Decade of Streams: Charting South Korea’s OTT Industry and 2025 Outlook

1. Summary

• As of May 16, 2025, South Korea's online video streaming industry marks a decade since the entrance of Netflix in 2016, which was a transformative event for the Over-The-Top (OTT) segment. By the end of 2024, projections indicated that the domestic OTT market would achieve a valuation of KRW 6.1 trillion, demonstrating a healthy growth trajectory fueled by heightened consumer engagement and an expanding base of Monthly Active Users (MAUs) fluctuating between 33 million and 36 million. Despite these promising figures, industry analysts caution that fragmented regulations and inadequate support systems pose significant threats to the competitive positioning of local providers. A comprehensive review of the sector's evolution reveals critical market indicators, identifies gaps in policy and regulation as highlighted in October 2024, and delineates a forward-looking perspective for 2025. Stakeholders during this period are amidst a pronounced pivot toward ad-supported revenue models and enhancing content diversity, signaling a crucial adaptation phase responsive to shifting user preferences and the competitive landscape.

• The evolution of South Korea's OTT sector from 2016 to 2024 illustrates pivotal milestones, including the emergence of platforms like Tving and Coupang Play. The entrance of these players not only provided alternatives to Netflix but also invigorated local competition through innovative business strategies, including ad-supported models designed to resonate with cost-sensitive audiences. The marked trend of consolidation among local platforms, such as the merger between Tving and Wavve, highlights a strategic move towards resource pooling aimed at countering the overwhelming presence of established international competitors. Ultimately, the narrative of the past decade underscores the necessity for significant investment in original content, alongside strategic partnerships, to drive growth amidst increasing market complexities in the South Korean OTT landscape.

• Moreover, as the OTT market matures, the economic ripple effects on the media and advertising sectors are becoming increasingly pronounced. The continuous expansion of streaming services has compelled advertisers to realign their strategies to accommodate the ascending influence of OTT platforms. This trend speaks volumes about the interdependencies that are shaping the future of media distribution and consumption in South Korea. As stakeholders endeavor to navigate these evolving dynamics, a clear understanding of the interplay between market performance, user engagement, and regulatory frameworks will be essential in laying the groundwork for sustainable growth in the OTT industry.

2. Evolution of South Korea’s OTT Landscape (2016–2024)

• 2-1. Netflix’s 2016 market entry

• Netflix's entry into the South Korean market in 2016 marked a pivotal moment for the nation's Over-The-Top (OTT) industry. This expansion introduced a significant shift in consumer behavior as viewers were introduced to streaming content on a scale previously unseen in the region. The arrival of the platform incentivized domestic competition and investment within the streaming sector, prompting both local and international players to expedite their service innovations and content offerings.

• By 2024, it was evident that Netflix's presence had catalyzed growth across various aspects of the OTT market. Statistics indicated that the domestic OTT market was projected to reach a size of KRW 6.1 trillion by the end of 2024, reflecting a robust user adoption rate which fluctuated between 33 and 36 million Monthly Active Users (MAUs). Despite these positive indicators, the growing competition led to substantial investments by local OTT providers, resulting in accumulated deficits as they tried to close the gap with the established giant.

• 2-2. Key milestones in platform launches

• Throughout the span from 2016 to 2024, South Korea witnessed several key milestones in the launch of various OTT platforms. Major players like Tving and Coupang Play emerged as contenders against Netflix, with the former making significant strides in capturing market share. Tving, for instance, implemented an ad-supported revenue model to diversify its income streams, thereby following Netflix’s footsteps while catering to budget-conscious consumers.

• Another noteworthy development includes the merger of domestic platforms like Tving and Wavve, showcasing a trend towards consolidation within the industry. This strategic move indicates a shift towards eliminating competition among local players and pooling resources to effectively compete against larger, global platforms. These milestones signify a transformative phase in the South Korean OTT landscape, establishing foundations for continued evolution beyond 2024.

• 2-3. Industry consolidation and local competitor emergence

• The years leading up to 2024 were marked by significant consolidation within South Korea's OTT industry, as companies sought operational efficiencies and scalability to compete with international entities like Netflix. Domestic players such as Tving and Wavve not only focused on consolidating their platforms, but also on diversifying their content portfolios through partnerships and collaborations with traditional media companies.

• Local entities began embracing innovative strategies including sports broadcasting rights and original content production to enhance viewer engagement and attract new subscribers. This trend illustrates an understanding among Korean OTT providers of the importance of unique content offerings to differentiate themselves in an increasingly crowded market. As of late 2024, the outlook for sustaining growth amidst these consolidations remained cautious, emphasizing the importance of profitability and strategic investment to navigate the dynamics of the global OTT ecosystem.

3. Market Performance and User Engagement

• 3-1. Projected KRW 6.1 trillion market size in 2024

• As of late 2024, the South Korean OTT market was projected to reach a size of KRW 6.1 trillion, reflecting a substantial growth trajectory since Netflix's entry in 2016. This figure marks a significant milestone for the industry, underlining the burgeoning demand for streaming services among consumers. The growth can be attributed to increasing smartphone penetration, greater internet accessibility, and shifting consumer preferences towards on-demand content. The projection highlights an overall expansion in media consumption habits, driven by an appetite for diverse and engaging content.

• 3-2. Monthly Active Users trends

• In the context of user engagement, the total Monthly Active Users (MAU) in the South Korean OTT sector has fluctuated between 33 million to 36 million. This consistent user base reflects both the competitive nature of the market and the varying strategies employed by service providers to capture and retain audiences. Recent trends indicate that while platforms like Netflix have historically dominated, local players such as Tving and Coupang Play are beginning to gain traction through innovative offerings, including the introduction of ad-supported models and exclusive sport programming.

• 3-3. Economic ripple effects across media and advertising

• The escalating size and user base of the OTT industry have triggered significant economic ripple effects throughout related sectors such as traditional media and advertising. As OTT platforms have surged in popularity, advertisers have adjusted their strategies to incorporate digital streaming platforms into their campaigns, recognizing the need to reach diversified audiences across multiple channels. Local OTT providers, encountering mounting operational costs coupled with a demand for profitability, have also started to explore alternative revenue streams, including partnerships and content collaboration, which in turn stimulates competition and innovation while challenging established norms in content distribution.

4. Policy and Regulatory Environment

• 4-1. Shortcomings in current OTT policies

• As of May 16, 2025, the current regulatory framework surrounding South Korea's Over-The-Top (OTT) services has been criticized for its inadequacies in providing substantial support to domestic players. Despite the growth in the OTT sector, experts emphasize that existing policies fail to empower local providers adequately, leaving them vulnerable to international competitors like Netflix. This insufficiency in policy support has prompted calls for a more integrated legislative approach that can effectively respond to the complexities of the rapidly evolving digital landscape. The National Assembly's discussions highlight the immediate need for legislative reforms that ensure equitable competition and foster an environment conducive to local innovation.

• 4-2. Calls for integrated legislation

• Industry veterans have voiced strong support for the establishment of an integrated legislative framework to address the fragmented state of current OTT regulations. The discussion at the Korean OTT Forum on October 23, 2024, illustrated the urgency for cohesive legal measures that can bridge policy gaps and create a robust support system for local OTT providers. Such a legislative shift is necessary not only to level the playing field against dominant global players but also to encourage domestic growth and innovation. The complexity of the OTT industry, which encompasses various content delivering methods from Subscription Video on Demand (SVOD) to ad-supported services, demands a comprehensive policy response that can adapt to its multifaceted nature.

• 4-3. Risks of market dependency and impact on domestic players

• The ongoing debate around the dependency of South Korean OTT providers on global platforms raises significant concerns regarding market sustainability. As local competitors struggle to achieve global recognition, there is an apparent risk of market dependency, where native titles may be overshadowed by international offerings. Observations indicate that while domestic providers have made significant strides, such as Tving's close competition with Netflix in daily active users, their long-term viability hinges on effective policy intervention. Without strategic legislative action, there is a perilous trajectory towards increasing reliance on foreign OTT giants, which threatens to undermine local content creation and distribution capabilities. Addressing these dependency risks through targeted policies will be crucial for ensuring the resilience and competitiveness of South Korea's OTT sector.

5. Outlook for 2025 and Beyond

• 5-1. Shift from ad-free to ad-supported revenue models

• As of May 16, 2025, the trend towards ad-supported revenue models in the South Korean OTT market has significantly gained momentum. This shift is not only a response to the increasing pressure for profitability among providers, particularly following years of substantial investments that have not yet centered on sustainability, but also a proactive measure to adapt to changing consumer preferences. Both Tving and Coupang Play have begun implementing advertising tiers, echoed by recent strategies adopted by global players like Netflix to broaden their revenue streams. This transition indicates a deliberate pivot by domestic players, which have previously resisted such models, signaling a new era of content monetization in response to evolving stakeholder demands for greater revenue generation and lower subscription costs.

• Industry experts anticipate that as ad-supported models become more prevalent, the competitive landscape will continue to evolve. Content creators will likely explore innovative advertising formats, enhancing viewer experiences while providing advertisers with targeted outreach. As the market matures, the integration of advertisements will be essential for firms seeking to enhance their financial viability without sacrificing content quality or user engagement. Furthermore, platform collaboration may emerge, where local OTT providers engage in partnerships with brands and advertisers to create cohesive advertising strategies tailored to the Korean audience.

• 5-2. Expansion into sports and variety programming

• Looking towards the remainder of 2025 and beyond, South Korea's OTT platforms are poised for expansion, specifically into the lucrative domains of sports and variety programming. The sustained interest in these genres is driven by heightened consumer demand for live sports events and engaging entertainment formats. Tving has already initiated this strategy, capitalizing on exclusive rights to broadcast high-profile sports events, thereby narrowing the competitive gap with Netflix, which has more traditionally focused on scripted content.

• This strategy's significance lies in its dual potential: enhancing viewer loyalty and generating diversified revenue streams through subscriptions and ad revenues. As domestic platforms ramp up their investments in original variety shows and sports content, analysts see a pronounced shift in audience engagement, potentially reshaping the viewing landscape. Sports programming, in particular, has the ability to attract younger demographics, which is critical for sustaining subscription growth. The anticipated expansion into these areas may also lead to synergies with traditional broadcasters, enabling a more holistic content offering that aligns with evolving consumer preferences.

• 5-3. Strategies for sustaining growth

• To sustain growth in the competitive OTT market, South Korean platforms will have to adopt multi-faceted strategies that address both content diversification and market expansion. Observations from industry experts highlight that the inefficiencies of current policies and regulatory frameworks necessitate a more robust approach. Key among the strategies proposed is the consolidation of domestic OTT providers to create larger, more resilient entities capable of competing on a global scale. This notion of amalgamation is not merely about increasing market share but is aimed at pooling resources, distributing risks, and expanding the capabilities to produce globally appealing content.

• Moreover, there is a clear indication of an impending legislative shift that will better support domestic providers. Experts have argued for unified legislation to streamline OTT regulations, thus empowering local companies to innovate and scale effectively. Given that a portion of South Korea's economic growth increasingly hinges on its cultural exports, particularly in digital media, aligning regulatory frameworks with market dynamics is imperative. This alignment, coupled with strategic partnerships both domestically and internationally, will be essential to solidifying the position of South Korean OTT services in the broader digital economy moving forward.

Conclusion

• As South Korea's OTT sector transitions into its next chapter post a decade of rapid development, the core issues at stake involve the establishment of cohesive regulatory frameworks and targeted support mechanisms essential for fostering domestic innovation. The implementation of integrated legislation becomes imperative to safeguard local providers against the existential threats posed by dominant international platforms. By addressing existing regulatory deficiencies, South Korea can create a conducive environment for innovation that nurtures local talent and content creation, essential for a resilient OTT ecosystem.

• The shift toward diverse revenue models, particularly the growing inclination towards advertising support in responses to profitability pressures, signifies a crucial evolution within the industry. As Tving and Coupang Play incorporate ad-supported tiers into their offerings, it is vital for industry stakeholders to align their strategies with emerging consumer preferences, maximizing viewer engagement while capitalizing on revenue opportunities. Furthermore, as platforms begin to deepen their investments in exclusive content ranging from sports to original entertainment, a recalibration of strategies will be necessary for sustaining competitive positions in an ever-evolving market landscape.

• Comprehensive policy reforms are not merely an administrative priority; they represent a strategic necessity for engaging with South Korea's cultural exports in digital media. Engaging stakeholders in collaborative discussions will cultivate a shared vision to refine existing frameworks, thereby incentivizing local platforms and preparing them for the projected revenue-model transitions in 2025. By synchronizing regulatory clarity with contemporary market realities, South Korea can firmly establish its leadership in the rapidly advancing landscape of Asia’s digital streaming industry.

Glossary

• OTT: Over-The-Top (OTT) refers to media services provided directly to viewers over the internet, bypassing traditional cable or satellite platforms. Since Netflix's entry in 2016, the OTT industry in South Korea has rapidly expanded, fundamentally changing how audiences access and consume video content.

• Netflix: Netflix is a leading global streaming service known for its extensive library of films, television series, and original productions. Its launch in South Korea in 2016 is credited with catalyzing substantial growth in the country's OTT sector by introducing competitive dynamics and increasing consumer expectations for on-demand content.

• MAU: Monthly Active Users (MAU) is a key metric used to measure the number of unique users engaging with a service within a given month. As of May 2025, South Korea's OTT platforms report fluctuating MAU figures between 33 million and 36 million, indicating a robust level of user engagement.

• Market Size: Market size refers to the total revenue generated by a specific industry. In South Korea, the OTT market size was projected to reach KRW 6.1 trillion by the end of 2024, highlighting the industry's significant growth and the rising consumer demand for streaming services.

• Regulation: Regulation in this context refers to the rules and laws governing the OTT industry in South Korea. As of May 2025, the regulatory framework has been criticized for being fragmented and inadequate, failing to offer sufficient support to domestic OTT providers competing with global giants like Netflix.

• Legislation: Legislation encompasses the legal processes and rules established by government authorities. Calls for integrated legislation in the OTT sector emphasize the need for coherent policies that enhance local providers' competitiveness and innovation in a rapidly evolving digital environment.

• Policy Support: Policy support refers to government measures and incentives aimed at assisting local OTT providers. Experts have noted that without adequate policy backing, South Korean companies may struggle against larger international competitors, hindering local innovation and content creation.

• Domestic Providers: Domestic providers are South Korean OTT platforms, such as Tving and Coupang Play, that compete in the local market. The emergence of these platforms has been essential for fostering competition and diversifying content offerings in response to consumer demand.

• Digital Policy: Digital policy encompasses the strategies and regulations devised to manage the digital economy, including the OTT sector. Effective digital policy is crucial for supporting growth and innovation while navigating the complexities introduced by rapid technological changes.

• Competition: Competition in the OTT sector involves the rivalry between service providers to attract and retain users through content offerings, pricing strategies, and innovative technologies. As of May 2025, domestic platforms are focusing on enhancing their competitiveness amidst the presence of global players like Netflix.

• Ad-supported Models: Ad-supported models are revenue frameworks wherein OTT platforms generate income through advertisements displayed during content streaming. As of May 2025, there is a notable shift towards these models among South Korean providers, reflecting changes in user expectations and profitability pressures.

• Consolidation: Consolidation refers to the merging of companies within an industry to create larger, more competitive entities. In South Korea's OTT landscape, consolidations like the merger between Tving and Wavve exemplify strategic efforts to pool resources and enhance competitive positioning against global giants.

• Economic Ripple Effects: Economic ripple effects refer to the broader impacts that changes in one sector have on related industries, such as media and advertising. The growth of the OTT market in South Korea is influencing how advertisers strategize campaigns, reflecting a need for adaptation to shifting consumer behaviors.

• Integrated Legislative Framework: An integrated legislative framework involves comprehensive laws and regulations designed to harmonize disparate policies, particularly in the OTT industry. Industry experts argue that such frameworks are necessary for supporting local providers and fostering an environment conducive to innovation.

Source Documents

• 내년이면 10년…국내 OTT 산업이 나아갈 길은https://n.news.naver.com/mnews/article/032/0003328074
• 국내 OTT 산업, 실질 지원 미흡…“통합법제 마련 ‘시급’”http://www.srtimes.kr/news/articleView.html?idxno=164918