Netflix is widely expected to launch in Korea in early 2016.
An announcement is expected within the week, Korean daily The Korea Times says.
Netflix’s arrival in Korea has been rumoured since job ads started appearing in 2014 for local hires.
The U.S. streaming platform, which launched in Japan at the beginning of September, is apparently 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 article said, quoting an unidentified source.
If it does launch in Korea, 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”.
Netflix’s has been vocal about its expansion plans across Asia, including China, where critics give it a slim chance of success.