Naver-Kakao Face Off Against Global OTT Platforms

Naver 'V Live' Paid Purchases Increase by Over 50%
'KakaoM' Subscribers Surpass 3.09 Million in One Month

[Asia Economy Reporter Jin-gyu Lee] Naver and Kakao are gearing up for fierce competition with global online video services (OTT) such as Netflix and YouTube. Naver's video streaming service 'VLIVE' is attracting paid users by featuring live performances of idols and web variety shows. Kakao is also accelerating its OTT market strategy with 'KakaoTV,' based on KakaoTalk (KakaoTalk), the national mobile messenger with 46 million monthly users.

Rapid Increase in Paid Purchases on Naver VLIVE

According to Naver on the 1st, the number of paid product purchasers on VLIVE exceeded 810,000 in the first half of the year. Considering that the number of paid product purchasers was 1 million throughout last year, this represents an increase of more than 50%. Since 2016, the cumulative number of paid product purchasers has surpassed 4.15 million.

VLIVE's paid products include online paid performances 'VLIVE+' and the global community membership 'Fanship.' The transaction amount for paid products on VLIVE from May to August increased about 12 times compared to January to April, the early stage of the COVID-19 pandemic. During the same period, the number of paid product purchasers increased about 33 times. The securities industry expects that thanks to VLIVE's strong performance, Naver's content service division revenue in the third quarter will double year-on-year to the 100 billion won range.

The surge in paid product purchasers on VLIVE is due to the increase in online performances by popular artists as offline performances were consecutively canceled following the COVID-19 pandemic. With difficulties in airport arrivals and departures due to the pandemic, global Hallyu fans increasingly enjoy online performances. Over the past year, VLIVE's monthly active users (MAU) by continent have increased more than threefold in North America and Europe and about fourfold in Africa compared to 2016. The cumulative downloads of the VLIVE application have exceeded 94 million. A Naver official explained, "More than 80% of VLIVE users are global users."

KakaoM Surpasses 3.09 Million Subscribers in One Month

KakaoM is also showing rapid growth by securing more than 3.09 million subscribers in just one month. On the 1st of last month, KakaoM unveiled KakaoTV original content for the first time and revealed the direction and future lineup of KakaoTV content. At that time, Shin Jong-su, head of KakaoM's Digital Content Business Division, emphasized, "We will present original content that is not just watchable on mobile but is more enjoyable because it is viewed on mobile."

KakaoTV is attracting viewers with content that is about 15 minutes long at most. The KakaoTV variety show 'Face ID,' which looks into singer Lee Hyori's daily life through a smartphone, surpassed 7 million cumulative views within two weeks of its launch. Shin said, "What users who enjoy content on mobile want is not short-form content but fast-paced, quick-breath content," adding, "KakaoTV original content will be planned and produced to have a complete story arc in each episode with a condensed plot to enhance immersion."

KakaoM also plans to move away from the traditional horizontal format suited for TV or screens and create so-called 'mobile frame' formats using various screen frames such as vertical, square, and variable formats. This is to produce content with the optimal frame to maximize convenience, enjoyment, and immersion for content consumers on mobile. KakaoM has set a plan to present a total of 25 titles and about 350 episodes as KakaoTV original content this year, including 6 dramas and 19 variety show titles.