Korea’s OTTs review matching Netflix’ ad-supported model

South Korea’s homegrown media streaming companies are readying ad-based subscription policy to match Netfix, the multinational streamlining giant set to release an ad-based subscription option.

According to sources from the local ad-tech industry, Korean over-the-top (OTT) media service providers including Wavve and Tving have been collaborating with ad-tech firms to adopt the ad-based subscription model.

Ad-tech agencies provide software and digital tools for digital advertising.

Local OTT firms have been working with ad-supported models even before Netflix announced launching the ad-supported plan in Korea, said an industry source. Some are already ready to immediately add the option.

Netflix is due to launch an ad-supported plan, which costs 5,500 won ($3.82) a month, in Korea and 4,000 won cheaper than the ad-free basic plan. Its ad-supported plan has commercials run for an average of five minutes per hour before or during playing films and series.

Although local streaming firms are actively prepping for ad-based plans, their actual market launch is expected to take a while since local firms need to concentrate on expanding their business rather than diversifying operations.

Local OTT firms have only a few million subscribers, far less compared to global giant Netflix that boasts 233 million subscribers across the world as of the third quarter this year.

The top priority for Korean OTT firms now is expanding their business beyond Korea, like in Japan and Southeast Asia, said an industry expert.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]