This paper is a comparative analysis of business models and strategies employed by firms in the digital video marketplace facing competition from Over-The-Top (OTT) content services. It focuses on the Korean TV market, that is, and analyzes the strategies of all players including traditional over the air broadcasters, pay TV providers, telecommunication network providers, and the new over-the-top (OTT) service providers.
Consumers are increasingly streaming or downloading long-form video programming (mainly movies and TV shows) by using OTT content services, and sometimes unsubscribing from traditional video providers. PayTV providers are responding to this new threat by experimenting with new services such as: 1) multiscreen (N-screen): everywhere, anywhere 2) monetizing content beyond the subscription 3) online pay TV packages: a fully OTT model 4) cloud pay TV: app in smart TV or disruptive business model 5) Hybrid broadcast/broadband services (Gartner, 2013, July 25; cited in Song, 2013). Not only pay TV providers but also all types of service providers, including terrestrial broadcasters, IT companies, and device manufacturers wishing to enter the TV media business provide services in OTT form (Song, 2014; Crandall, 2014; KISDI, 2013).
Unlike the case of the United States in which the third party players (e.g., Netflix) rather than pay TV providers dominate in the OTT content service market, the Korean case draws a different picture. Domestic telecommunications service providers, terrestrial broadcasters, cable TV providers and IPTV providers have led the OTT content market actively launching OTT video services as part of their N-Screen strategies. In addition, while global companies pay attention to large-scale global platforms, domestic companies focus more on making connections to multi-screens and mobile devices.