Update : 2019.05.15  Wed  No : 502
제목 본문 이름
 
Culture Insight
Is Global OTT a Friend or Foe?

In January 2019, Netflix, the leader of the global OTT, expanded its presence in Korea by unveiling its first Korean original drama, “Kingdom.” “After joining Netflix to watch Kingdom, I fell in love with its various contents. These days, instead of watching terrestrial dramas at night, my family watches movies and dramas on Netflix together,” one anonymous student said. As OTT has begun to stir the media market, a sense of crisis has arisen in domestic platforms. The Argus looks at the domestic platforms’ reaction to this current situation.

Information

What is OTT?
OTT refers to Internet-based video services. It stands for “Over The Top” and “Top” means a set-top box connected to one’s TV. OTT provides broadcasting programs and movies through the Internet-based network such as online downloading and streaming. Netflix, YouTube, Hulu and Amazon Prime Video are major global OTTs.

OTT’s Steep Growth
As LTE technology became commercialized in 2014, the global OTT service has quickly grown. According to WiseApp, an app analysis company, the number of users increased by 300 percent from 340,000 to 1.27 million in just one year. Moreover, Netflix’s monthly screen-time increased by 20-fold, from 14 minutes to 283 minutes over the past two years.


Domestic platforms keeping global OTT in check

With OTT emerging as a new leader in the media market, domestic platforms have to find new ways to survive the media war. They got a clue from OTT’s “Original Content.” Original content is produced in a series format by OTT and viewed only through that platform. “13 Reasons Why” and “Stranger Things” are notable original dramas made by Netflix. From these examples, domestic platforms have come up with new ideas.

New paradigm in contents manufacturing

Increase in self-produced contents
Domestic platforms are growing their own planning capabilities to gain an edge over the competition. They have introduced a self-production system and have set up subsidiaries specializing in content manufacturing processes.
In the past, broadcasting stations signed contracts with outsourcing companies for content production. The outsourcing company planned the drama for several months, while the broadcasting station that bought the drama sent an internal PD to direct it. The ratio of outsourced terrestrial dramas was 90 percent in 2008 and was still 84.4 percent from 2010 to 2014.
Now, the subsidiary makes more and more content by itself and strives to monopolize certain content. Some of the most famous works of Studio Dragon, a subsidiary founded by tvN in 2015, include “Mr. Sunshine” and “Goblin.” One of the representative works of Jcontentree, JTBC’s subsidiary established in 2016, is “SKY Castle.”
As subsidiaries are trying to produce content that can save their own characteristics, viewers can access fresh and new genres. “I prefer self-produced dramas because they tend to point out the writer’s message clearly through fresh subjects, rather than through formal storytelling, such as love, separation, reunion and marriage, as in previous dramas,” said Na Ji-hye, a student of Chung-Ang University.
“In fact, many of the self-made content aired so far have received favorable reviews in terms of story and composition. I think the self-production system will broaden the outlook for our media content,” said Kim Tae-hee, a student of Jeonju National University of Education.

Increase in Series
Series formats are also becoming more active on domestic platforms. In the past, there was a stereotype that a season would always flop because there was a lack of unity between seasons. For example, viewer ratings of “Let’s Eat 3: Begins” aired on tvN in 2018 dropped every episode after the sudden death of the previous season’s heroine.
Nevertheless, the series format often becomes all the rage and its production has been pouring in these days. Of course, it is also important to guarantee stability, not just to bring attention temporarily. Therefore, in the flood of content, the platforms try to gather loyal fans. The series format is advantageous in that it can form a steady fanbase over several seasons.
Each season, the producer upgrades the characters and stories that make viewers look forward to the next season to win the hearts of fans of both previous and new seasons. This allows viewers to receive higher quality content.
“It’s good to see that every season unfolds in a very natural way, and it’s fun to predict the next season through clues from the previous one. I hope that the seasonal dramas will be produced more actively in the future,” said Na Ji-hye.
“I recently saw entertainment programs such as “Yoon’s Restaurant (tvN)” and “Hyori’s Bed & Breakfast (JTBC).” I felt that even though the concept of seasonal entertainment was the same, it could make up for what people could feel boring by solving various stories every season,” said Shin Ji-yeon, a student of Ewha Womans University.
 
Domestic platforms co-operating with global OTT

Global OTT is both a competitor and partner of domestic platforms. Considering that OTT is based on a global distribution network, domestic platforms need strategic partnerships with it. In fact, content spreading around the world through global OTT showed a tendency to rise steadily. Psy’s “Gangnam Style” and Pinkfong’s “Baby Shark” went through YouTube and even onto Billboard chart success. Domestic platforms have detected this trend and devised a strategy in such an environment.

Expansion of K-content through global OTT

Copyright agreement with OTT
Domestic platforms are selling and distributing copyrights of K-content to global OTT and are spreading the Korean Wave. Global OTT has a network that provides services to various regions or countries.
According to the results of the survey conducted by the Korean Foundation for International Cultural Exchange in 2018, OTT was the most common route to access Korean video content. OTT accounted for 70 percent of the way respondents watch movies, dramas, entertainment and animation.
Through the global network of OTT, Korean Wave content has spread not only in Asia but also globally. China’s OTT, iQiyi aired SBS drama “My Love from the Star” at the same time as Korea in 2014. “Memories of the Alhambra,” which aired on tvN in January, was available through Netflix in the Americas and Southeast Asia an hour after its home viewing time.
Meanwhile, the higher the value of the Korean Wave, the more expensive overseas copyrights selling to OTT can become. Overseas copyrights are mainly used by domestic platforms to cover their production costs. For the tvN drama “Mr. Sunshine,” overseas copyright of more than 30 billion won (US$26million) for Netflix provided two-thirds of the total production cost of 40 billion won (US$35million). Such strong demand will allow the public to enjoy larger-scale cultural content.

Coproduction with OTT
Domestic platforms are planning to expand their scope through cooperation with global OTT. It is an excellent opportunity to introduce their names to overseas markets if domestic platforms produce content that can appeal to foreign viewers.
Studio Dragon and Netflix have confirmed the simultaneous broadcasting of the jointly produced drama, “Love Alarm” in 2019. They will also supply an additional one or two local original dramas together. Studio Dragon has also signed a contract with China’s OTTs to co-produce content. They are scheduled to produce two local TV shows in the first half of this year.
The linkage with global OTT not only helps create new revenue sources, but also strengthens the pre-production system of content. Pre-production allows content creators to take enough time to freely reflect their own intention and creativity. As a result, viewers will be able to access content with great quality.
Critics point out that it is not possible to reflect viewers’ responses every minute, but it can be supplemented by collecting both metadata provided by market research companies and social data via social media and then making content that fits their needs.

Limitations

While domestic platforms bid to survive the media war, there are still some weaknesses in the competition with global OTT.

Absence of personalized system
It is still difficult to introduce an individually customized system in domestic platforms. Cable and terrestrial channels provide arbitrary schedules one-sidedly regardless of viewers’ tastes. Viewers have only limited channel options.
However, the provider-centric media market is becoming consumer-centric. Consumers want consumer-tailored programs not constrained by suppliers’ schedules. They no longer sit in front of the television waiting for the show they want to watch.
In this regard, global OTT, which does not rely on viewers tuning in at a set time, becomes a big attraction. “It’s much more convenient because I can watch a drama that I missed last night through Netflix or YouTube the next day,” said Kang Chae-won, a student of Kyung Hee University.
 “I tend to watch dramas or entertainment programs in the subway or on the bus to and from school. It’s useful because I can choose any program and binge-watch any time,” said Lee Sun-bin, a student of Sungkyunkwan University.

Loss of initiative
Securing a global distribution network and increasing negotiation power through cooperation with global OTT is certainly a positive effect. However, there are concerns that domestic platforms should be less dependent on global OTT.
Although cooperation with global OTT will help improve profitability for domestic platforms in the short term, it can encroach on their territory in the long term. If capital dependence deepens, global OTT will monopolize distribution networks and the domestic media platforms might fall to the level of being subcontractors of global OTT.
In fact, the U.S. company, Netflix has more than 50 percent of the market share in Europe. According to the Roy Morgan Research, Netflix currently holds 83 percent of the market share in The United Kingdom, where it entered in 2012, and 68 percent in France where it entered in 2014. There are considerable concerns that the domestic media market will also be dominated by Netflix.

Rooms for improvement

“Global OTT does not have enough killer content in Korea yet,” said a culture critic, Kim Heon-sik. “New platforms such as Netflix have the advantage of providing content in various countries, but there is no solid local content that fits our culture. Netflix just combines a famous Korean writer with a famous actor. In fact, the movie “Okja,” which was released in 2017 and filmed by Bong Joon-ho, one of the most renowned directors in Korea, was still not attractive enough to captivate the Korean audience.”
Domestic platforms can take advantage of global OTT’s weaknesses. They have been in the flow of Korean culture for a long time and they are much more familiar with it than global OTT. If domestic platforms develop a more solid storyline and release content that suits Korean culture, it can attract many viewers.
In addition, partnering with local agencies is one way to avoid the situation where domestic platforms become bounded economically by global OTT. Domestic platforms can form alliances with IPTV of telecommunication companies, a service that allows people to watch live broadcast and VODs on the Internet. It can cover production cost by providing channels to IPTV and receiving fees.


Today, the media war continues across the frontier. As for the current situation where global OTT is expanding its presence in Korea, the recipients of the media market often accept only positive responses in that they can enjoy a lot of content. However, they should take the time to explore the cultural phenomena of the domestic platforms caused by OTT and think about how the global OTT would be accepted from the supplier’s perspective. This broadens recipients’ horizons and makes them become even smarter consumers.


By Kim Min-ji
Staff Reporter of Culture Section

2019.03.11  No : 500 By Kim Min-ji minjee9902@hufs.ac.kr
 
Dating App: A Love Messenge
Right Mindfulness
Fine Dust: Is It Fine?
No Questioning in Class: Wh
The March to March
Leading Good Education: Ask
Old Bookstores Waiting for
Drawing Stories in Virtual
 
Opinion  
Editorial
Right Mindfulness
Epilogue
The March to March
National  
Social Insight
No Questioning in Class: What Closes Their Mouth?
People
Leading Good Education: Ask Her Educational Value
Reportage
Old Bookstores Waiting for the Young
Culture  
Cover Story
Dating App: A Love Messenger, but What Is Behind It?
Rendez-vous
Drawing Stories in Virtual Reality
Culture Trip
Satisfy Your Five Senses? It Makes Sense in Convergence Art!
Culture Insight
Is Global OTT a Friend or Foe?
Theory&Critique  
T&C Tower
Fine Dust: Is It Fine?