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Charting South Korea’s OTT Industry: A 10-Year Retrospective and 2025 Forecast

General Report May 20, 2025
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TABLE OF CONTENTS

  1. Summary
  2. A Decade of Growth in the South Korean OTT Market
  3. Policy Landscape and the Case for Integrated Legislation
  4. 2025 Market Outlook and Strategic Shifts
  5. Conclusion

1. Summary

  • The South Korean OTT market has undergone a remarkable transformation since the entry of Netflix in 2016, which catalyzed a vibrant competitive landscape previously marked by limited expansion. By late 2024, the market recorded an impressive revenue of approximately 6.1 trillion KRW, alongside a substantial uptick in monthly active users (MAU), estimated to be between 33 and 36 million. This growth trajectory can be attributed to several strategic advancements, including increased content diversity and the introduction of ad-supported business models by domestic platforms. As stakeholders evaluate their current positions amidst slowing growth rates, there emerges a pressing need for innovative strategies, particularly in the realms of sports and local variety content, which are seen as essential to maintaining engagement and profitability in the evolving market environment. Historically significant milestones, such as the consolidation among platforms and the resultant shifts toward global content distribution, showcase the continued evolution of South Korea's OTT sector, underlining the impact of digital policy on both current dynamics and future potential.

  • Despite the impressive growth, industry representatives are expressing concerns over the existing policy framework, which they argue falls short of supporting sustainable growth and independence from international giants like Netflix and Disney+. The perceived inadequacy of current regulations has raised alarms about the viability of domestic players, prompting calls for an integrated legislative approach that specifically addresses the unique challenges faced by local OTT services. Insights from various industry leaders highlight that without a cohesive policy framework, the risk of deepening market dependency on dominant global entities will only escalate, jeopardizing the future of local content creation and distribution. For 2025, operators are setting their sights on profitability with a renewed focus on ad-supported models and a concerted effort to enhance domestic competitiveness, aiming for a unified regulatory environment that could pave the way for robust long-term growth.

2. A Decade of Growth in the South Korean OTT Market

  • 2-1. Netflix’s 2016 market entry

  • The South Korean over-the-top (OTT) market began its rapid expansion in 2016, notably marked by Netflix's entry into the market. This event is often considered the catalyst for the establishment of a competitive OTT landscape in South Korea, which had previously seen limited development in this arena. Netflix's introduction not only democratized access to a plethora of international content but also spurred local providers to innovate and enhance their offerings to compete against the global giant. The immediate response from domestic players was significant; platforms like 티빙 (TVING) and 웨이브 (WAVE) began reconfiguring their content strategies and pricing models to attract subscribers in a landscape suddenly ripe with competition. By the end of 2024, as the market approached its tenth anniversary, the effects of Netflix's entry were evident in the surge of both revenue and monthly active users (MAU), making it a watershed moment in South Korea's digital media landscape.

  • 2-2. Revenue and MAU evolution

  • As indicated in recent industry reports, the South Korean OTT market has grown to approximately 6.1 trillion KRW by late 2024. This explosive growth is closely tied to the rise in monthly active users, which is now estimated to be between 33 and 36 million. This surge is attributed to several factors, including the diversification of content, strategic partnerships, and the implementation of ad-supported models by various providers in an effort to enhance profitability. Although the MAU figures reflect a high level of engagement, industry insiders have noted a slowdown in growth rates, prompting a reevaluation of business strategies among OTT players. For instance, platforms have started exploring the introduction of new revenue streams and content strategies, particularly through sports and local variety content.

  • 2-3. Key milestones over ten years

  • Looking at the trajectory of South Korea’s OTT industry over the last decade, several key milestones stand out. The initial entry of Netflix in 2016 opened the floodgates for a diverse range of platforms, each vying for market share. Notable developments included the introduction of advertisement-supported models by domestic players like 티빙 and 쿠팡플레이, as they sought to close the competitive gap with Netflix after its traditional subscription model. Furthermore, there has been significant consolidation within the industry; partnerships and mergers such as that of 티빙 and 웨이브 highlight an evolving market aiming for sustainability and scale. The landscape has not only grown domestically but has increasingly oriented itself towards global content distribution, as South Korean platforms explore pathways to adapt local narratives for international audiences. Each of these milestones underscores the importance of adaptability and innovation in maintaining a competitive edge in an ever-evolving digital media environment.

3. Policy Landscape and the Case for Integrated Legislation

  • 3-1. Current support gaps

  • The South Korean OTT industry faces substantial challenges due to inadequate policy support, which industry experts argue is critical for fostering a competitive and sustainable environment. As articulated during a recent seminar marking the ten-year anniversary of South Korea's OTT sector, there is a perception that policies in place are insufficient to provide tangible benefits to domestic operators. The shortage of structural support has left local platforms vulnerable to market dependency on global giants such as Netflix and Disney+, raising concerns about their long-term viability.

  • Leading voices in the industry have emphasized that without an integrated legislative framework that addresses the specific needs of domestic OTT services, the risk of becoming subordinate to foreign platforms will continue to grow. This scenario is exacerbated by the rapid technological advancements and shifting consumer preferences that characterize the evolving digital landscape.

  • 3-2. Risks of market dependency

  • One critical risk highlighted in discussions surrounding the South Korean OTT landscape is the potential for market dependency on international content providers. As noted, local operators have made strides in terms of content creation; however, they lack a strong distribution infrastructure that can compete at the global level. The absence of a Korean platform with robust international reach results in a situation where valuable local content struggles to be effectively marketed and monetized outside of Korea.

  • Industry analysts argue that this market dependency not only threatens domestic content creators but could also hinder the country's ability to leverage its rich cultural assets on a global stage. The need for a cohesive policy that facilitates the growth of local platforms, while also fostering partnerships that enhance their global reach, is paramount.

  • 3-3. Proposals for unified legal framework

  • To address the existing support gaps and mitigate the risks associated with market dependency, several proposals for a unified legal framework have been put forth by industry stakeholders. These proposals aim to construct a more inclusive regulatory environment that enhances transparency and fosters collaboration among OTT providers, content creators, and regulatory bodies.

  • One of the key recommendations includes the establishment of clear standards for content distribution and monetization that apply uniformly across all platforms. Such regulations would not only enhance fair competition but also ensure that domestic platforms can thrive amidst fierce competition from their international counterparts. Additionally, stakeholders stress the importance of government-backed funding initiatives designed to support innovation and incentivize the growth of local content production.

  • As articulated in findings from a recent industry forum, there is an urgent need to implement these integrative legal measures to nurture a sustainable OTT ecosystem in South Korea, capable of competing globally and protecting the interests of domestic players.

4. 2025 Market Outlook and Strategic Shifts

  • 4-1. Projected 2025 market size

  • As of May 2025, the South Korean OTT market is expected to have reached a significant milestone, with projections indicating a total market size of approximately 6.1 trillion KRW. This substantial growth reflects a continued upward trajectory since Netflix's entry into the market in 2016, which catalyzed rapid expansion within the industry. The anticipated market size indicates not only resilience but an adaptability of the sector despite emerging challenges and competition.

  • 4-2. Focus on profitability and ad-support

  • In 2025, a marked emphasis on profitability is expected to dominate the strategies of South Korean OTT platforms. Reflecting a broader trend seen globally, local services are shifting from purely subscription-based models to ad-supported frameworks. For instance, Tving had already initiated an advertising tier to enhance revenue streams, following Netflix's initial foray into the ad-supported model. This shift engenders potential diversification of content, enabling platforms to cater to broader demographics while reducing dependency on subscription revenues.

  • 4-3. Expansion into sports and variety

  • The expansion into sports and variety content emerges as a strategic focal point for OTT platforms in 2025. Industry experts predict that platforms will increasingly invest in live sports broadcasting and original variety shows as a means of differentiating themselves in a competitive landscape. This trend is corroborated by evidence suggesting that platforms like Tving and Coupang Play have started to narrow the gap with Netflix through these content offerings, which are attracting substantial viewership and engagement. The prioritization of live sports rights will likely escalate competition among domestic players and may also prompt partnerships or bidding wars for exclusive content.

  • Given the escalating demand for sports content among younger audiences, integrating such offerings into OTT portfolios not only addresses user preferences but also enhances platforms' competitive positioning against traditional networks.

  • 4-4. Strengthening domestic operators

  • The landscape in 2025 will likely witness a concerted effort towards strengthening domestic OTT operators amid increasing concerns regarding competition with global giants like Netflix. Strategies are being discussed that involve enhancing regulatory frameworks to provide more solid support for local entities. The proposed consolidation between platforms like Tving and Wavve aims to facilitate this process by creating a more formidable entity capable of competing on an international scale. Furthermore, concerted governmental measures, such as subsidies and support for content creation, are essential to ensuring the robustness of local OTT services in light of the fragmented policy environment illustrated in current discussions. This ongoing evolution marks a critical juncture for domestic platforms to innovate and scale effectively, thereby fortifying their market positioning as they strategize for the global stage.

Conclusion

  • In reflecting on a decade of progress, it is evident that South Korea’s OTT industry has evolved into a multifaceted sector characterized by substantial revenue generation and user engagement. Nevertheless, the fragmentation in policy support leaves many domestic operators vulnerable, necessitating urgent advocacy for an integrated legislative framework. Such developments are crucial for mitigating dependency on international content providers, safeguarding local interests, and facilitating fair competition in the market. With 2025 poised to be a pivotal year for the industry, the shift towards ad-supported models and strategic investments in diverse content types, particularly in sports and variety entertainment, signify an adaptive response to evolving market demands and consumer preferences. However, these strategies must be underpinned by collaborative government-industry measures that establish unified standards for content distribution, foster innovation, and bolster local content creation through targeted funding initiatives.

  • As South Korea continues to navigate the complexities of its OTT landscape, the importance of establishing a cohesive and supportive regulatory environment cannot be understated. This environment will not only bolster the competitive positioning of domestic platforms but also facilitate their pathways toward international expansion. The upcoming reforms are thus not merely about sustaining current growth but are, more importantly, about positioning the South Korean OTT industry to thrive globally in an increasingly interconnected digital economy. Stakeholders are now on the cusp of not just redefining local dynamics but potentially influencing global standards in the rapidly evolving OTT landscape.

Glossary

  • OTT: OTT stands for 'Over-The-Top, ' referring to the delivery of content over the internet without requiring users to subscribe to a traditional television service. This model allows for streaming services like Netflix, which have significantly shaped the media landscape since their entry into various markets.
  • MAU: MAU, or Monthly Active Users, represents the total number of unique users who engage with a service over a month. As of late 2024, South Korea's OTT market recorded approximately 33 to 36 million MAU, indicating a strong user base despite recent growth slowing.
  • Ad-supported Model: An ad-supported model refers to a business strategy where content is offered for free to users in exchange for viewing advertisements. As of 2025, many South Korean OTT platforms, including Tving, are shifting towards this model to diversify revenue streams and reduce reliance on subscription fees.
  • Digital Policy: Digital policy involves regulations and initiatives aimed at governing digital content and services. The current landscape in South Korea emphasizes the need for a cohesive digital policy framework that supports the growth of local OTT services and ensures fair competition against global giants like Netflix.
  • Legislation: Legislation in the context of the OTT industry pertains to the set of laws governing content distribution, monetization, and competition. As stakeholders have highlighted in 2025, existing policies are deemed inadequate, necessitating integrated legislation to help domestic OTT players thrive and innovate.
  • Domestic Competitiveness: Domestic competitiveness refers to the ability of local OTT platforms in South Korea to effectively compete with international players such as Netflix and Disney+. It encompasses factors like content quality, diversification, pricing strategies, and the necessity for supportive regulatory frameworks to enhance growth.
  • 2025 Outlook: The 2025 Outlook refers to projections about the future performance of the South Korean OTT market as discussed by industry stakeholders. This includes expectations around profitability, market size, and strategic shifts in content offerings, particularly towards ad-supported models and sports content.
  • Support Measures: Support measures comprise actions or policies proposed to assist local OTT services, including funding, subsidies, and regulatory adjustments. Such measures are seen as crucial for sustaining the growth of domestic competitors against international media conglomerates.
  • Sports Content: Sports content refers to the broadcasting of live sports events, highlights, and related programming. In 2025, various South Korean OTT providers are expected to invest significantly in this area to enhance viewer engagement and compete effectively against traditional television networks.
  • Consolidation: Consolidation in the OTT industry refers to the merging or partnering of companies to create larger entities capable of greater competition. Recent developments include notable partnerships among local platforms to strengthen their market presence and improve operational efficiencies.
  • Market Size: Market size indicates the total revenue potential of a given industry. As reported in 2025, the South Korean OTT market size is expected to reach approximately 6.1 trillion KRW, reflecting substantial growth since Netflix's introduction in 2016.

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