The global success of Netflix’s Korean Survival Drama series “Squid Game” has given Korean internet service provider SK Broadband a new opportunity to claim a network usage fee. On Friday, the ISP said it had initiated legal action against the streamer.
Netflix, which has previously argued that SK has already been paid for by corporate and individual users, said it would review the claim.
“We believe in a collaborative relationship between content providers and ISPs, each of which provides the best experience for our mutual consumers. We’re investing heavily in bringing great content to our global audience,” a Netflix spokesperson said in an e-mailed statement Diversity. “Despite ongoing lawsuits, we will continue to have open conversations with SK Broadband so that consumers can enjoy high-quality content streaming at a faster pace.”
The streaming giant has had worldwide success with Korean shows that have either been produced as originals or for which it has licensed rights outside the country. This has forced it to take long-term studio leases in the country and spend about 500 500 million on Korean content this calendar year.
Korea’s strong local content policy has also made Netflix the country’s most successful streamer. Data released last month by industry tracker WiseApp shows that Netflix earned িয়ায় 68 million in Korea in August, an increase of 78% year-on-year. WiseApp estimates that Netflix’s subscription base in Korea now stands at 5.14 million, up from 3.16 million a year ago.
But such apparent success by a foreign entity did not sit well in Korean business circles, where organizations known as family-controlled chaboles dominate the industry scene and are accustomed to controlling the government.
In recent years, Korea’s ISP has pressured government ministries – such as the Korea Communications Commission (KCC) and the Ministry of Science and ICT (MSIT) – to introduce legislation and guidelines that would help pressure their foreign streaming services to pay usage fees.
In 2020, the National Assembly enacted legislation guaranteeing “service stability” to content providers who have more than one million users and 1% of traffic. The purpose was to enable ISPs to claim for shared payments from streaming services. Although the decree on service stability control details does not oblige streamers to pay network fees, Korean ISPs saw the law as an example and an incentive to impose strict pressure.
Netflix launched its own legal action against SK Broadband last year to examine the fee question in court. In June, a Seoul district court found against Netflix and ruled that SK was providing a service at a cost and that it would be reasonable for Netflix to “pay something in return”. SK has argued that Netflix will have to pay around million 2 million for the 2020 carrier alone. Netflix’s appeal against the decision is set for December.
Netflix has proposed a hardware solution called Open Connect Appliances, which helps ISPs to efficiently route traffic through local data centers faster and cheaper than accessing foreign servers. But it says SK Broadband did not accept his offer. “We provide Open Connect Appliances (OCA) free of charge, which has been proven to help ISPs significantly reduce traffic while reducing costs,” the spokesman said.
Meanwhile, Netflix co-CEO and content chief Ted Sarandos recently suggested that “squid games” could be the company’s most successful non-English language show of all time. Series director Huang Dong-hyuk is curious about a sequel to the series.