South Korea’s video, TV spend nears US$7BN in 2018
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Rebecca Hawkes
| 18 December 2018

South Korea’s video and television market spend looks set to achieve 8% growth in 2018 to KRW7.8 trillion (nearly US$7 billion), according to Futuresource Consulting.

Pay-TV accounted for nearly 70% of overall video spend in 2018, although the sector is now close to saturation point, with little room for subscriber growth, Futuresource said in its latest Video Insights country report.

“South Korea ranks as one of the world’s ten largest video entertainment markets. Highly digitised, it is driven by strong pay-TV competition, investment in infrastructure and an innovative approach to home entertainment delivery. Its super-premium release windows, typically delivering video-on-demand and EST just four weeks after theatrical release, make it a global pioneer and drive around 65% of its transactional video spend,” said Tristan Veale, market analyst at Futuresource .“When it comes to home video, South Korea is at the forefront of innovation.”

A significant range of strong local content available on-demand in South Korea has hampered the growth of standalone subscription video-on-demand (SVOD) services such as Netflix.

“Low SVOD uptake is a distinctive peculiarity of the South Korean market,” says Veale. “Despite having the infrastructure, technology and a strong consumer appetite for digital content, standalone services continue to struggle due to the strength and dynamic competition in the pay-TV sector, laggings behind other major markets. We are seeing healthy growth, but it is coming from a very low base and there will be a challenging future path to tread,” added Veale.

Bundled mobile subscriptions are a key consideration for the country’s pay-TV customers, given the high smartphone penetration of 90%. Leading pay-TV operator KT Telecom has invested heavily in both services and infrastructure, stimulating continued growth in mobile video. South Korea is poised to be a forerunner in the race for 5G, with premium video to help drive uptake, said Futuresource.

The cinema also remains popular in South Korea, which boasts a per-capita visitor rate higher even than that of the USA. Box office receipts accounted for nearly a quarter of the country’s consumer video spend in 2018, with admissions totalling around 220 million per year for a population of 51 million.

“There are no doubts that South Korea is a star performer on the home entertainment world stage,” says Veale. “The country is a manufacturing and technological powerhouse, particularly in markets for consumer electronics and smartphones. Despite facing cut-throat competition from Chinese rivals, the economy remains buoyant and its home entertainment market will continue to fascinate and flourish for many years to come.”