Netflix’s refusal to pay dues despite its extraordinary success in South Korea and gains from its global hit from Korean drama “Squid Game” has even angered the president.
The global streaming giant Netflix has been resisting network usage fees in Korea, which amount to 100 billion won ($85.13 million) per year despite its defeat in the first trial challenging the fee charge based on “net neutrality” principle.
Netflix has been euphoric with the huge hit from dystopian Korean drama “Squid Game” to the extent of its CEO showing up for this third-quarter`s earnings interview clad in green Squid Game players’ tracksuit. The company has generated about $900 million in value as it owns the entire intellectual property rights for the show.
Thanks to global craze over the series, Netflix added 4.4 million subscribers in the third quarter, beating the streamer’s own forecast of 3.5 million as well as those of analysts of 3.84 million.
The show garnered more than 142 million viewers in the first month of its release, causing a huge surge in network traffic and reigniting an age-old broadband battle in the country over who should take on the spiraling costs of network traffic.
The U.S. streaming company in June lost its first trial versus the country’s major broadband internet access provider SK Broadband Co. and in the following month appealed.
SK Broadband, a subsidiary of the country’s leading wireless carrier SK Telecom, accused Netflix of free-riding on its networks, pointing out that the California-based streamer pays network fees in the U.S. and France but not in Korea.
The government and the national assembly are united in the voice for stronger action by legally mandating foreign players payment for use of local networks.
Minister Lim Hye-sook. [Photo by Han Joo-hyung]
Kim Young-sik from the main opposition People Power Party submitted a motion to the National Assembly to revise the telecommunications business law in July and Minister of Science and ICT Lim Hye-sook vowed on Wednesday to cooperate in pushing the bill.
President Moon Jae-in on Monday also emphasized global platforms must act their “responsibility" during his meeting with Prime Minister Kim Boo-kyum, asking the cabinet to ensure fair rates on network use and terms between contents producers and platform.
By Lee Sang-duk, Na Hyun-joon and Lee Soo-min
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