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Domestic Content Businesses Towards Over The Top
Nam Hye Bin  |
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승인 2019.10.30  14:20:43
트위터 페이스북 미투데이 요즘 네이버 구글 msn

Despite the penchant of people being sensitive to changes, the winds of change is blowing in the media world in Korea. As people pursue a ubiquitous media environment, online streaming services have been becoming a big trend. However, since the trend seems to be facing some hardships, it is time to pave open ways for the success of the online streaming service and the creation of prosperous media world in Korea.


Over The Top (OTT) is an online streaming service wherein people watch various videos. The representative businesses of OTT are YouTube, Netflix, POOQ television (TV), and Facebook. A ccording to the Korea Communications Commission (KCC), the scale of domestic OTT business continuously increased and reached 513,600 million in 2018. The increasing power of domestic OTT market seems to be in tandem with the cord-cutting effect — the phenomenon where users of the old pay television service abandon their subscription and move to new video platforms like internet television and OTT.
Behind these are OTT’s appeals to the public through original contents by the platform itself. Since the public look for more diversity and freshness, holding a variety of contents is one element of success in the OTT world. Under these circumstances, foreign business’s OTTs seem to be in a superior position than domestic business’s OTTs. This is because foreign business’s OTT such as Netflix is investing huge amount of cost in creating original contents, whereas domestic business’s OTTs mostly just take preexisting programs from domestic broadcasting.
Crustal Movements in OTT World
Accordingly, to stand up to foreign OTT platforms, a new domestic platform, WAVVE was launched on September 18. WAVVE is a combination of POOQ - one OTT platform of the three terrestrial television stations - and OKSUSU of South Korean wireless telecommunications operator (SK Telecom). WAVVE is different from existing domestic platforms in that more original contents, which are the key points of the success of Netflix, are expected. The creation of WAVVE has significance in that it directly aims at competing against foreign OTT platforms.
▲ Professor Sung Dong-gyu
However, there are two big issues that could hinder WAVVE’s growth. Above all, even if WAVVE is planning on creating more original contents, the investment cost of WAVVE is even lower than that of Netflix . This would inevitably make the gap in the quality of contents between the two platforms. Given this situation, there needs a content source of our own which would appeal to the viewers. Professor Sung Dong-gyu (Department of Media Communication, Chung-Ang University) suggests, “There are great sources for domestic original contents, which are Korean webtoons. Creating short videos with famous Korean webtoons would cost relatively less money, but grab the public’s attention very well.”
Other than contents, there is another worrying voice related with the “Prohibition on discriminatory trading of contents provision” by KCC. The provision prevents the three land-based television stations from providing contents discriminatorily only to WAVVE and this aims at making the OTT world fairer. However, some point out that this kind of sanctions act as a big obstacle in the development of WAVVE since if people can watch the contents on WAVVE in other platforms as well, there would be less differentiation.
However, there is one point to be considered in this matter, which is the fact that content-making businesses are risky. Professor Byun Sang-gyu (Collge of Arts and Sciences, Hoseo University) stated “It is so natural for production companies to distribute their successful contents to a plethora of platforms to make up for their previous failures and to raise money for next contents.” His mention implies that the “Prohibition on discriminatory trading of contents provision” is negative in the perspective of OTT platforms pursuing exclusive possession of contents, but may not be the case for production companies who sell their contents. Professor Byun further argues, “If the purpose is to upward the value of the platform through exclusive possession, then there could be alternative ways such as the production companies selling contents to secondary markets at a higher price or selling contents after a long time.”
▲ Professor Byun Sang-kyu
Too Much Freedom and Creativity
Since foreign businesses’ OTT service in Korea is being a threat to domestic OTT, the growing power of the OTT industry in sum would confront the traditional media services, especially television. OTT and domestic broadcasting systems have systematic differences such as in regulation of contents; further, the rules for a broadcasting system is often stricter and more complicated. Some argue that since what OTT provides is online video contents, OTT should also be subjugated as a business operator under the “Broadcasting Act,” which is a law that aims at discussing controversial issues regarding broadcasting and making limitations on the extent under which the contents exist.
However, others point out that too strict legal regulation could result in the deactivation of the OTT industry. Facing these problems, there is the need of making new types of provisions which can be applied to both broadcasting business and OTT. Professor Byun explained, “Before creating such regulatory measures, some prior tasks should be done. Firstly, there should be efforts to find the justification for imposing regulations in terms of public interest. Then discussions should be made on the reasonable criteria on what kind of business operators should the regulation be given, since wrong standards can cause enormous damage to similar Korean businesses such as Afreeca television or Naver television.”
OTT seems to be continuously extending its scope in the domestic contents industry. To let a business or an industry develop in a country, related organizations should carefully think about possible risks, listen to the voices of concern and try to reflect various perspectives. Furthermore, there should be greater efforts to maximize its value with appropriate sanctions. Professor Sung states, “I believe OTT is not a local business, but rather a global business. Hence, domestic OTT businesses would have to design the platforms targeting people all over the world. The Korean wave is now a pervasive phenomenon and I think it is time to convey it through a new form of wave, OTT.” With efforts to carefully consider the ways of regulation and to create contents of good quality, domestic OTT services and contents would beautifully bloom.
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