Netflix rolls out its subscription on-demand streaming service in Korea in early 2016, as part of a four-market Asia expansion plan.

Netflix will be up against powerful and well-established Korean streaming/OTT platforms with strong local content pipelines, robust TV everywhere infrastructure, and a clear interest in keeping outsiders from gaining a foothold in this highly wired market.

But there are gaps in Korea’s on-demand strengths, which Netflix is clearly hoping to exploit. While Korea has a thriving transactional video on-demand market (TVOD), the country hasn’t made much headway in subscription video on demand (SVOD).

At its peak, TVOD made up about 25% of cable/IPTV revenue in Korea, according to Media Partners Asia (MPA).

Advertising supported video on demand (AVOD) has also taken hold. MPA executive director, Vivek Couto, says the arrival of SVOD players like Netflix may force incumbents into new alliances to head off the threat.

“The cable groups and telcos are realising that they could come under attack,” Couto says.

At the same time, he adds, “Netflix has a chance of success although there are many challenges”.

Local Korean media last week said Netflix, which launched in Japan at the beginning of September, was looking for strategic content partnerships with Korean mobile carriers and terrestrial broadcasters.

“For Netflix, the main issue is how to cut costs in content delivery and lower its spending for network usage,” The Korea Times said, quoting an unidentified source.

Netflix's Korea announcement was bundled with the launch of the service in Hong Kong, Taiwan and Singapore in early 2016 as it moves to complete its global rollout by the end of 2016.

The company said it would be offering local subtitles for most content.

Content will be offered in HD or UHD 4K, Netflix said.

Genre details have not been disclosed. Netflix said only that there would be a wide selection of programming for kids..

"Consumer demand for foreign movies and TV shows is high in Hong Kong and Taiwan, where great stories from around the world appeal to such international cultures," said Netflix chief executive officer Reed Hastings.

"The combination of increasing Internet speeds and availability of smart phones and TVs will provide consumers with the anytime, anywhere ability to enjoy their favourite movies and TV shows on the Netflix service," he said.

Additional details on pricing, programming and supported devices will be available at a later date.