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LG was betting on Disney+ to become the No.2 ranked streaming service provider in Korea after Netflix For South Korea’s wireless carrier LG Uplus, Disney+ may have become more trouble than it is worth.The country’s video-on-demand over-the-top streaming service industry is dominated by the perennial No. 1 service provider Netflix, Inc. as well as domestic platforms like Coupang Play. MINIMUM REVENUE GUARANTEEIn its exclusive contract with Disney Korea last year, LG Uplus included a clause that guarantees a minimum revenue for the content provider. Sources say LG Uplus is forking out tens of billions of won to meet the minimum, as well for the streaming service’s advertising and marketing fees. The problem is that the accumulated revenue from the Disney+ operation in South Korea from last November to early this month is below 10 billion won ($7.7 million). Even though the number of subscribers to the service itself is not too shabby, a sizable number of them are not paying subscribers. Many subscribed through promotions at various LG Uplus locations.The mobile operator signed an exclusive contract with Disney Korea last September and launched the service two months later.In one promotion, the wireless carrier doled out Disney+ subscriptions to all 5G network service subscribers who pay above 95,000 won per month in mobile phone services. LG Uplus is now working to fill the gap between the guaranteed revenue as stipulated in the contract and the sluggish sales. MARKET TREND CHANGEThe mobile operating arm of LG Corp. was betting on industry-wide expectations that Disney+ would become the second-most popular streaming service globally, behind Netflix. Amazon Prime Video currently holds that title.Back in November 2018, LG Uplus signed an exclusive contract with Netflix and became the sole provider of Netflix content in South Korea through the second quarter of 2020. Other satellite broadcasting providers include KT Corp.’s KT Skylife Co. and SK Telecom Co.’s wholly-owned subsidiary SK Broadband, Inc.During this time, LGUplus’ streaming service subscriber count jumped 21%, while the revenue rose 15%. .j-chart {font-family: 'Noto Sans KR', sans-serif; margin-top: 30px;} .j-chart-txt-div {/*margin-left: 5%;*/} .j-chart-h5 {font-size: 21px; font-weight: 600; margin-bottom: 20px; letter-spacing: -0.2px;} .j-chart-h6 {font-size: 15px; font-weight: 400; margin:-5px 0 20px 0} .j-chart-p {display: flex; justify-content: space-between;} .j-chart-p p {font-size: 13px; font-weight: 300; margin-bottom: 0!important; margin-top: 0px; line-height: 15px;} .j-chart-sub-p {display: flex; margin-left: 6%;} .j-chart-sub-p p {font-size: 14px; font-weight: 400; color: #374140; margin-bottom: 0!important; width: 50%; text-align: center; padding-bottom: 0px;} .d-pc-none {display: none!important} .d-pc-block {display: block!important} .txt-center {text-align: center; margin-top: 50px} .j-chart .year-div-cont {display: flex; justify-content: space-between; flex-wrap: wrap;} .j-chart .year-div {width: 45%;} .j-chart .year {text-align: center; font-weight: 500; font-size: 15px; margin-top: -5px; margin-bottom: 20px;} .j-chart .d-flex {display: flex; justify-content: space-between;} .chart-flex-img {display: flex; justify-content: space-around; flex-wrap: wrap;} .chart-flex-img img {width: 100%;} @media screen and (max-width: 765px) { .j-chart-txt-div {margin-left: 0%;} .j-chart-p {display:block; } .j-chart-p p {margin-top: -6px;} .j-chart-sub-p {margin-left: 10%;} .j-chart-sub-p p {font-size: 13px; padding-bottom: 10px;} .j-chart-h5 {font-size: 22px} .txt-center {text-align: left; margin-top: 20px} .d-pc-none {display: block!important} .d-pc-block {display: none!important} .j-chart .year-div {width: 100%;} .j-chart .year-div {width: 100%;} .j-chart-h6 {font-size: 15px; font-weight: 400; margin:5px 0 20px 0} .chart-flex-img {display: block;} .chart-flex-img img {width: 80%; padding: 5px 0; text-align: center;} } Monthly active user count for Disney+ in S.Korea
Graphics by Jerry Lee
var ctx = document.getElementById("j-myChart0").getContext('2d'); var myChart = new Chart(ctx, { type: 'bar', data: { labels: ['Dec. 2021', 'Feb. 2022', 'May 2022'], datasets: [{ label: 'MAU', backgroundColor: ["rgba(29, 178, 246, .4)", "rgba(29, 178, 246, .5)", "rgba(29, 178, 246, .6)"], borderColor: ["rgba(29, 178, 246, .8)", "rgba(29, 178, 246, .8)", "rgba(29, 178, 246, .8)"], borderWidth: 1, data: [2.0, 1.9, 1.7], } ], }, options: { segmentShowStroke: false, responsive: true, scales: { xAxes: [{ stacked: false, ticks: { beginAtZero: true, //steps: 10, //stepValue: 5, //min: 0, //max: 2000, fontSize: 13, fontColor: 'black' }, }], yAxes: [{ //stacked: true, ticks: { beginAtZero: true, //steps: 10, //stepValue: 5, min: 0, max: 3, fontWeight: 'bold', fontSize: 12, fontColor: 'black', beginAtZero: true, callback: function(value, index, values) { /* if(parseInt(value) >= 1000){ return '' + value.toString().replace(/\B(?=(\d{3})+(?!\d))/g, ","); } else { return '' + value; } */ return value + '' } }, }] }, //특정 단어 덧대는 툴팁 방법 tooltips: { callbacks: { label: function(tooltipItem) { var label = tooltipItem.yLabel; var xLabel = tooltipItem.xLabel; console.log(tooltipItem) return ' ' + label + ' mn'; } } }, maintainAspectRatio: true, legend: { display: false, position: 'top', padding: 10, border: 0 }, plugins: { deferred: {enabled: true, delay: 400}, datalabels: { color: '#171717', borderWidth: 0.7, borderColor: false, borderRadius : 5, anchor: 'end', //scales: 'left', //textAlign: 'start', align: 'end', clamp: 'true', backgroundColor: false, //padding: 80, offset: -2, font: { //weight: 'bold', size: 12 }, formatter: function(value, context) { return value + ' mn' /* if(parseInt(value) >= 1000){ return '' + value.toString().replace(/\B(?=(\d{3})+(?!\d))/g, ","); } else { return '' + value; } */ }, }, }, } }); Those familiar with LG’s latest investment in Disney+ say the company was hoping for a repeat of such success. Unfortunately for the wireless carrier, the streaming service landscape has changed since then.Netflix was rapidly expanding its presence in South Korea for the two years since 2018 by pushing out a number of hit original series such as the political period horror thriller Kingdom.While there were only a handful of global giants in the market back then, the industry has become a red ocean since. TVing Corp., a joint venture of CJ ENM Co., Naver Corp. and JTBC, Wavve, Coupang Play, Apple TV, and Watcha have been consistently beefing up their services. As the COVID-19 pandemic has turned into an endemic, the demand for streaming services is on a steady decline around the globe. An infection is said to be endemic when it is constantly maintained at a baseline level in a geographic area without external input. Disney+ content includes Pixar, Marvel, Star Wars and more“The retention rate of paid subscribers is low for Disney+ because the company lacks content made by or for the South Korean market,” an industry insider told The Korea Economic Daily. “Even though there are fans of its Marvel series and the National Geographic content, those numbers alone are not able to keep the sales figures afloat.”
The number of monthly active users hovered around 1.7 million late last month, an 18% slide from its launch, according to data analysis platform Mobile Index. LG Uplus, however, remains optimistic in the long term. “The partnership with Disney+ sets our services apart from our competitors and helps bring in new subscribers,” said an LG Uplus employee.By Han-Gyeol Seonalways@hankyung.comJee Abbey Lee edited this article.
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