South Korean internet service provider SK Broadband, a subsidiary of network operator SK Telecom, has entered into a strategic partnership with Netflix to provide enhanced entertainment experiences to its customers. The partnership will also involve collaboration on SK’s AI products, presenting potential new market opportunities for both companies.
The objective of this collaboration is to enable SK Telecom and SK Broadband customers to enjoy Netflix shows and films more easily on their mobile devices and through their IPTV (B tv) services. The partnership aims to streamline access and payment options for Netflix content, and will offer various price plans and bundled packages to customers.
This strategic partnership has resolved a long-standing legal dispute between the two firms. The dispute, which began in 2020, centered around whether Netflix should pay network usage fees to SK Broadband due to the significant amount of data transmitted by the streaming service. SK Broadband argued that this caused traffic overloads and increased maintenance costs.
Netflix countered by asserting that it should not be penalized for its success and highlighted the potential of its content delivery network, Open Connect, to reduce network traffic by up to 95%. Despite other major content players like Apple and Facebook paying usage fees to South Korean internet service providers, the Netflix-SK Broadband dispute was further intensified by the release of Netflix’s highly popular show, “Squid Game,” in September 2021. This show propelled Netflix to become South Korea’s second-largest data generator, following YouTube.
Given the stalemate in the legal battle, SK and Netflix have recognized that collaboration is the best path forward. Both parties have decided to end all disputes and proceed as partners, prioritizing the satisfaction of their customers.
The contention between SK Broadband and Netflix mirrors the ongoing debate internationally regarding whether major content providers should contribute towards the costs of telco networks that they rely on heavily for service delivery. This “fair share debate” is being discussed extensively in various markets, notably in Europe, where the European Commission is currently conducting a consultation on the matter.
The partnership between SK Broadband and Netflix represents a significant step towards improving entertainment experiences for customers in South Korea. Sign up for Total Telecom’s daily newsletter to stay updated on the latest international telecoms news.