Founder of AfreecaTV Targets Twitch Over 'Network Usage Fee Burden'

Seo Sugil CBO Criticizes Directly on Streaming Broadcast

AfreecaTV founder and Afreeca CBO Seo Su-gil recently targeted Twitch, which abruptly announced its withdrawal from the Korean market citing the 'burden of network usage fees' as the reason.

Seo Sugil, Founder and CB of AfreecaTV / Photo by AfreecaTV

Seo Su-gil, who has been active as 'BJ KevinUP' on AfreecaTV since 2017, showcased content on the 13th where he had a conversation while eating Korean beef with BJs Yoo Eun, Goto, and Hyeming.

He stated, "They say they are withdrawing from Korea because of network usage fees while running at a loss and unable to continue the business, but they mindlessly copied that and said they quit the Korean business because of network usage fees," adding, "That’s not true. AfreecaTV won. Our BJs, our citizens, and our users won."

He also pointed out, "Korea is the only country in the world where Twitch and YouTube cannot do live broadcasts," and criticized, "They are distorting the essence by talking about 'Chijijik' which hasn’t even been launched yet." Chijijik (CHZZK, tentative name) is a new game streaming service that Naver plans to launch next year.

He continued, "Reveal the network usage fees," and added, "Last year, Twitch reported 1.8 billion KRW, but since they are running at a loss, they are not paying taxes. Because there is no revenue, that’s why."

On the 6th, Twitch Korea announced on its official blog that "As of February 27, 2024, we have decided to terminate Twitch business operations in Korea," adding, "Afterwards, Korean viewers will no longer be able to purchase Twitch paid products, and streamers will not be able to generate revenue through Twitch."

The publicly stated reason by Twitch is the excessive cost due to network usage fees. The company said, "The cost of operation in Korea is at a seriously high level," and "We tested a P2P model related to video quality and then adjusted the maximum quality to 720p." It added, "Although we were able to reduce costs somewhat, the network fees in Korea, which are ten times higher than in other countries, made operation impossible."

Twitch has criticized network usage fees in Korea since 2022. In October last year, Twitch limited the maximum resolution of domestic viewing quality from 1080p to 720p, citing cost issues. In November of the same year, it also stopped its video-on-demand (VOD) service. Twitch, which had rapidly grown by providing ultra-high-definition 4K resolution service since entering the Korean market in 2015, saw streamer departures triggered by the sudden quality restrictions.

Market analysts suggest that besides network usage fees, intensified competition to attract streamers and concerns about usability also played a role. In fact, Coupang operates ‘Coupang Play,’ a video streaming service for Wow Membership members, free of charge while bearing traffic costs. Domestic platforms including the native company AfreecaTV and other domestic and international platforms also pay all costs.

Meanwhile, Seo Su-gil, CBO, announced plans to establish a global platform in March next year, changing the company name to ‘SOOP’ and renaming Korean AfreecaTV to SOOP.Korea. An AfreecaTV official explained, "The direction is correct, but discussions are ongoing regarding the specific timing and other details."