Innovation Drives South Korea to Become a Global Top 10 Video Market

Video Research, Analysis and Commentary

South Korea’s overall video and TV market spend is on track to achieve 8% growth in 2018, ending the year at 7.8 trillion KRW, nearly $7 billion USD, according to the latest Video Insights country report from Futuresource Consulting.

“South Korea ranks as one of the world’s ten largest video entertainment markets,” says Tristan Veale Market Analyst at Futuresource. “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 VoD and EST just four weeks after theatrical release, make it a global pioneer and drive around 65% of its transactional video spend. When it comes to home video, South Korea is at the forefront of innovation.”

Pay-TV Pivotal, But Saturated

Pay-TV plays a central role in the South Korean market, accounting for nearly 70% of overall video spend in 2018, although the sector is now close to saturation point, with little room for subscriber growth. With strong local content and a significant range of VoD content available on multiple services, standalone SVoD services such as Netflix have historically found it difficult to gain a foothold in the landscape.

“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.”

5G to Pave the Way for Next-Generation Mobile Video

A highly developed smartphone market, with penetration of 90%, means that bundled mobile subscriptions are an important consideration for Pay-TV consumers. The leading Pay-TV operator, KT Telecom, has invested heavily in its services and infrastructure, stimulating continued growth. With all this activity, South Korea is poised to be a forerunner in the race for 5G, and all the major telcos are looking at premium video use cases to help drive uptake.

Box Office Draws the Crowds

Box office is another key sector for South Korea. It commands the world’s sixth largest box office territory, accounting for nearly a quarter of the country’s consumer video spend in 2018. With a population of 51 million and box office admissions coming in at around 220 million per year, even the USA lags behind South Korea’s per-capita visitor rate.

“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.”

The South Korea video insights report from Futuresource reviews the overall video entertainment market in South Korea and assesses the impactors and drivers. Key areas covered include online video, Pay-TV VoD, subscription Pay-TV and box office, with detailed market data provided from 2015 out to 2022.

About the author

Tristan Veale

Throughout Tristan’s career he has provided thought leading research and insights on the consumption of Motion Pictures, Film and TV series. Now positioned as a leading analyst within the TV and Video content research team at Futuresource Consulting, Tristan informs content creators, distributors and CE manufacturers on the shifting and fragmenting media landscape, helping Futuresource’s clients stay up to date in terms of what consumers want to watch, where they want to watch it, and on which devices.