With the development of smart devices and the internet, media consumption patterns have changed around the world, leading to rapid growth in the over-the-top (OTT) market. According to Global Information (GII), a global market research firm, the OTT market size is estimated to reach USD 542.3 billion by 2024. Moreover, it is projected to grow at an average annual rate of 37.1% from 2024 to 2030, reaching approximately USD 3.6 trillion by 2030. In South Korea, the number of OTT service users have been steadily growing, at an average annual growth rate of 5.4% from 2020 to 2024.

In the United States, the number of paid TV subscribers, including cable, satellite, and IPTV, fell from 83% in 2013 to 64% in 2023.1 The case is similar in South Korea: fewer households are subscribing to paid TV broadcasts due to factors such as increased OTT usage and low subscription rates for paid TV broadcasts among single-person households. As of December 2023, the total number of paid broadcasting subscribers was 36.3 million, with the growth rate2 continuing to decline since 2016.3 On the other hand, the OTT service usage rate has been steadily increasing, rising from 72.2% in 2020 to 89.2% in 2024. The OTT market is expected to grow further in line with global trends such as cord-cutting (canceling paid TV subscriptions) and the emergence of cord-nevers (people who have never subscribed to paid TV).

The global OTT market is seeing intensifying competition among global giants such as Netflix, Disney+, Apple TV+, and Amazon Prime. Netflix is leading the OTT market in South Korea, and according to WiseApp and Retail, the OTT apps with the most users in South Korea are Netflix (14.2 million), followed by Coupang Play (7.6 million), Tving (6.3 million), Wavve (2.7 million), and Disney+ (2.4 million) as of January 2025.⁴⁴⁾

While homegrown OTT platforms are trying various strategies to attract users, they face challenges in competing with global OTT platforms as they lack in content and capital. In other words, each platform needs differentiated original content to appeal to users, but South Korean platforms, when compared with their global rivals, lack the capital and resources needed to produce such content. To support them, the South Korean government plans to establish a KRW 1 trillion K-Content Media Strategy Fund by 2028 to make homegrown OTT platforms more competitive. In addition, the Korea Creative Content Agency is working with South Korean OTT platforms such as Tving, Wavve, and Coupang Play and funding their production of dramas and non-dramas.

Global OTT platforms are expanding their user base by producing differentiated original content. Especially noteworthy is that cultural content is highly subject to cultural discount, referring to content produced in a specific country dued when it is launched in other cultural regions due to cultural and linguistic differences. In response, Netflix and Disney+ are trending toward producing content by resorting to localization strategies to reflect the cultures of their viewers.

Meanwhile, Korean original content is widely produced as K-content is gaining popularity in the global market. One of the best examples is Netflix's original series Squid Game Season 1. The show was produced with a budget of approximately USD 21.4 million and is estimated to have generated around USD 900 million in value.⁵ In other words, Squid Game Season 1 yielded a return of about 40 times the production cost. Building on the success, Netflix has announced plans to invest a total of USD 2.5 billion in Korean content from 2023 to 2026.⁶ As Korean content gains popularity in the global market, the number of original content productions is also increasing rapidly. The number of Korean original content productions, which stood at just four in 2018, is expected to rise to 32 by 2025.⁷ In fact, during the period from May 5 to May 11, 2025, four South Korean shows - Weak Hero: Class 2, Heavenly Ever After: Limited Series, Resident Playbook: Limited Series, and The Devil's Plan: Season 2 made the top 10 non-English shows list.⁸

Disney+ has also been ramping up its investment in South Korean content since its official launch in the country in November 2021. Moving, released in August 2023, became the most-watched South Korean original content, and contributed to securing seven million subscribers in the fourth quarter of 2023.⁹ As of 2023, nine of the top 15 content titles were South Korean,1⁰ indicating that subscribers are growing more interested in South Korean content. Disney+ plans to release eight Korean original content titles in 2025, including Trigger, Nine Puzzle, and Tempest. The platform is strengthening partnerships with South Korean production companies such as Studio & NEW and KeyEast to find and stream South Korean content.

Global OTT platforms’ investments in South Korean are playing a role in expanding the global market presence and user base for South Korean video content such as drama shows and movies. Additionally, as original content expands beyond drama shows to variety shows, South Korean video content across various genres now has the opportunity to enter overseas markets.

OTT platforms are focusing on producing original content to obtain intellectual property rights that they can own exclusively. With the global demand for Korean video content such as Squid Game, All of Us Are Dead, Moving and Pachinko on the rise, investment in this area is expected to expand further. Additionally, the popularity of Korean webtoons is driving a virtuous cycle where original content based on webtoon IP with high box office potential is being produced, and further raises interest in the original webtoons.

As global OTT platforms invest more in South Korea, local production companies can enjoy the benefits of being provided with a stable production environment and opportunities for global expansion. At the same time, however, local production companies, as suppliers of content, are unable to secure IP rights or enjoy additional revenue, leading to dependence on platforms and potential imbalances in revenue generation. Therefore, from a long-term perspective, it is necessary to explore ways for local production companies to build diverse revenue structures by owning IP rights or seeking joint ownership. For example, a licensing agreement could be established where OTT platforms purchase exclusive streaming rights only for a certain period while production companies retain IP ownership, and production companies and OTT platforms, as partners, work together for stable distribution, global expansion, and improvements in IP revenue structures.