Netflix relying on ‘Okja’ to boost salesWith the release of the movie “Okja,” directed by Bong Joon-ho, U.S. video streaming giant Netflix hopes to stand out in the Korean market it has been struggling to gain ground in.
Netflix has been investing in creating more Korean content, a similar strategy to the one it used when entering the French market where media restrictions are especially tough and foreign companies often struggle due to the strong national identity. In France, Netflix released a political drama series “Marseille” in May last year. The series was written, directed and cast in France.
The streaming giant has been announcing a series of plans to produce Korean-origin content. In January, it announced a plan to turn popular Korean web cartoon “Love Alarm” into a 12-episode drama series. In March, it announced another plan to produce an eight-episode drama dubbed “Kingdom,” written by Kim Eun-hee of “Signal” and directed by Kim Sung-hoon of “Tunnel.”
According to Netflix, it will invest $6 billion this year in content production, the bulk of which will be spent on producing 400 original productions in different countries including in Korea.
“One of the key countries for us is actually Korea,” said Jessica Lee, vice president of communications at Netflix’s Asia Pacific business at a press briefing Thursday. “Korea has great content creators and you will be seeing a lot of content coming online.”
However, there are remaining doubts on whether the Korean-origin content and simultaneous release of movies online and in theaters - like with “Okja” - will result in a favorable business environment for Netflix.
“Revolution by over-the-top industry players is not easy [in Korea] because the price of paid media services is very low,” said Kwak Dong-gyun, a researcher at Korea Information Society Development Institute in a report last week. “There needs to be a policy for subscribers to pay the right amount of money so profit return can be guaranteed to content providers.”
Over-the-top is a term used for the delivery of film and TV content via the internet without requiring users to subscribe to a traditional cable or satellite service.
While Korean consumers are very active online and on mobile devices, they still tend to look for free content. Even for “Okja”, released Thursday, an illegally copied version of the film has already been reported online.
Local industry players also worry that the fast-growing OTT market can end up being dominated by foreign players like Netflix, YouTube and Facebook.
According to data from market researcher DMC Media in April, 42.8 percent of the 1,000 consumers it surveyed said they use YouTube to watch video on their mobile device while 15.4 percent used Naver TV. The result was followed by Facebook at 9.1 percent, Oksusu at 8.0 percent and KakaoTV at 4.6 percent.
In Korea, the paid video streaming service most similar to Netflix is Oksusu, operated by SK Broadband, an affiliate of SK Telecom. This year, the company invested 5 billion won ($4.4 million) to create original content in partnership with local broadcasting companies, a very small sum compared to Netflix’s investment.
“We can’t abandon the service, because we see that the OTT market is rapidly growing, however for the time being local players don’t stand a chance against foreign giants,” said a spokesperson from SK Broadband. “But we will keep increasing investment to gain ground.”
BY KIM JEE-HEE [firstname.lastname@example.org]