As streaming services battle, they want Elsa on their side
Any 5-year-old can tell you why all major Korean mobile companies are scrambling to partner with Disney to stream Disney Plus: "Frozen."
If that's not enough, the service has 8,000 other titles, some of which are classics of the big screen or small — from "The Simpsons" to "Star Wars" — that any competitive internet company needs to have on its side.
It’s been less than a year since Disney Plus was first introduced in the global market. By the second quarter, the service had 60.5 million subscribers.
SK Telecom, LG U+ and KT have been vying to work with the Burbank, California-based company to bring Disney Plus to Korea. The stakes are high, and each has its own motivation to get a deal done.
SK Telecom, which is the only of the three that did not partner with Netflix, is in need of a win and has been actively and enthusiastically participating in negotiations. LG U+ has been offering the most favorable conditions, while KT, the largest in the domestic paid TV market, needs to ink a deal if it is to guarantee its lead.
Disney Plus has not chosen a partner and has not even indicated whether it will just choose one or whether it will supply programming to all three.
Netflix weighs heavy on negotiations. The streaming service, which has 192 million subscribers worldwide, entered the market four years ago and has dominated it.
Since LG U+ teamed up with Netflix in 2018, its paid subscriber numbers are up 12 percent. After losing customers to LG U+ following the availability of Netflix, KT signed with the Los Gatos, California-based streaming leader.
Disney Plus is expected to out-Netflix Netflix and become the dominant streaming service in the Korean market.
It has access to the libraries of Walt Disney Company, Pixar Animation Studios, Marvel Studios, 21st Century Fox and National Geographic, and 47 of the top 100 top-grossing U.S. films of all time, such as the “Avengers” series, “Avatar” and “Titanic.”
The Disney Plus basic plan in the United States is set at $6.99 monthly and $69.9 yearly. It is cheaper than Netflix, which costs about $12.99 monthly.
Facing these powerful companies from overseas, the Korean government has suggested domestic players combine forces and establish a single platform instead of competing against one another.
Korea Communications Commission (KCC) Chairman Han Sang-hyuk last month sat down with representatives of four local platforms — Watcha, Wavve, CJ ENM’s Tving and KT’s Seezn — urging cooperation.
During the meeting, Han emphasized that with foreign platforms establishing a strong presence in the domestic market, "cooperation among local companies is strongly needed.”
The domestic companies showed little interest, and academics say that a unified front is probably the wrong approach.
Even if they cooperate, it doesn't mean they can beat the likes of Netflix and Disney Plus, Professor Cho Myeong-hyeon, who teaches business at Korea University, said. The government should allow mergers and acquisitions to happen naturally while supporting the local companies with tax benefits or direct financial assistance, the professor added.
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