Lee Gyu-lee is a business writer at The Korea Times, focusing primarily on IT & telecommunications, the Ministry of Trade, Industry and Energy and KOTRA. Prior to this, she has covered a wide range of cultural news, from film, television and K-pop to lifestyle and fashion.
Will Korean firms' free ad-supported streaming TV biz rival global services?
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By Lee Gyu-lee
For the past few years, streaming services have dominated the media content industry, as the COVID-19 pandemic drew homebound viewers across the world into subscriptions.
However, as the bygone peak of the streaming boom fades, viewers grow increasingly fatigued with mounting subscription fees and complex options, prompting the industry to turn its eyes on free ad-supported streaming TV (FAST) services, which offer content for free in exchange for ads.
Coupled with stagnation in the conventional internet protocol TV (IPTV) business, internet providers including SK Broadband, KT and LG Uplus are placing big bets on FAST as an alternative, positioning it as the next wave in digital media with ambitions to expand both locally and globally.
According to a Korea Communications Commission report in March, the number of subscribers for paid broadcasting services, including IPTV and cable TV, stood at 36.29 million in 2023, while their combined revenue was about 7.23 trillion won ($52.35 billion). This represented 0.01 percent and 0.4 percent growth compared to the previous year, respectively.
As IPTV and cable TV reach their growth limits, internet providers are shifting their investments toward FAST in an effort to revitalize media revenue, targeting viewers burdened by rising subscription fees for streaming services and seeking more cost-effective alternatives.
An image of Samsung TV Plus / Courtesy of Samsung Electronics
FAST is a streaming model that offers content for free in exchange for viewing ads, generating revenue through commercials in the programs. These platforms provide a mix of linear TV programming and on-demand content, which can be accessed through smart TVs and streaming devices.
According to market research firm Omdia, the global FAST market is projected to reach $12 billion by 2027. The service is gaining traction particularly in the United States and Europe, where pay TV is significantly more expensive than in Korea.
Market tracker Kantar Media noted that the proportion of households watching FAST content at least once a week in the U.S. rose sharply from 24 percent in the third quarter of 2022 to 47 percent in the same period of 2023.
To eye those lucrative markets, SK Broadband, which was the first telecom company to enter Korea’s FAST market in 2022, launched FAST channels in July last year on its mobile platform Mobile B tv, which now operates a total of 69 channels. Earlier this year, the company began a pilot program to bring FAST channels to its IPTV platform, B tv, and is preparing for an official launch.
KT recently announced media as one of the group’s three core businesses to develop, signaling aggressive strategies to strengthen its media business.
The company is planning to introduce a pilot FAST service within the first half of this year on its IPTV platform, Genie TV. It is pushing to provide original content from its subsidiary KT Studio Genie via FAST channels for global audiences. It also plans to monetize its content’s intellectual properties.
LG Uplus began offering FAST channels on LG Electronics’ smart TVs in April 2023. The company teamed up with the country's KBO League to launch the first Korean professional baseball channel on its FAST platform.
The baseball channel is gaining popularity among global audiences, as it not only offers live coverage but also highlight videos with translation through AI technology. The company is also working with a local AI tech company, Hudson AI, to provide real-time AI-translated voice-overs for livestreams.
Experts are casting positive views on FAST as a new media platform. Do Joon-ho, a professor of communication and media at Sookmyung Women's University, noted that the market holds great potential, especially with Korea’s content quality.
“The FAST market’s growth continues with a viewer base that has less resistance to ad-based viewing. These are viewers who can tolerate seeing ads while watching content, and by continuously improving content quality for these viewers, the viewing experience has been transformed into a virtuous cycle, which I believe has led to growth so far. And for this to grow further, supplying quality content is of course the biggest factor ultimately,” he said.
“From the viewer's perspective, streaming services come with financial burdens and require making choices; the choice itself can also be considered a cost in some ways. But FAST doesn't have that issue.”
Hanwha Eagles righthander Cody Ponce pitches against the NC Dinos at Daejeon Baseball Dream Park, April 20. Courtesy of Hanwha Eagles
He added that having major smart TV suppliers like LG and Samsung also contributes to helping local FAST channels spread globally.
“Since manufacturers are essentially in a position to control the gateway, various log-in records generated there can be very attractive for advertisers. These can be a new digital advertising platform which is different from traditional mass media,” he said.
As FAST gains spotlight, the government is also chiming in to provide a framework to support and expedite business development, launching the Global K-FAST Alliance.
The Ministry of Science and ICT and the Korea Association for ICT Promotion rolled out the alliance bringing together TV manufacturers, broadcasters and telecom firms.
The alliance plans to stir collaboration between the public and private sectors and enhance overseas Korea's FAST services. It will cooperate in creating and localizing Korean content through AI for global audiences, marketing the channels and its content, as well as exchanging knowledge on global FAST trends.
The ministry will provide assistance, including developing convergence projects like connecting ads based on overseas viewing data and hosting international FAST conferences.
“FAST is an ecosystem where content, platform, network and device all need to converge. So establishing a public-private partnership system is essential for the global expansion of K-FAST,” Kim Seong-cheol, a professor at Korea University, said during the alliance’s launch event.
“With the alliance as a pillar, building cooperation and promoting joint projects for substantial collaboration will contribute to Korea's leap forward as a leader in the global FAST market.”