Netflix: Why are they facing hard time in Korean Market?

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Since Netflix officially launched its service for South Korean market, the service is not being spread as much as they expected. A half year passed since the service launch, still the subscriber increase in a steady step.

 

Due to the freemium policy, the subscriber has been rose to 81,564 users as of February this year. However the users at the point of April was around 50,000 by the data of Nielson’s Korean Click. For your information, TVING by CJ E&M has 550,000 paid subscribers and Pooq by major broadcasting centers have 200,000 paid subscribers for their own OTT. It seems that the Netflix is facing hard landing for Korean market.

 

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Why?

1. Price are so Cheap!
Compared with US market environment, Korean paid TV service providers are providing the contents in a low price.

IF you want to enjoy the IPTV service or Cable in US, you should pay around $90 per month. Compared with the market price, you pay only around $10~$20.

Especially, the service providers like KT, SK Broadband, and LG U+ are providing the service from mobile as well. Why should you download Netflix and use it from only laptop, mobile device, but not Television?

2. Koreans are not fascinated by the English contents.
Unlike English speaking countries, Koreans are the citizens who consumes the Korean based contents such as soap opera, TV Shows, and movies. And there are official channels and illegal channels from Dailymotion and Bay Korea as well. Even there are phantoms of American soap opera like house of cards, most of Korean citizens were not familiar. The dedicated contents are not expanding to the ordinary citizens of Korea.

3. Partners are not strong
To watch Netflix from Korea Television, you should turn of Apple TV and/or turn on your Google Chromecast. At this moment, no Korean set top box providers are not providing the Netflix application from Home menu. The company has recently announced that it will provide its service via D-Live. However, D-Live have market share less than 7% now. For your information, 2/3 of Netflix users are consuming the contents via Television.

Netflix recently announce that it will make dedicated Korean movie with famous Korean director investing $50Million and Korean dedicated soap opera series. It is being the beginning for the company to join the market.

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Since Netflix officially launched its service for South Korean market, the service is not being spread as much as they expected. A half year passed since the service launch, still the subscriber increase in a steady step.

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