SKT, SKB, and Netflix Reconcile After 3 Years... Watch Netflix on Btv (Comprehensive)

Lawsuit Over 'Network Usage Fees' Withdrawn, Dispute Resolved
Partnership Signed... Product and Technology Cooperation
Specific Contract Details Kept Confidential... "OCA Free Deployment"

Netflix and SK Telecom·SK Broadband have ended the protracted legal battle that began in 2020. On the morning of the 18th, both parties withdrew lawsuits related to network usage fees and concluded the dispute. They also agreed to establish a cooperative relationship by signing a strategic partnership to enhance customer benefits using artificial intelligence (AI) technology and other means.

With SKT·SKB and Netflix entering reconciliation mode, SKB users?who were the only ones among the three IPTV providers unable to watch Netflix on their IPTV platform?will now be able to access Netflix. SKT and SKB plan to provide an environment where customers can conveniently watch Netflix on smartphones and IPTV (B tv), and will prepare bundled subscription plans. They will also launch Netflix bundle products on SKT’s subscription service T Universe and introduce products related to Netflix’s ad-supported plans. These will be released sequentially starting in the first half of next year. While KT and LG Uplus have offered Netflix bundle products and TV apps, SKT and SKB were unable to launch such services due to the dispute.

[Image source=Yonhap News]

Technical collaboration will also be pursued. Through this partnership, SKT·SKB will explore ways to create consumer-friendly entertainment experiences with Netflix using AI technologies such as conversational UX and personalized guides, which they have accumulated over the past several years. Through this strategic alliance with Netflix, SKT·SKB will expand customer touchpoints from telecommunications to streaming services and be able to offer a variety of products.

Netflix will secure more consumer touchpoints in Korea, which has a high-quality creative ecosystem. It will be able to provide SKT·SKB customers with easier access to a wide range of content genres, including movies, series, entertainment, and documentaries created by Korean and global creators, such as ‘D.P.', ‘Mask Girl', ‘Gilboksoon', and ‘Physical: 100’.

Previously, SKB applied to the Korea Communications Commission in 2019, citing the enormous transmission cost burden caused by the annual surge in Netflix traffic and Netflix’s refusal to negotiate network usage fee payments. Netflix filed a lawsuit in April 2020 at the Seoul District Court seeking confirmation of non-existence of debt, arguing it had no obligation to pay network usage fees. Netflix also contended that using its own content delivery network (CDN), Open Connect Alliance (OCA), could resolve traffic increases. In June 2021, the court ruled in favor of SKB in the first trial. Netflix appealed, and SKB filed a counterclaim, but the recent partnership agreement has shifted the situation to reconciliation mode.

Both parties reached a consensus prioritizing customers above all else. They announced that this partnership would end all previous disputes and that they intend to work together as future-oriented partners.

However, they remained silent on specific contract details such as network usage fee payments. A Netflix representative stated, “We plan to collaborate, including the free deployment of OCA, to ensure a stable customer experience.”

Tony Zameczkowski, Vice President (VP) of Netflix Asia Pacific Business Development, said, “The partnership with SKT·SKB, leaders in Korea’s wired and wireless telecommunications and future-oriented technology industries, is especially meaningful as it will provide a more convenient viewing environment for more Korean members. Since Netflix’s top priority is to deliver the best entertainment experience throughout the journey of creating a special story and reaching screens worldwide, we look forward to the journey ahead working together for our shared customers.”

Choi Hwan-seok, SKT’s Head of Business Strategy, said, “This strategic partnership with Netflix started from SKT·SKB’s philosophy of prioritizing customer value and is the result of a grand agreement to provide better media service environments by integrating technologies accumulated by SKT. We will continue to evolve and develop as an AI company and strive for ongoing mutual cooperation with various domestic and international players.”