Increase in Multiple Subscriptions Such as Netflix+Watcha and Wavve+Netflix
[Asia Economy Reporter Kim Heung-soon] "(If the video content consumption market) progresses from code sharing and code cutting to code never, the growth and monopoly power of OTT (Over-The-Top online video services) will expand even further."
Lee Tae-hyun, CEO of the domestic OTT platform Wavve, made this remark while anticipating changes in the OTT market at an online press conference marking Wavve's first anniversary. He predicted that the way Korean consumers use video content could shift from 'code sharing,' where they watch both paid broadcasts like cable TV and OTT, to 'code cutting,' where they cancel paid broadcasts and switch to OTT, and eventually to 'code never,' where they subscribe only to OTT.
Lee Sang-woo, head of Wavve's service division, added, "We are moving from the code cutting era to the code never era, and the speed has accelerated due to the novel coronavirus infection (COVID-19). It is becoming an era where cable is completely unnecessary."
As OTT services, which charge around 10,000 won per month and allow users to enjoy various genres of video content such as dramas, movies, entertainment, and documentaries without burden, shake up the market landscape, the number of people subscribing to multiple domestic and international platforms is increasing. In addition to Netflix, which has the largest number of subscribers worldwide, users are subscribing to domestic platforms like Wavve, TVING, and Watcha according to their preferences. Domestic OTT platforms are strengthening their competitiveness to increase subscriber numbers in response to this trend.
Multi-subscription to 2-3 OTTs
'Netcha' and 'Weflix' Spread
According to some online communities on the 1st, people subscribing to multiple OTTs share the characteristics of each platform and provide guidance for those wishing to sign up. Generally, the method mentioned is subscribing to domestic OTTs in addition to Netflix as a base, and abbreviations like 'Netcha (Netflix + Watcha)' and 'Weflix (Wavve + Netflix)' are used depending on the platforms subscribed to.
Online, there are also matching platforms that connect people who want to share one account of Netflix, Wavve, Watcha, etc., among several users and split the monthly subscription fee according to the days used through automatic payments.
According to data released earlier by market research firm Nielsen KoreanClick, as of November last year, domestic mobile OTT users subscribed to an average of 1.3 services. Overseas, in countries such as the United States, Canada, and the United Kingdom, the average number of OTT subscriptions per household is estimated to be 2 to 3.
A content industry official said, "Almost all OTTs offer free trial opportunities at the beginning of subscription, and with multi-line access features, 2 to 4 people can share the fee, reducing the payment cost to about 5,000 won per person, so the number of people subscribing to multiple services without burden is increasing."
Exclusive Content and Expanded Sales Channels
Striving to Secure Users and Increase Retention Rates
The domestic OTT market is expected to become much more competitive as global players with their own content and financial power, such as Disney Plus, Apple TV Plus, and Amazon Prime, join after Netflix. Accordingly, domestic platforms are focusing on strategies to strengthen exclusive (original) content to maintain subscriptions by increasing user interest.
Wavve started with the original drama "Nokdujeon" last year and is releasing 12 series this year, including 7 dramas, 4 entertainment shows, and 1 concert. It has also introduced original programs through local broadcasters and OTT services in Asia, the Americas, Europe, and the Middle East. The monthly subscription movie library has expanded to about 6,000 titles, and overseas series such as "The Handmaid's Tale," "Normal People," "Gangs of London," "FBI," and "The Affair" are offered exclusively.
Starting this month, original programs including dramas like "Fly Dragon," "My Dangerous Wife," "Revenge," and "If You Cheat, You Die," as well as online concert programs and entertainment shows, will be released sequentially. CEO Lee said, "Even if global platforms enter the domestic market, the key is how much local content they have. If Wavve, either independently or in alliance with domestic OTTs, gains the upper hand, it will not be completely overwhelmed by global OTTs despite having less capital."
Watcha also announced it will pre-release highly talked-about content in the second half of the year. To increase contact points with users, it is offering a free three-day content pass without requiring payment information input for new subscribers during the Chuseok holiday and has started a promotion selling premium 12-month passes at over 30% discount through home shopping channels.
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