Netflix, which took the No. 1 market share in the global OTT market, is showing greed. In South Korea, a lawsuit was filed against Internet operators claiming that they could not pay network fees, and in other regions, subscription fees for users who shared accounts were increased.
Network usage fee is a fee paid by a content provider (CP) to an Internet provider (ISP). However, Netflix did not pay this fee in South Korea. Domestic companies and foreign companies such as Disney and Apple all pay network usage fees to Internet service providers.
Netflix filed a lawsuit against SK Broadband when SK Broadband (SKB), one of the South Korean ISPs, demanded to pay the network usage fee. At the first trial held in June 2021, Netflix lost the case, and Netflix immediately appealed.
A second trial was held recently, but it was reported that the two sides' arguments were in tension. The second hearing will be held on May 18th.
Netflix is actively increasing the amount of money it receives from subscribers without paying the money it owes in South Korea.
The subscription fee in North America was $7.99 for the standard price, but now nearly doubles to $15.49. In South Korea, the subscription fee increased by 17.2% for the first time in five years.
Netflix has also changed its rules for account sharing. On the 17th, Netflix announced on its official blog that 'If a subscriber shares an account with someone other than his family, he will have to pay an additional fee'. This policy will be implemented first in Latin America. Subscribers have to pay an additional fee of about 2,500-3,600 won for each additional person who does not live with them.
Moreover, Netflix has decided to release episodes of some original series sequentially. In the existing Netflix original series, one season was released at a time. This change seems to be a way to retain subscribers longer.
Netflix is also being accused of tax evasion. It is suspected that the company has cut corporate tax by inflating the deficit without paying taxes by expediently diverting domestic profits overseas. In fact, a fine of about 80 billion won was imposed in South Korea.
Of course, Netflix has contributed a lot to the domestic content industry. Although there is controversy over copyright and profit distribution, great dramas such as 'Kingdom', 'Sweet Home', 'Squid Game', 'D.P', 'Extracurricular' and 'HELLBOUND' have been made.
However, if that increases the burden on the subscriber and reduces the benefits, the subscriber leaves. This is because the global OTT market is highly competitive. If you are looking for immediate profits just because your profits have increased due to COVID-19, it will be difficult for Netflix to maintain the top spot.
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