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South Korea’s streaming battlefield has become so cutthroat that even Netflix Inc., the world’s largest over-the-top platform, is getting bruised.
As the market matures and subscriber gains slow, OTT players in Korea have unleashed steep discounts, partnerships and even free tiers, dragging down industry revenue and squeezing Netflix’s profitability in one of Asia’s most sophisticated streaming markets.
Korea’s OTT market, long one of the fastest-growing in Asia, has begun to level off.
Paid OTT usage reached 59.9% in 2024, up only modestly from 55.9% in 2022, according to the country’s communications regulator’s recent survey, signaling that household adoption is nearing its limit.
With growth slowing, streaming platforms have turned to aggressive user-acquisition tactics.
A MATURING MARKET DRIVES PLAYERS INTO A CASH-BURNING FIGHT
Homegrown players such as TVing and Coupang Play have rolled out discount bundles tied to mobile and internet plans, e-commerce memberships and food-delivery apps.
Especially, Coupang Play, offered by the country’s e-commerce giant Coupang Inc., intensified the fight in June by opening its entire platform to all users for free, as long as they watch ads.
The result has been a steady erosion of average revenue per user (ARPU), a key indicator of how much a streaming platform earns from each subscriber. ARPU has been falling across the industry.
Data from Hankyung Aicel showed on Sunday that ARPU at major OTT platforms, including Netflix and TVing, has been declining for months.
Netflix’s estimated monthly credit-card spending per user in Korea fell to 14,454 won ($9.93) in October, marking its second straight decline.
ARPU had recovered briefly after Netflix raised prices in May, but it resumed its slide as more subscribers shifted into lower-margin plans and bundled offerings.
One of the biggest drivers of that shift is Netflix’s partnership with Naver Corp.’s Naver Plus, which offers users access to Netflix for 4,900 won a month.
A survey by Seoul-based market research firm Consumer Insight found that 27% of Korean Netflix subscribers in the first half of this year came through Naver’s discounted membership, a share large enough to significantly dilute Netflix’s direct-billing revenue.
NETFLIX’S KOREA PROFITABILITY TAKES A HIT
The financial impact is increasingly visible in Netflix’s figures.
Hankyung Aicel estimates that Netflix Services Korea, the local subsidiary of the global streaming leader, recorded 421.1 billion won in credit-card billings from January through October, a 9.1% drop from a year earlier.
The decline was driven by a rapid shift away from full-price subscriptions toward cheaper ad-supported and bundled plans.
Netflix Services Korea has also seen overall profitability shrink.
The unit generated 17.4 billion won in operating profit last year on revenue of 899.7 billion won, resulting in an operating margin of just 1.9%.
That compares with 2.7% in 2021, before the company introduced its ad-supported tier and began rolling out discounted partnerships.
Analysts say the margin pressure stems from a shrinking base of high-value customers.
“The shift toward discounted bundles has led to a noticeable drop in high-margin, directly billed subscriptions,” said Park I-kyung, an analyst at Hankyung Aicel.
“The aggressive expansion by Coupang Play and TVing leaves Netflix little room to raise prices in the near term.”
LOCAL RIVALS GAIN MUSCLE WITH SPORTS AND BUNDLES
Over the period, domestic rivals have rapidly gained ground.
According to Seoul-based app analysis firm Mobile Index, Coupang Play attracted 7.96 million monthly active users in recent months, while TVing drew 7.65 million. Their combined reach now exceeds Netflix’s 15.04 million users in Korea.
TVing experienced a surge during the baseball postseason, becoming the first domestic OTT platform to surpass 8 million monthly active users during the 2024 KBO League season, for which it holds exclusive broadcast rights.
The company has also invested heavily in original programming and accelerated its expansion overseas to maintain momentum beyond the sports calendar.
Coupang Play is doubling down on premium sports content that has begun to reshape Korean viewing habits.
The service paid 420 billion won last year for six seasons of English Premier League broadcasting rights and has since added Formula 1, the NBA starting in 2025, and the digital rights to MLS club Los Angeles FC, home to Korean star Son Heung-min.
These costly licensing deals have boosted Coupang Play’s user base but intensified the industry’s cash burn.
TVing’s financials feel the pinch of the escalating fight.
According to its parent company CJ ENM Co., TVing’s third-quarter revenue fell 18.7% year-on-year to 98.8 billion won, while operating losses widened from 7.1 billion won a year earlier to 16.2 billion won this year.
POLICY TAILWINDS AND A LOCAL MEGA PLATFORM
Industry analysts expect that two major forces, such as upcoming policy support for homegrown platforms and the potential creation of a Korean mega OTT, could reshape the competitive landscape in the coming year.
The Korean government has floated new measures aimed at strengthening domestic streaming companies, a policy direction that could involve various forms of industry support.
Any such shift would add pressure on foreign platforms at a time when their margins are already under strain.
The long-discussed merger between TVing and Wavve remains in limbo but also continues to loom large over the market’s future.
If completed, it would combine Korea’s largest cable-channel catalog with its most extensive broadcast-library offering.
Mobile Index data show that the two platforms together draw nearly 12 million monthly active users, still trailing Netflix, but large enough to alter content bargaining power and intensify competition for local subscribers.
Analysts say the combination of stronger policy backing and the emergence of a consolidated domestic platform could meaningfully reshape the market.
“Rivalry has intensified sharply as TVing and Coupang Play have rapidly expanded since 2024,” said Kim Gyu-yeon, an analyst at Mirae Asset Securities.
“Each player’s differentiated strategies and the government’s support for domestic OTT platforms are expected to be a key turning point for the market.”
