International Journal of Internet, Broadcasting and Communication

The Institute of Internet, Broadcasting and Communication (한국인터넷방송통신학회)
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Over-The-Top (OTT) Platforms' Strategies for Two-Sided Markets in Korea

  • Song, Minzheong (Department of Media Communication & Advertising, Hansei University)
  • Received : 2021.08.27
  • Accepted : 2021.09.09
  • Published : 2021.11.30
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Abstract

The purpose of this paper is to present the Over-The-Top (OTT) platforms' strategies for two-sided markets. For this, we examine six strategic factors influencing OTT's success in Korea. The analysis reveals, among six OTTs, Netflix utilizes five strategic factors except the same-side network effects. OTTs from pay TV operators and channel providers tend to block the cross-side network effects on the opponent OTTs, because they think their giveaway to content providers is in vein, if the invested content by them would be consumed on opponent rival platforms. Interesting is that after experiencing a negative association between the market entry of Netflix and the subscription revenue growth rate of pay TV services, pay TV operators utilize the same-side network effects by offering hybrid services in partnership with global OTTs like Netflix, Disney+ which are considered as a complementary OTT. In conclusion, it is suggested to target a new connected TV based OTT service offering with collaboration with Korean TV device manufacturers for Korean OTTs' global strategy, because Netflix-like global market expansion is not easy for them to cover their content cost.

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