Amazon, Netflix, YouTube vying for bigger shares in Korea

By Lee Min-hyung

With the arrival of Amazon’s video streaming service, Amazon Prime Video, the global industry-leading streaming giants ― Netflix, Amazon and YouTube ― are in a tight race to capture a larger share of the country’s video subscription industry.

Amazon launched the streaming service in more than 200 countries including Korea, Wednesday, in a bid to lead the fast-growing subscription-based video service market.

The U.S.-based e-commerce giant has drawn the spotlight with its aggressive marketing tactics, offering a 50 percent discount that allows subscribers to stream content for only $2.99 (3,520 won) per month for the first six months with a seven-day free trial.

This came about a week after YouTube’s paid streaming subscription service, YouTube Red, landed here, Dec. 6. The service comes for a monthly subscription of 7,900 won in Korea with one month free. Korea was the fifth market for YouTube Red, following the U.S., Australia, New Zealand and Mexico, but the first in the Asian market.

But the first mover for the Korean market was Netflix which debuted in January. Due to its massive influence in its home country, expectations were that Netflix may bring a paradigm shift in the country’s pay streaming service industry.

But the firm has so far failed to meet those expectations, even if it is slowly expanding its presence by teaming up with local content and media firms, including local cable TV operator D’Live.

For this reason, many predict that YouTube Red and Amazon Prime Video may follow the footsteps of Netflix, as internet users here are reluctant to pay for video content.

Despite the gloomy outlook, Netflix CEO Reed Hastings previously expressed confidence for the long term, saying the firm will generate profits in at least seven years once its membership size grows enough here.

The remark comes as the firm is generating little profit in most non-American territories due to such factors as the lack of local content.

“Global video-streaming players ― such as Netflix, Amazon and YouTube ― are on a path to increase their market share on the global stage, backed by their outstanding success in their home country,” said an industry source. “For them, global expansion is not about making a short-term profit, but raising their profile and brand value to build a foundation for more stable sources of revenue in the future.”

That is why they are focusing on establishing more partnerships with media industry players and content creators in each regional market, including Korea’s, according to the source.

Another source from the cable TV industry said: “The over-the-top content industry does not require massive investment, as it is based on the internet, rather than physical infrastructure.”

“That is why players such as Netflix and Amazon can expand into many countries at one time,” he said. “On top of that, Korea boasts one of the world’s fastest internet infrastructures. This serves as the best test-bed for global IT titans.”