The Age of the OTT Platforms

 

                                                 written by 20305 Kim Min Chae

People are not visiting the cinema and not watching TV. This is because people can easily access any content whenever and wherever they want with their phones. The strong untact winds of COVID-19 have further boosted Over The Top (OTT) growth. The utilization rate of OTT jumped from 36.1% in 2017 to 66.3% last year.

As the OTT platform market has grown, many companies are trying to gain the upper hand by jumping into the OTT market. OTT is very diverse with Netflix, Wavve, Seezn, TVING, Watcha and Coupang Play.

But it’s hard to tell who’s going to win.

Currently, Netflix is still a massively powerful platform in the OTT service industry. But it is now possible that Netflix will not maintain its status. Netflix recently recorded 7.91 million visitors, with 1 million people leaving in five months from 8.99 million visitors. At the same time, the so-called Korean OTT is advancing rapidly. As of May 2021, Wavve hit a new high of 3.74 million people.

However, Netflix is still ahead in terms of user satisfaction as well as absolute scale. In terms of OTT utilization, Netflix was 35.4%, higher than Wave (9.4%), TVING (5.0%) and Kakao TV (0.9%). The satisfaction gap between Netflix (0.57 points), TVING (0.33 points) and Wavve (0.2 points) was also evident.

Domestic-based OTTs are competing for investment to narrow the gap with Netflix. With Netflix announcing that it will invest 550 billion won in Korean content in 2021, domestic-based companies announce their plans to invest hundreds of billion won.

Wavve has expanded its investment plan from 300 billion won by 2023 to 1 trillion won by 2025. KT’s CEO, Lim Si Mo, also announced that he will invest more than 400 billion won by 2023. In response, CJENM announced that it will invest 5 trillion won in content over the next five years and produce more than 100 original TVING content by 2023.

OTT market growth has caused genres such as documentaries and stand-up comedies to reemerge. OTT is popular because it has various content appealing to these people who love documentaries and stand-ups.

However, the growth of the OTT platform means the collapse of TV and movie theaters. In the past, TV and movie theaters were the only way to access or see different productions, but now they are not.

Now TV and movie theaters also need to make changes to survive. TV companies created super-large TVs that can easily access OTTs, increasing demand by 206%. Whenever age change, it is natural to fall behind if there is something else that grows. In the midst of these flows, companies need to innovate to follow the changes to avoid disappearing from people’s view.