It transpires there was much more to SK Telecom’s investment in local OTT service Pooq last week, as the Korean mobile giant followed up the initial news with plans to merge its own streaming service, Oksusu, with the broadcaster-run Pooq. Even one of the most technologically advanced operators on the planet isn’t immune to the Netflix effect and has been forced to take drastic measures.
The announcement has openly admitted that the project’s entire essence boils down to combatting Netflix, with its extensive investments in local programming now irking the country’s largest players to the point of consolidation. But the bigger news is that a merged and soon to be rebranded Oksusu-Pooq is due to launch overseas later this year.
At present, Oksusu has a reported 9.5 million active users, including 9 million paying subscribers, while Pooq has 3.7 million users, of which 700,000 are paying subscribers, so a combined clout of 13.2 million users puts it head and shoulders above any other Korean OTT video service – and significantly higher than any previous projections. Netflix, meanwhile, trails with a projected 2.5 million subscribers, according to hit-and-miss data from Statista.
But despite the distant lead, SK Telecom and the country’s top trio of broadcasters – KBS, MBC and SBS – have signed a memorandum of understanding (MOU) for a merged OTT offering, in which Pooq’s management body, the Content Alliance Platform, will cooperate closely with SK Telecom to form a new umbrella corporation. The effort will then relaunch with a new brand and service, but the companies have not yet provided a timeframe. Original content is high on the agenda and reportedly there are plans to approach content producers from overseas as well as local firms.
Of course, the bulk of technology will be supplied by SK Telecom, most of which it has built in-house, including the core streaming architectures, a content recommendation engine, plus AI and big data capabilities. It’s likely this is based on SK Telecom’s T Live Streaming technology, which it launched in 2015 in partnership with Samsung Electronics, developing it continuously to become one of the most advanced streaming technologies on the planet. We touched on the T Live Caster technology last week when covering the operator’s New Year’s live 5G broadcast, concluding that the operator is even more advanced in 5G and video streaming technologies than we initially suspected, even with South Korea being the video pioneer it is.
SKT also uses Media Excel’s MPEG-4 AVC encoding and transcoding product, the Hero platform, for multiscreen services and has done since 2012. Media Excel says Hero is designed for point-to-point delivery over IP and ASI networks, delivering live and VoD content in HLS, Smooth, Flash, and MPEG-DASH. The US company has more end user clients in South Korea than it has in its native US. For SK Telecom’s 4K UHD OTT and DTH services, AWS Elemental supplies its HEVC encoding software powered by AWS Elemental Live and AWS Elemental Server video processing.
The operator recently began using per-title encoding, applying an adjusted encoding profile to a piece of content, with individually optimized compute settings, prior to encoding the video asset. This apparently enables better image quality before being sent via the normal workflow – thereby reducing storage and delivery costs. It uses an unnamed local company, sourcing machine learning algorithms to estimate encoding profiles, then it can apply the recommendation of that engine to whatever VoD transcoder it wishes (both Media Excel and Elemental allow for profiles for adjusted dynamically through APIs).
Pooq, which SK Telecom now owns 30% in as of last week, already offers content to subscribers through SKT subsidiary SK Broadband, so SK customers are well accustomed to Pooq programming, and Pooq also has a wealth more content compared to Oksusu, according to local outlets. So, this is a case of ease of use and technological superiority trumping content; a perfect match, in theory.
“Defending the diversity of Korean culture and local media content” and “serving as a catalyst for extending the Korean Wave and bringing K-content to the global market” is the gist of the marketing campaigns behind merging the two streaming services. As for its international efforts, spreading into neighboring Asia Pacific countries is likely to be its opening gambit, probably adding content in Mandarin and Cantonese first, although entering China poses its own set of risks as we know.
Notably, SK Broadband is due to launch its first Android TV service this month after announcing the deployment in October, rolling out an Arris 4K device serving up OTT, linear and on-demand video, and we assume this is an AOSP deployment rather than a full operator tier project.
SK Telecom ended Q3 2018 with approximately 24.7 million handset subscribers.
SKT said in a statement, “More competitive content, distinctive services, larger platforms and overseas expansion are essential for the growth of the OTT business and the development of the domestic media ecosystem, and ongoing investment must be guaranteed. Our eventual plan is to build this combined service into the Netflix of Asia and beyond that to Korea’s flagship OTT service that can compete in the global market, thus revitalizing the domestic media ecosystem.
Iflix, Hooq, Viu and other popular services will too be chasing the title of the “Netflix of Asia” and Netflix will be sure to increase its investments in local original content – so expect a spate of retaliation throughout 2019.