Samsung Electronics-LG Electronics Offer Multiple OTT Apps
Essential Strategy to Strengthen Content Like Netflix and Disney Plus
[Asia Economy Reporter Kim Heung-soon] Samsung Electronics and LG Electronics, which have significant influence in the global TV market, are strengthening their content competitiveness by integrating over-the-top (OTT) online video services into their smart TVs. This strategy is interpreted as an effort to minimize customer demand shifting to internet TV (IPTV) led by the telecommunications industry, as well as IT and mobile devices, and to avoid falling behind in the competition.
According to the industry on the 15th, users of Samsung Electronics and LG Electronics smart TVs in Korea will be able to watch Disney+ through their TVs starting from the 12th of next month, when the service launches in Korea. Users can download and run the Disney+ application via the smart TV operating systems (OS) provided by each company. The monthly subscription fee of 9,900 KRW and the annual subscription fee of 99,000 KRW set by Disney+ must be paid by the users.
Smart TVs, like smartphones, allow users to download and run specific apps through the operating system provided by the manufacturer. From the OTT user’s perspective, the advantage is being able to watch various genres offered by OTT on a larger and clearer TV screen. Samsung Electronics and LG Electronics have been negotiating with domestic and international OTT companies to enable immediate execution of OTT content, whose user numbers are rapidly increasing, on smart TVs. As a result, apps from global OTTs such as Netflix, Amazon Prime, HBO Max, YouTube, as well as domestic OTT companies like Wavve and Watcha, can be run.
An industry insider said, "As the influence of OTT grows, global OTTs like Netflix require separate contracts to allow their apps to run on smart TVs," adding, "It’s not automatic just because the product exists; the TV manufacturer’s brand recognition and competitiveness must be at a certain level for negotiations to be possible."
Disney+, launched by Walt Disney in 2019, has rapidly increased its market dominance, surpassing 116 million subscribers worldwide within two years of its launch. Samsung Electronics and LG Electronics have been preparing to integrate Disney+ into their smart TVs since Disney+ first launched overseas, considering the content influence of Disney.
Smart TVs have established themselves as the mainstream in the global TV market. According to market research firm Omdia, about 80% of the approximately 222.91 million global TV shipments in 2019 were smart TVs, and this proportion increased to about 85% of the approximately 225.47 million units shipped last year. Smart TVs account for around 90% of the total TV product lineup of Samsung Electronics and LG Electronics.
These manufacturers are focusing on strengthening smart TV content by operating exclusive channels that offer free content as well as OTT services. Samsung Electronics provides free content such as movies, dramas, entertainment, news, and sports through its 'Samsung TV Plus' channel. This channel first launched in Korea in 2015 and currently operates over 1,000 channels in 23 countries. LG Electronics has also been operating 'LG Channels' since 2015 and plans to offer about 1,900 channels in 25 countries by the end of this year.
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