry has also shown potential for growth in other industries. As online streaming of music has increased the demand of complimentary products such as AI speakers, content media streaming can generate interest in domestic products and Korea itself.
There are great risks as well as major distributors such as Netflix and Spotify can dominate the market while suppressing and controlling contents. There is also conflict with existing media. In the past, movie theaters and TV shows enjoyed a time buffer before it was released online. However, Netflix is releasing movies at the same time as theaters which might destroy the existing markets. Lastly, regulations regarding Korean media are strict compared to other global leaders. This will open the door for overseas media development while the domestic contents will have to contend with regulations and standards which are not a problem elsewhere.
Korea has high internet speed, wide adaptation of smartphones and many early adopters. Developments are ongoing even as we speak. In the subways, everyone has their face buried in their smartphones watching something. Live streaming is becoming a part of everyone’s life.
With Covid19 spreading, social distancing turning mainstream, usage of online streaming increased. Untact (a term created to emphasize absence of contact) activities are growing and online streaming contribute a major part into it. Instead of meeting someone or going out for a drink, people tend to stay home and watch movies, dramas, or other streamers contents. The growth of online streaming was already significant but with Covid19 working as a catalyst, the sky is the limit.