Preferred by All Age Groups from Toddlers to Silver Generation
Telecom Companies Busy with Final Negotiations
[Asia Economy Reporter Cha Min-young] Disney Plus (+), a global online video service (OTT) with massive capital and content, has officially announced its entry into Korea this November, signaling a potential shake-up in the domestic market long dominated by Netflix. LG Uplus is virtually confirmed as the local partner, while KT is also continuing negotiations.
According to Walt Disney Company, which operates Disney+, CEO Bob Chapek stated during a global earnings conference call on the 12th (local time) that "Disney+ will be launched in mid-November in Asia-Pacific (APAC) markets including Korea, Taiwan, and Hong Kong." This is the first time the top management has officially specified the launch month for Disney+ service in Korea.
The most likely partner in the domestic market is LG Uplus. When Netflix entered Korea in 2016, LG Uplus was the first to propose cooperation and enjoyed a strong first-mover advantage despite unfavorable contract terms such as revenue sharing methods and ratios. Hwang Hyun-sik, CEO of LG Uplus, recently hinted that discussions are nearing completion, saying, "There will be good news."
KT, which experienced customer churn from OTTs and was late to negotiate with Netflix, is now actively pursuing Disney+. They are determined not to miss out on Disney. Telecom companies are focusing on the strong customer lock-in effect in home media businesses like IPTV when partnering with Disney+. SK Telecom, the industry leader and shareholder of OTT Wave, is reportedly not involved in the negotiations.
A reorganization is inevitable in the domestic OTT market, currently led by Netflix and pursued by local companies. Disney+ boasts powerful content appealing to all age groups, from children to seniors, including Marvel series like Avengers and Star Wars.
According to WiseApp, Netflix's monthly user count in June reached 8.31 million, exceeding the combined users of Korea's representative OTTs Wave (3.13 million), TVING (2.64 million), and Watcha (1.38 million) by over one million. Considering the system where one account is shared by multiple users, known as the '4-person party,' the actual number of users is expected to be much higher. Domestic OTTs, already trailing Netflix in funding and scale, face deeper survival concerns ahead of Disney+'s arrival.
Disney+ has stopped service partnerships with domestic OTTs this year and has also ceased supplying video-on-demand (VOD) content to the three major IPTV providers. It is securing intellectual property (IP) including local content. Disney+ signed a five-year content supply contract with NEW, a subsidiary of Studio&New, which produced the famous drama "Descendants of the Sun." Original content starring actors Seo Kang-joon and Kim Ah-joong, such as "Grid," and the popular webtoon adaptation "Moving" are also in production. These original contents are expected to be unveiled alongside the Korean service launch in November.
An OTT industry insider said, "The hierarchy in the OTT industry, led by Netflix, could be overturned," adding, "Netflix's competitiveness, built steadily over five years with Korean content, is formidable." Another insider commented, "The Korean OTT market is still growing," and "Local OTTs will also benefit from this growth."
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