Netflix rejects SK Broadband payment demands
October 25, 2021
Korea’s culture, music and fashion forward sensibilities are well known around the world. The nation’s rich storytelling traditions are equally exceptional, but have been less popular outside of Asia. That is all changing. Parasite broke through at the Oscars, and a mind-boggling 142 million households across the world have chosen to watch Squid Game, which was sourced, written, and produced in South Korea. That’s right — a Korean show has been seen by nearly 10% of all the high speed broadband households in the world. Amazing.
But that’s just the tip of the iceberg. Korean romantic comedies, horror and animation are equally great, and are set to turn the Korean storytelling wave into an even more powerful cultural and economic force. Korean story-telling is and will radically change the global entertainment landscape. For example, in merely two years, U.S. consumption of our non-English-language programming has grown 70%. And we’ve seen the broader impact of a story like Squid Game — the number of Americans studying Korean on Duolingo has spiked an estimated 40% this past month.
At Netflix, we are committed to partnering with the Korean creative community. We have spent more than US$1 billion on Korean stories and plan to spend even more. We are building two production facilities here. And we are working to ensure our creative partners are connected with opportunities to leverage their talent all around the world. For example, the Instagram following of actress Jung Ho-yeon, who played the feisty but loveable character Kang Sae-byeok in Squid Game, skyrocketed from 400k to 21 million after the show took the world by storm.
All in all this should be a “Gganbu” story. A narrative of exceptional partnership and friendship. And, it is. Except for a single broadband player in Korea who is seeking to use its dominance to extract an arbitrary payment from streaming services like Netflix, for simply making our shows and films available on the internet to Korean consumers, who mind you, are already paying for their internet connection.
We are doing our part to ensure Netflix isn’t a burden on Korean broadband companies. Working with companies like Samsung and Cisco in the Alliance for Open Media, we built a content delivery network called Open Connect, which we offer free-of-charge to internet service providers around the world. It enables Netflix content to be stored as close to our members as possible, and avoids clogging up the internet. The overwhelming majority of our ISP partners around the world use Open Connect, because why wouldn’t they? We deliver it to them for free. It’s proven to reduce at least 95% of network traffic, leaving lots of room for other content to go through. It saves cost. And most importantly, consumers are able to enjoy a high-speed, high-quality Netflix experience. In 2020 that cost saving was estimated to be $1.2B. Unfortunately, while more than a thousand ISPs around the world recognize these benefits, one of the largest internet companies in Korea is turning a blind eye. Why? Because by making both consumers, and content providers pay, they can get paid twice. Red Light, Green Light.
We know that our success in Korea is dependent on our long term commitment to collaboration. Hits like Kingdom, #Alive, Itaewon Class, Sweet Home, D.P., and, of course, the global phenomenon that is Squid Game are a precursor to all that we hope to accomplish together.