Three of South Korea's leading broadcasters have launched Kocowa (Korean Content Wave), an online video streaming service, in the US. The service, launched on 24 July, is backed by Korean Content Platform (KCP), a US-based joint venture company between Korean Broadcasting System (KBS), Munhwa Broadcasting Corporation (MBC) and Seoul Broadcasting System (SBS). The service offers content from these broadcasters with English subtitles, with some shows airing six hours after broadcast in South Korea.
Kocowa is available on both an ad-supported and subscription basis. The subscription service is available at a daily fee of $0.99 and a monthly fee of $6.99. The service is accessible on PC, mobile and tablet, and will be available on smart TVs soon.
According to IHS Markit, the three broadcasters control over 75% of South Korean free-to-air advertising revenue. Though Kocowa is not the first OTT initiative by the consortium, this is the attempt at targeting the international market. POOQ, the online video service, was launched in South Korea in July 2012 by Content Alliance Platform (also a joint venture of KBS, MBC and SBS) to target the domestic market. The OTT service reached 500,000 paying users by the end of 2016, making it one of the largest online video subscription services in South Korea. Kocowa is hoping to replicate the success of POOQ away from home.
Driven by the global popularity of Korean content over the last decade, broadcasters have increased investment in original content, either produced in-house or commissioned. We estimate that South Korean broadcasters spent 89.1% of their revenue on TV programming in 2016, compared to 80.5% in 2013.
The rise of OTT opens up new opportunities for content producers to exploit their IPs globally outside their core TV broadcasting business. Korean producer CJ E&M’s has the ambition to expand its OTT platform TVing across the globe while Watcha Play plans to launch in Japan in late 2017. The three leading South Korean broadcasters have agreed an exclusive deal with Hong Kong PCCW’s Viu for exclusive rights to their new programming.
Kocowa will face fierce competition in the US streaming market from established generalist online video service providers including Netflix, Hulu and Amazon. Even more directly, Kocowa will compete with Warner Bros-owned Drama Fever, Rakuten’s Viki and OnDemandKorea.
By leveraging the broadcasters' existing advantage in Korean content, IHS Markit believes that Kocowa is well-positioned to compete with other industry players in this niche market.