Rapid Growth 'Stalls' Coupang OTT, Impact of Membership Fee Increase?

User Decline for Two Consecutive Months in Recent Period This Year

The growth in users of Coupang's online video service (OTT) 'Coupang Play' is slowing down. This is quite different from last year when the number of users increased sevenfold, showing a steep upward curve. Since January this year, the number of users has decreased. This is seen as a result of intensified competition in the domestic OTT market, as well as an analysis that the decision to raise the usage fee for 'Wow Membership' members who use Coupang Play has had an impact.

According to Mobile Index by data company IGAWorks on the 23rd, Coupang Play's monthly active users (MAU) based on Android and iPhone (iOS) smartphones recorded 3.37 million last month. After hitting a peak of 3.68 million in January this year, the number of users has declined for two consecutive months. Looking at the weekly active users (WAU), the decline is even more pronounced. In the week up to the 27th of last month, Coupang Play had about 1.7 million users, but in the week up to the 3rd of this month, it dropped to 1.54 million, and from the 4th to the 10th, it further fell to 1.39 million.

This contrasts with the rapid growth seen throughout last year. Coupang Play started with 520,000 users in January last year after its launch in December 2020, but by December, the number had increased to 3.59 million. This means the number of users surged nearly sevenfold in one year. According to a survey by app analytics service WiseApp, Coupang Play's user base grew by 418% over the past year, making it the fastest-growing OTT.

Industry experts analyze that the slowdown in user growth is due to intensified competition in the domestic OTT market, where global companies like Netflix, Disney, Apple, as well as major content companies and telecommunications firms, are fiercely competing. The OTT market competition is intensifying to the extent that Netflix, the world's largest OTT, saw its global subscribers decrease by 200,000 in the first quarter compared to the previous quarter.

Some believe that the user decline may be linked to Coupang's decision to change the monthly fee for existing Wow Membership users who access Coupang Play from 2,900 KRW to 4,990 KRW. Coupang is currently undergoing a consent process to change the Wow Membership monthly fee for existing subscribers within the first half of this year. Whether and to what extent users will leave due to the price increase is expected to become clearer around June. There is talk that the 'lock-in effect' Coupang expects to retain existing users as an OTT service may not be as strong following the fee increase.

However, there is also an analysis that there is still significant potential for user growth, given that the number of Wow Membership members who can use Coupang Play for free is around 9 million. An industry insider said, "Many Wow Membership members are either unaware of Coupang Play or do not yet feel the need to use it," adding, "There is sufficient possibility for user growth depending on strengthening original content."