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A Decade of OTT in Korea: Growth, Policy Gaps, and the 2025 Outlook

General Report May 18, 2025
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TABLE OF CONTENTS

  1. Summary
  2. Chronology of Korea's OTT Industry over the Last Decade
  3. Current Market Landscape and Performance
  4. Policy and Regulatory Support: Gaps and Recommendations
  5. 2025 OTT Market Outlook
  6. Conclusion

1. Summary

  • As of May 18, 2025, the South Korean OTT industry has celebrated a decade of substantial transformation that began with Netflix's entry into the market in January 2016. This foundational event catalyzed an expansion that has led to a projected market size of approximately 6.1 trillion KRW as of 2024, underscoring the vibrant growth dynamics of the sector. The competitive landscape has matured significantly, characterized by the emergence of local players like Tving and Wavve, which have begun to reshape their strategies to attract an increasingly engaged viewer base. By 2024, the Monthly Active Users (MAU) within this ecosystem reached between 33 and 36 million, revealing the high engagement levels in a market that has been exposed to diverse content offerings since its inception. Nonetheless, there are growing concerns about market saturation and the need to diversify service offerings in light of evolving viewer preferences.

  • The industry has demonstrated robust growth capabilities, yet experts reveal critical gaps in regulatory support that jeopardize the sustainability and competitiveness of local OTT services. During forums, including one held on October 23, 2024, stakeholders voiced concerns about the absence of an integrated legal framework that adequately addresses the unique challenges faced by domestic OTT providers. This legislative gap poses a risk of dependency on international players like Netflix, thereby threatening local market sovereignty. As such, the industry is at a crossroads, with increasing calls for comprehensive policies that would not only bolster local content creation but also encourage equitable competition against global entrants. Looking ahead, the transition towards ad-supported models and an increased focus on entertainment and sports content are positioned to reshape the future direction of the market, responding to the need for diversified revenue streams and enhanced viewer engagement.

2. Chronology of Korea's OTT Industry over the Last Decade

  • 2-1. Netflix’s entry in 2016 and market genesis

  • The entry of Netflix into the South Korean market in January 2016 marked a significant turning point for the country's over-the-top (OTT) services. This event not only catalyzed the development of various domestic platforms but also initiated a competitive landscape that has evolved over the years. Netflix's introduction disrupted traditional viewing habits and established SVOD (Subscription Video on Demand) as a dominant model in the South Korean media consumption ecosystem. Following its launch, there was a marked increase in subscription services, leading to a surge in market interest and investments from both domestic and international companies.

  • As of 2024, the South Korean OTT market was projected to reach approximately 6.1 trillion KRW, reflecting a rapid expansion fueled by investments initiated by the presence of major players like Netflix. The profound impact of this competition was evident, with local platforms such as Tving and Wavve beginning to shape their offerings to include original content and localized programming aimed at drawing in subscribers who were previously inclined towards global platforms.

  • Notably, in a forum held on October 23, 2024, to commemorate a decade since Netflix's launch in Korea, industry experts emphasized the need for regulatory support to ensure a balanced market. They pointed to the fact that local players were struggling to match the scale and reach of global incumbents, a situation that prompted calls for more robust structural support from authorities.

  • 2-2. Early domestic entrants and first-mover dynamics

  • In the years following Netflix's entry, several domestic OTT services emerged, notably Tving and Wavve, which sought to capture a portion of the audience that was increasingly turning to digital platforms for content consumption. Tving, in particular, rapidly innovated its offerings by introducing licensing agreements for sports and entertainment content, differentiating itself from Netflix's library, which primarily emphasized films and scripted series.

  • The competitive dynamics created by the rapid emergence of these platforms led to a 'first-mover' advantage scenario, wherein early entrants developed unique value propositions to attract subscribers. For instance, Tving’s integration of live sports and entertainment programming allowed it to differentiate itself in a crowded marketplace. Such strategies became critical for domestic players as they faced the daunting task of competing against a well-established global brand.

  • As of 2024, Tving and other local services began adopting ad-supported models in response to pressures for profitability, indicating a strategic pivot towards maximizing revenue streams amidst the competitive landscape. This evolution highlights the gradual shift in focus from subscriber acquisition to retention and profitability, reflecting a maturing market.

  • 2-3. Milestones in subscriber growth and platform launches

  • Over the last decade, South Korea’s OTT industry has celebrated significant milestones in subscriber growth, driven largely by the competitive introductions of innovative platforms. By 2024, it was reported that the monthly active users (MAU) for the combined local and global OTT platforms fluctuated between 33 to 36 million, showcasing the explosive growth trajectory that was forecasted following the initial market disruption.

  • Specific landmarks in subscriber milestones included Tving's achievement of approximately 3 million subscribers by mid-2024, a notable accomplishment considering its operational timeline relative to that of Netflix. This growth was attributed to its strategic selection of content offerings, including a mix of original programming, local productions, and popular international titles.

  • The need for continuous innovation became apparent as the market witnessed consolidation activities, including discussions around potential mergers between Tving and Wavve, which aimed to create a formidable local player capable of challenging Netflix more effectively. This period was characterized by ongoing adjustments from existing platforms to adapt to competitive pressures and changing viewer preferences.

3. Current Market Landscape and Performance

  • 3-1. 2024 market size projection (6.1 trillion KRW)

  • As of May 18, 2025, the Korean OTT market is continuing to experience significant growth, having been projected to reach a size of 6.1 trillion KRW in 2024. This substantial market size illustrates the sector's robust development over the past decade, primarily driven by the entry of global players like Netflix and the emergence of strong local competitors. The cumulative investments into content production, platform enhancements, and user acquisition strategies have underpinned this expansion, reflecting an overall positive outlook for the industry.

  • 3-2. Monthly active users trends

  • The Monthly Active Users (MAU) count for the Korean OTT platforms has been notably strong, oscillating between 33 million to 36 million users. This statistic emphasizes the high engagement levels among viewers, indicating a firm consumer base that has increasingly gravitated toward OTT content since the launch of Netflix in Korea in 2016. However, stakeholders are aware that while user numbers have risen, there are indications of market saturation, leading to a potential slowdown in growth. As such, platforms are now focusing on enhancing content quality and diversifying service offerings to retain existing users and attract new ones.

  • 3-3. Competitive dynamics between global and local platforms

  • The competitive landscape of the OTT market in Korea is intensifying, with both local and global platforms sharpening their strategies. Notably, local services such as Tving and Wave are consolidating through potential mergers to better position themselves against dominant players like Netflix. The recent introduction of ad-supported subscription models by Tving is a strategic response to the challenges of profitability, indicating a shift towards more diverse revenue streams. Collaboration between competitors, such as co-producing content with Netflix, is anticipated to increase as local platforms seek to leverage shared resources to boost their market position. This evolving dynamic underscores the need for adaptive strategies that balance competition with collaborative opportunities in content development.

4. Policy and Regulatory Support: Gaps and Recommendations

  • 4-1. Lack of integrated OTT legislation

  • The absence of a cohesive regulatory framework for the Over-The-Top (OTT) sector in South Korea remains a significant barrier to the industry's growth and sustainability. Currently, there is no integrated legislation that addresses the unique challenges faced by local OTT providers. This regulatory gap has been highlighted by experts during various forums, including significant discussions held on October 23, 2024, at the National Assembly. According to speakers at the forum, including digital industry leaders, without robust legal provisions, the industry risks stagnating and becoming overly reliant on foreign platforms such as Netflix, which dominate the market.

  • The calls for comprehensive legislation are critical as local OTT platforms require equitable conditions to compete effectively. Without legal structures that cater specifically to the digital nature of OTT services—covering everything from content distribution to monetization strategies—South Korea's domestic players will struggle to innovate and grow. The advocacy for urgent legislative reform emphasizes a need for policies that not only support current industry players but also encourage new entrants.

  • 4-2. Risks of market dependency on global players

  • The reliance on international OTT services poses a notable risk to the South Korean market, as highlighted in recent assessments. Domestic providers are facing increasing pressure due to the significant market share held by global giants like Netflix. As of May 2025, Netflix remains the dominant player with the highest number of daily active users (DAU), significantly outpacing local competitors. This dependency raises concerns regarding content sovereignty and economic stability within the local industry.

  • Expert analyses warn that continued dependency on global entities could lead to adverse effects on the national economy and cultural output. Therefore, fostering an environment that encourages local platforms to flourish is essential. This includes implementing fair practices that deter monopolistic behaviors by foreign companies, thus ensuring local businesses can thrive without being overshadowed by larger entities. The integration of protective legislation could mitigate these risks, empowering local platforms to compete on more favorable terms.

  • 4-3. Calls by Kim Wooyoung’s office and Korean OTT Forum

  • Kim Wooyoung, a prominent figure in advocating for the domestic OTT sector, has continuously emphasized the need for substantial policy interventions that support local content creation and distribution. His office, along with stakeholders from the Korean OTT Forum, has been vocal in stressing the urgency of developing a regulatory framework that not only protects but also promotes local creative industries. This call to action is reflective of a broader recognition among legislators and industry experts about the fragility of the current OTT landscape, where local platforms risk being inundated by international competition.

  • At the recent forum, discussions focused on potential paths forward, including recommendations for enhancing funding for domestic content creation and establishing partnerships within the industry to create competitive content offerings. The consensus is clear: a strategic, coordinated effort involving regulatory bodies, industry stakeholders, and policymakers is essential for revitalizing and sustaining South Korea's OTT market in the long term.

5. 2025 OTT Market Outlook

  • 5-1. Shift from No-Ad Models to Ad-Supported Services

  • As the OTT market continues to evolve, a significant transition is anticipated in 2025 from subscription-only models to a broader adoption of ad-supported services. This pivot is reflective of market trends where platforms are increasingly recognizing the need for diversified revenue streams to enhance profitability. According to insights from the recent National Assembly forum held on October 23, 2024, industry stakeholders predict that platforms like Tving and Coupang Play will follow Netflix's lead in implementing advertising tiers as a strategy to attract and retain users.

  • Analysts suggest that this shift will not only help in generating additional revenue but also enhance user engagement by providing varied content options. Such ad-supported services will enable users to access content at reduced or no costs, driving higher viewership and potentially leading to increased advertising revenues. This strategic change is expected to reshape the competitive landscape in Korea's OTT market, fostering an environment where user choice and content diversity flourish.

  • 5-2. Expansion into Entertainment and Live Sports

  • 2025 is poised to witness substantial growth in the offering of entertainment and live sports content across various Korean OTT platforms. With the growing popularity of sports and entertainment, platforms are not just competing for viewers but also looking to carve out significant niches in these genres. As highlighted in the discussions from the aforementioned forum, there is a marked increase in investments aimed at enhancing live sports broadcasting capabilities to capture the interests of sports fans who increasingly favor on-demand streaming services.

  • This transition reflects a broader trend in the market, where traditional sports broadcasting is being complemented by innovative OTT offerings. Tving and Coupang Play, for instance, are predicted to expand their sports coverage significantly, enabling consumers to access live events and exclusive content. This strategic focus on sports is essential for boosting subscriber retention and attracting new audiences to these platforms, which is crucial in an increasingly competitive environment.

  • 5-3. Projected Industry Trajectories and Investment Areas

  • Forecasts for the OTT industry in Korea for 2025 indicate a dynamic landscape influenced by evolving viewer preferences and technological advancements. Experts from the Korean OTT Forum have emphasized that to remain competitive, local OTT platforms must prioritize investments not only in content but also in technology to enhance user experience. Potential areas for significant investment include AI-driven personalization tools, user interface enhancements, and advanced analytics to better understand viewer behavior.

  • Moreover, the anticipated merger of platforms such as Tving and Wave is viewed as a strategic move to boost competitive strength in the global market. Industry veterans argue that such consolidations could create more robust platforms capable of scaling operations and expanding globally, thus reducing reliance on foreign content providers. In this context, collaborative projects between domestic platforms and international creators are expected to gain traction, broadening the semantic reach of Korean content and enhancing its competitiveness on a global scale.

Conclusion

  • In conclusion, the growth trajectory of Korea’s OTT sector, marked by substantive advancements over the past decade, underscores its transition into a multi-trillion-KRW industry attracting tens of millions of active users. As of May 2025, it is evident that while the landscape has been bolstered by global players and fueled by domestic innovations, the discrepancy in regulatory frameworks presents a significant challenge. A coherent legal structure is imperative for nurturing local platforms, reducing dependency risks on foreign services, and promoting content diversification—particularly in the increasingly popular domains of ad-supported offerings and live sports programming.

  • Future strategies must prioritize integrated legislative action coupled with targeted policy support. Industry stakeholders, including policymakers and platform operators, should engage in collaborative efforts to ensure the continued momentum of Korea’s OTT sector into and beyond 2025. Innovations in investment and strategic partnerships will be vital in establishing a competitive edge, enabling local players to thrive amidst fierce global competition. Ultimately, addressing these challenges head-on will not only serve to secure the future of the OTT market in Korea but will also pave the way for a dynamic and resilient digital ecosystem.

Glossary

  • OTT: Over-The-Top (OTT) refers to content delivery via the internet without the need for traditional cable or satellite services. This model includes platforms like Netflix and local alternatives, allowing users to stream videos directly from the web.
  • Netflix: Netflix is a leading global OTT service provider that began offering its services in South Korea in January 2016. It has played a critical role in shaping the Korean OTT market, driving competition and influencing viewing habits.
  • Korean OTT: Korean OTT refers to domestic streaming services in South Korea, such as Tving and Wavve, that provide video-on-demand content, competing against international players like Netflix. These platforms are characterized by their integration of local content and innovative offerings.
  • Market Size: The market size of the Korean OTT sector is projected to reach 6.1 trillion KRW as of 2024. This measure indicates the total value of the market based on subscriptions, advertising revenues, and overall consumer engagement within the industry.
  • MAU: Monthly Active Users (MAU) is a metric used to quantify the number of unique users engaging with a service within a month. As of 2024, the Korean OTT market had an MAU count between 33 million and 36 million, indicating high viewer engagement.
  • 10th Anniversary: The 10th Anniversary of the South Korean OTT market, marked by the National Assembly forum on October 23, 2024, celebrated the decade since Netflix's entry into the market, reflecting on the industry's expansion and future needs.
  • Legislation: Legislation refers to laws and regulations governing the OTT industry. Currently, there is a noted lack of integrated legislative support for local OTT platforms in South Korea, which poses challenges for their competitiveness against global entities.
  • Policy Support: Policy support entails governmental actions and strategies aimed at fostering the development of local OTT services. Current calls for better policies focus on creating a fair competitive environment and supporting local content creation.
  • Ad Model: The ad model refers to a type of revenue generation strategy where platforms offer content for free or at a reduced cost in exchange for advertising. A shift towards ad-supported services is expected in 2025 as platforms seek additional revenue streams.
  • Sports Content: Sports content refers to programming focused on live sports events and related entertainment. The increasing investment in sports offerings by local OTT platforms aims to capture a growing audience of sports fans.
  • Competition: Competition in the OTT market refers to the rivalry among streaming service providers, both local and international, to attract and retain viewers. This competitive landscape has intensified since Netflix's arrival in 2016.
  • Kim Wooyoung: Kim Wooyoung is a notable advocate for the domestic OTT sector in South Korea. His office has been instrumental in pushing for policy changes that support local platforms and address market challenges posed by global players.

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