OTT Market Smaller Than TV and Theaters
Watcha Transforms into Comprehensive Content Platform
Overseas Service Areas to Expand Next Year
Pre-IPO Fundraising Scale Expected to Increase
Park Tae-hoon, CEO of Watcha, is conducting an interview at the headquarters in Gangnam, Seoul, on the afternoon of the 10th.
[Asia Economy Reporter Cha Min-young] "Netflix's sluggish performance should be seen not as a crisis for online video services (OTT) but as a process of deflating the big tech (large information technology companies) bubble."
On the afternoon of the 10th at the Gangnam headquarters in Seoul, Park Tae-hoon, CEO of Watcha, appeared wearing a backpack, busy going up and down floors for meetings with company executives throughout the day. The most pressing question was the OTT crisis theory that emerged after the COVID-19 situation calmed down. Park said, "The shift in viewing trends from one-way broadcasting to video on demand will not change in the future," adding, "OTT still has many growth opportunities."
"OTT Market Still Small"
Park pointed out, "Compared to the TV and cinema markets, the OTT market size is still small," and added, "The media industry is well aware that online-centered consumption will inevitably increase in the future."
Park is aiming for two goals through the 'Watcha 2.0' vision: transforming into a comprehensive content platform and expanding overseas. The plan is to expand service areas beyond Japan to other overseas regions in the first half of next year. The number of subscribers in Japan, where Watcha first entered, has tripled compared to the previous year, thanks to the popularity of Watcha original works such as the BL series 'Semantic Error,' and local responses are positive. Except for China, which effectively prohibits foreign companies from entering, all regions are being considered with possibilities open for final review.
The transformation into a comprehensive content platform is considered a long-term task. Park said, "We are thinking about various consumer experiences based on a single intellectual property (IP) grounded in our strength in algorithmic recommendations." He sees lighter content such as webtoons and music, which are lighter than movies, as a medium to increase Watcha's core metric, retention rate. According to Watcha, increasing the retention rate by 10% results in an 85% increase in revenue. Various IP utilization plans are also being devised, including issuing community-type non-fungible tokens (NFTs) that serve as 'invitations' to offline events.
"Raising Funds to Secure Exclusive Content"
Content acquisition, the core business, is also an important issue. In May, Park traveled to the U.S. to attend the 'LA Screening,' the largest offline B2B broadcast content market event in North America. Park said, "Since we are considering overseas expansion, we had various themed works in mind," and added, "As OTTs gain more power compared to theaters or general broadcast channels, many wanted to meet with us." In the investment banking industry, Watcha's corporate value is mentioned to be around 500 billion to 700 billion KRW, which is at least 1.5 times larger than the 300 billion KRW recognized in the previous round. Park said, "The capital market is rapidly changing, so we are listening to many experts' opinions," but also stated, "We expect to raise much larger funds than in the previous round."
Meanwhile, regarding Google's forced in-app payment policy, Park also emphasized the importance of app developers' proactive judgment. While competitors raised prices considering in-app payment fees, Watcha continues to offer the previous pricing plan. Park said, "Past data analysis showed that the efficiency of in-app payments lowers payment barriers, and we judged it to be bearable," adding, "We will continue to make pricing decisions based on data-driven decision-making."
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