As Netflix and YouTube continue enjoying revenue gains worldwide, over-the-top (OTT) industries and experts in South Korea have expressed their disapproval.
The national government stringently controls local cable TV, network, and Internet companies. On the other hand, Netflix and YouTube are free from these restraints.
YouTube has encountered a sharp rise in its mobile and Internet users. This staggering control in the South Korean OTT industry is causing local service providers to be alarmed.
Naver, the largest Internet portal in South Korea, is being vigilant. Due to YouTube being free from proper regulation, it is, apparently, challenging the Korean firm’s lead in the country’s OTT industry.
South Korean companies and experts reckon that Netflix and YouTube’s freedom from local laws is exorbitant. They argue that this unfair scenario should be reversed, demanding that corrective action is put in place.
For them, broadcasting regulations are fundamentally fair to all. South Korean experts in the OTT sector contend that the Broadcasting Act should have the Internet Protocol Television (IPTV) Business Act consolidated into it.
Moreover, they believe that it is appropriate to refer to OTT service providers as value-added companies. These firms should, hence, be under the regulatory Broadcasting Act.
The director of Public Media Research Institute, Park Sang-ho, remarked that broadcasters in the country are unable to innovate due to the impediment caused by unregulated firms like Netflix and YouTube.
Under the Telecommunications Business Act, rising personal Internet and OTT broadcasting are categorized as supplementary communication services.
This provision makes them not subject to the current Broadcasting Act. Thus, when it comes to content, advertising, and entries in the market, these firms are not curbed.
There are industry experts who disagree which prolong the controversial issue of regulating Netflix and YouTube. They maintained that the same law could not be imposed on value-added firms. Otherwise, the Internet industry’s growth will be hampered.
At present, Netflix and YouTube relish ballooning influence and market stakes in the Korean peninsula. In May, YouTube was reported to be on top of the Korean video market.
With 85.6 percent shares of mobile video application usage, the parent company, Google, is massively raking in advertising and high-quality content revenue.
Meanwhile, Netflix has over 2.5 million subscribers in South Korea today. By 2020, it is predicted to earn an estimated $388.5 million in the country.