Global streaming wars put Korean competitors in a tough spot

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Global streaming wars put Korean competitors in a tough spot

Disney+ holds a media day ahead of its introduction to Korea in October 2021. [DISNEY+]

Disney+ holds a media day ahead of its introduction to Korea in October 2021. [DISNEY+]

 
Global streaming services are slashing their subscription fees to keep increasingly restless customers hooked, putting the local competitors in a tough spot as they are money losing and will have a difficult time following the lead on pricing.  
 
After years of frenetic growth, the pace of subscriber number increases has slowed to a crawl.
 
According to data released by ConsumerInsight on Monday, 61 percent of the respondents in Korea said they used paid streaming services in the first half. This is only a 2 percentage point increase from the latter half of 2021.
 
As in much of the world, viewers are tuning out as the pandemic winds down and as inflation and recession fears lead to a tightening of budgets.
In the ConsumerInsight survey, 37 percent of the respondents said they used Netflix, YouTube Premium 16 percent, Tving 12 percent, Wavve 11 percent, Coupang Play 9 percent, Disney+ 8 percent and Watcha 4 percent.
 
Netflix customers' satisfaction dropped 2 percentage points, from 60 percent to 58 percent, while consumer satisfaction for Disney+ dropped 11 percentage points from 70 to 59.  
 
YouTube Premium was the only streaming service for which an increase in satisfaction was reported.
 
Customer satisfaction with Disney+'s subscription fee halved to 36 percent from 72 percent.
 
To retain its subscribers, the company held a discount promotion from Aug. 8 to 20 celebrating Disney+ Day. The plan was discounted by 75 percent from the monthly 9,900 won ($6.9) to 2,500 won. The effect was immediate and lasts one month.  
 
The company is running the promotion together with local phone companies.  
 
On the first day of the promotion, the number of users who newly downloaded the application rose by over four-fold to 22,949, according to MobileIndex.  
 
Netflix, which lost nearly one million subscribers globally in the first half, announced the introduction of a new lower-priced, advertising-supported subscription tier that will cost around $7 to $9 dollars a month. The new plan, which will be available in November, is cheaper than the current cheapest plan, which costs $9.99.
 
In Korea, Netflix charges 9,500 won.  
 
The company expects that around 18 percent of the current subscribers, which would be 40 million of the 220 million total, will choose this new plan by the third quarter of next year.  
 
 Logos of local streaming services [JOONGANG PHOTO]

Logos of local streaming services [JOONGANG PHOTO]

 
Domestic streaming services are unlikely to create cheaper subscription plans as they already offer discounted subscriptions in collaboration with IPTV services and telecommunication companies.
 
Their normal rates are already relatively cheap, with Watcha charging 7,900 won, Wavve 9,300 won and Coupang Play 4,990.
 
As they are all losing money, they have little room to maneuver.
 
"Competition between domestic streaming services has been overheated, so additional discounts will be difficult in order to maintain the business," said a spokesperson for a streaming service.
 
Some say local streaming services should compete with global services in terms of content quality as it is hard to compete in terms of subscription numbers.  
 
"Even though customer satisfaction dropped, global platforms were able to attract users and overcome the declining satisfaction with content quality and quantity," said Park Kyung-hee, director at ConsumerInsight.
 
"Domestic streaming services should work harder on content competitiveness while maintaining the current price competitiveness."
 
 
 

BY PARK KUN, CHO JUNG-WOO [cho.jungwoo1@joongang.co.kr]
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