Domestic and International OTT Fees Raised Simultaneously... The Era of Fierce Competition Has Begun

OTT Companies Raise Fees and Crack Down on Account Sharing
Burden on Multiple Subscribers Increases, Cancellation Likely ↑
Concerns Over Winner-Takes-All Structure

[Image source=Yonhap News]

Domestic and international online video services (OTT) such as Netflix, TVING, and Disney Plus are simultaneously raising their subscription fees. As the so-called 'streamplaytion (streaming + inflation)' becomes a reality, the burden on multi-OTT subscribers is increasing. With the likelihood of users canceling subscriptions and keeping only one or two OTT services growing, competition among OTT companies to retain churners through content is expected to intensify.

Netflix, which has the largest number of global subscribers, started charging for account sharing from the 2nd of this month. Users who shared accounts with friends or family members living separately must now pay an additional 5,000 KRW per account. This is effectively a price increase.

Disney Plus, which previously operated on a single monthly fee of 9,900 KRW, has segmented its plans into Standard (9,900 KRW/month) and Premium (13,900 KRW/month). Existing users must switch to the Premium plan to continue enjoying high-definition (4K) content simultaneously on four devices per account. The native OTT TVING will also raise monthly fees by 1,600 to 3,100 KRW for new subscribers starting next month.

As OTT providers continue to raise prices, the burden on multi-subscribers has grown. Users who subscribed to two or three OTT services are now more likely to cancel and keep only one or two. According to the 'OTT Report' published last year by the Korea Information Society Development Institute (KISDI), more than half of domestic OTT users were multi-subscribers. In a survey of 1,508 respondents, 60.7% reported using two or more paid OTT services. When asked why they recently reduced the number of subscriptions, 68.4% cited 'cost burden' as the main reason. The reason for not increasing the number of OTT services used was also 'cost burden,' accounting for 45.2%.

Notably, among respondents using Netflix, 42.5% said they would cancel the paid service if they had to pay extra to provide their account to a third party. This suggests that if OTT companies raise fees and crack down on account sharing, the likelihood of users canceling subscriptions could increase.

There are also forecasts that OTT fee hikes could solidify a 'winner-takes-all' structure. Junseok Kang, a KISDI research fellow, said, “Multi-subscription has played a role in alleviating concerns about the formation of a winner-takes-all structure in the domestic paid OTT market,” adding, “If most users subscribe to only one service, a significant number may choose only top-tier services like Netflix, potentially monopolizing the domestic market.”

Therefore, a 'content' war among OTT providers seems inevitable, as only high-quality content can retain subscribers. OTT companies are more actively enhancing their content competitiveness than ever before.

Netflix is aggressively marketing with slogans like ‘What’s Netflix watching these days?’ alongside trillion-won content investments. Disney, the operator of Disney Plus, is increasing its content holdings through active M&A, including the recent acquisition of competing OTT service Hulu.

TVING aims to establish itself as a daily platform where domestic users log in every day and stay longer by strengthening its content strategy. It currently has a lineup of about 160,000 pieces of content, including approximately 6,000 popular original and exclusive episodes, movies, entertainment shows, dramas, and documentaries.