Bo-eun leads the digital content team. She has covered foreign affairs, North Korea, tech, economy and gender issues at The Korea Times. She did a short stint at the South China Morning Post in Hong Kong, where she obtained a new perspective on news production and life. Small sources of joy for her are lounging in the sun, having a good latte and swimming.
Google app store fees to widen gap between Netflix, local OTTs
By Kim Bo-eun
An image of Google Play store / Korea Times file
By Kim Bo-eun
Local over-the-top (OTT) media service providers are bracing for Google's introduction of fees for application developers on payments made to them here via the Google Play store. They fear the existing gap with Netflix will grow based on the new fees, which the foreign firm is not subject to.
Google is set to introduce a 30 percent fee in September next year. This will add an additional burden on local OTT service providers such as Wavve, Tving and Watcha, which are already paying a 30 percent fee charged by Apple for payments made on its app store.
This means if the subscription fee is 10,000 won, the firms pay Apple 3,000 won from each payment they receive.
The companies have been charging subscribers greater fees to make up for the loss paid as fees to Apple. This has resulted in iPhone users becoming subject to higher subscription fees than people using Android phones.
For example, Android users can sign up for Wavve plans ranging from 7,900 won to 13,900 won, but for iPhone users the subscription fees range from 12,000 won to 20,000 won.
The OTT service providers state that when Google's fee policy goes into effect, they will be forced to raise the subscription fee for Android phone users as well.
The problem for the firms is that Netflix, which already leads in market share, is unaffected by Apple and Google's fee policies.
This is because Netflix has set up its own payment system, which makes subscribers pay on its webpage even if the application is downloaded from Apple's app store. This will keep it unaffected by Google's new fee as well.
Local firms earlier tried to set up their own payment systems in 2016, as a means to bring down subscription fees for iPhone users. Apple, however, refused to approve this function for them.
The OTT service providers fear that the gap with Netflix will grow, after Google's fee policy goes into effect and Android phone users opt for cheaper subscription fees. They claim the cheaper subscription fee was the only advantage they held over Netflix.
The firms are set to face greater losses given Android's dominance in the local mobile phone market.
The companies requested for the Fair Trade Commission to review whether Apple is abusing its status as the operator of its app store, but no developments have been seen in the past year.
Recently they also asked the watchdog to look into Google's possible abuse of its market-dominant status in its plan to introduce a fee.
Bills proposed by lawmakers to prevent Google from introducing the fee are pending at the National Assembly.