"Streaming Wars Over"... K-content faces challenges of platform absence and IP weaknesses

As the growth of the digital content market slows down and the competition centered on global platforms is being restructured, an analysis has been released regarding the structural challenges facing K-content. It points out that while the global recognition of the content is high, it is vulnerable in terms of securing platforms that actually generate revenue and intellectual property (IP).

"Streaming Wars Over"... Digital content market hits profitability limits

According to a Trade Lounge video, a phenomenon known as "Streaming Wars Over" is appearing in the digital content field. While numerous OTT (Over-the-top) platforms entered the market as digital content consumption exploded before and after COVID-19, the analysis suggests that the expected market expansion effect is limited.

Noh Chang-hee, director of the Digital Industry Policy Institute, who appeared in the video, explained, "The digital content market requires high investment, but it is not actually a market where money flows out," adding, "This is because the added value is not large." This means that contrary to expectations that the expansion of OTT platforms would increase the total pie of the media industry, market expectations have collapsed as content producers become dependent on platforms or face limited revenue structures.

Absence of platforms and IP securing capabilities... Structural weaknesses of K-content

Despite the high competitiveness of K-content, the challenges in terms of industrial structure are clear. The biggest problem is the absence of global digital platforms such as Netflix or YouTube. Currently, Korean content companies mainly perform the role of supplying content to global platforms.

Noh diagnosed, "Korea has platforms like Naver, but it does not yet have global digital platforms like Netflix," and stated, "Growing digital platforms is a necessary part." Additionally, the ability to utilize IP (intellectual property) to maximize the added value of content was also cited as an element that needs to be supplemented. He explained that, much like how Disney generates revenue through theme parks or goods, the ability to create secondary revenue models based on content is still weak.

As an alternative, the role of the domestic platform 'TVING' was mentioned. An opinion was presented that the platform should be grown based on the global competitiveness of the content held by CJ ENM. However, it was also mentioned that large-scale investment for network construction, marketing, and securing local content, along with solving internal issues such as the decrease in advertising revenue of the domestic media industry, must precede this.

Need to respond to digital trade barriers and 'invisible regulations'

Future digital trade is expected to change according to the reorganization of international norms surrounding the cross-border movement of data and platform accountability. While the zero-tariff stance of the WTO system will be maintained, various responses based on the interests of different countries are expected to emerge. In particular, invisible regulations, such as China's Panho (service license) system, can affect Korean companies.

Noh emphasized, "This is an area that requires mathematics beyond simple arithmetic," and stressed the need to build reciprocal relationships with global platform operators and for government-level support from legal and local experts. He predicted, "Ultimately, future digital trade will be a battle of how cleverly one can navigate the rough waves of tariffs or regulations coming from outside one's territory."