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| Over-the-top platforms in Korea are suffering from a declining number of users this year. Korea Times file |
By Lee Gyu-lee
The streaming service business is one of the industries that benefited from the COVID-19 pandemic as more and more people turned to over-the-top (OTT) platforms for entertainment during lockdowns, which led to a steady growth in the number of users in recent years.
However, as the social distancing and the coronavirus-induced restrictions ease, streaming service platforms here are facing struggles with a bleak outlook, losing their subscribers.
According to the big data platform Mobile Index, most of the major OTT services like Wavve, Tving, Coupang Play and Disney+, saw falls in their subscriber numbers in the first half of this year. The overall mobile users of the top seven services, which include the four above as well as Netflix, Seezn, and Watcha, totaled 26.86 million in April, down by about 3.4 million compared to this January.
Individually, the largest local service, Wavve, suffered the highest fall of 14 percent of the number of users from 4.92 million in January to 4.23 million in June.
Watcha also saw a continued fall in its monthly users since January from 1.29 million to 10.8 million in June.
During the heated competition among the streaming services, which has led them to make aggressive investments to secure their original content, many local OTT platforms have incurred operating losses.
Wavve, which announced last year it would invest a total of 1 trillion won to develop its own content through 2025, suffered about a 55.8 billion won ($42.97 million) operating loss in 2021.
CJ ENM's Tving, which announced plans to invest 5 trillion won over the course of five years to expand its service, experienced about a 76.2 billion won operating loss last year. Watcha's operating loss totaled around 24.8 billion won over the same period.
Amid the struggle, KT Studio Genie, which owns Seezn, and CJ ENM have decided to join hands to survive the competition to become the biggest local platform by merging their platforms.
"The decision was reached to strengthen the competitiveness within the local OTT media and contents industry and accelerate the growth of Korean contents," KT Studio Genie said.
The two companies plan to finish their merger by December, which is expected to garner about 5.31 million users in total, making it the largest domestic platform.
Watcha, which has also been struggling, has taken steps to reduce operating costs and is rumored to be looking for a new owner or fresh investors.
The local platform once rose to become one of the leading services in Korea, valued at about 300 billion won in a series D funding in 2020. However, it failed to step up its game in the streaming war with its value estimated at about 150 billion to 200 billion won.
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