TVING·Wavve "We Are a Platform" Netflix·Disney+ "No, We're Not"

Ministry of Science and ICT Announces Value-Added Telecommunications Market Trends on the 9th
Netflix and Disney Plus Classified as Non-Platform Operators
Classification Based on Written Direct Responses

It was found that major companies operating online video services (OTT) in Korea have different perceptions of their ‘platforms.’ Domestic companies Tving and Wavve perceive themselves as ‘platform companies,’ while Netflix and Disney Plus define themselves as not being platforms. This result came from a survey conducted by the Ministry of Science and ICT.

[Image source=Yonhap News]

On the 9th, the Ministry of Science and ICT announced the ‘2022 Value-added Telecommunications Business Market Trends.’ To understand the rapidly changing value-added telecommunications market, the survey was conducted for the first time last year, and this year is the second time. According to the survey, the total domestic sales of value-added telecommunications operators amounted to 87,620 billion KRW, of which sales from value-added telecommunications services were 23,810 billion KRW. These figures represent increases of 9.1% and 19.6%, respectively, compared to the previous year. During the same period, sales from digital platform services grew by 28.1% to 8,860 billion KRW.

The Ministry surveyed 4,419 companies through written questionnaires and other methods. Among value-added telecommunications operators, 1,729 were digital platform operators. Digital platform operators are companies that provide intermediary services among those offering digital services or infrastructure. Since classification is based on companies’ responses, even companies engaged in the same business may or may not be classified as platform operators.

OTT is a representative example. Tving and Wavve responded that they provide intermediary services and were thus classified as digital platform operators. In contrast, Netflix and Disney Plus responded that they do not, and were classified as non-platform operators. Netflix consistently maintains the position that it is not a platform. In last year’s first survey, it was classified as a company providing ‘online direct transaction services.’ At that time, it also responded that it does not provide intermediary services.

Some argue that this is not merely a matter of corporate philosophy but a way to define themselves as non-platforms to avoid future legal regulations. This is because voices calling for ‘platform regulation’ are growing day by day both domestically and internationally. The EU (European Union) plans to implement regulatory legislation from next year that will require platform companies to establish procedures for handling harmful content and enforce monitoring activities, with penalties imposed for violations. In Korea, legislation regulating platforms such as Naver and Kakao is also being promoted. A Ministry of Science and ICT official stated, “This is a fact-finding survey to understand the overall market,” adding, “There is no intention of it being a preliminary step for future regulation.”