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(LEAD) Netflix raises subscription fees in S. Korea amid controversies over network usage

All News 17:43 November 19, 2021

(ATTN: RECASTS throughout with details)

SEOUL, Nov. 19 (Yonhap) -- Netflix has raised its monthly subscription fees in South Korea as a vice parliamentary speaker proposed a bill to keep the U.S. streaming giant from getting a free ride on networks.

Netflix's premium plan jumped to 17,000 Korean won (US$14), up 17.2 percent from 14,500 won, in the latest subscription plans posted on its website Thursday.

The standard plan rose to 13,500 won, up 12.5 percent from 12,000 won. The basic plan remained unchanged at 9,500 won.

The price hike -- the first since Netflix launched its streaming service in South Korea in 2016 -- came amid criticism that Netflix has refused to pay for network usage despite increased data traffic in the country.

The total network traffic in South Korea is expected to rise up to 8.9 million terabytes (TB) at the end of this year, a sharp hike from 3.7 million TB in 2017, according to government data.

South Korean telecom operators made huge investments in recent years to upgrade and maintain the latest generation networks, but they became sidelined as Netflix and other huge traffic generators free ride on their networks.

On Friday, Kim Sang-hee, a vice speaker of the National Assembly, proposed a bill that would prevent Netflix and overseas content providers from getting a free ride on the South Korean networks.

Network traffic generated by overseas content providers, including Netflix and Google, account for 78 percent of the total usage in South Korea as of end-June, though they continue to neglect the issue, the lawmaker said.

The bill mandates the content providers sign an agreement on network usage fees upon request by South Korean internet service providers.

In September, SK Broadband filed a lawsuit against Netflix to demand network usage fees, saying that the U.S. streaming giant did not come forward for talks even after a local court ruled in June that it is "reasonable" for Netflix to provide something in return for the service.

SK Broadband said Netflix's traffic on its network rose to 1,200 gigabits per second (Gbps) as of September this year from 50 Gbps in May 2018 in an explosive growth amid the popularity of Korean-language drama series, such as "Squid Game."

The dystopian series topped the non-English popular TV show list with an aggregate 1.65 billion hours of viewing in the first four weeks of release, becoming the most-watched Netflix content of all time. It is equivalent to 188,400 years in total.

Dean Garfield, vice president of global public policy at Netflix, said earlier this month in Seoul that he is well aware of controversies surrounding costs from increased network traffic due to a surge of viewers in South Korea. The number of subscribers in South Korea is estimated to have increased to about 4 million.

Still, he did not say whether Netflix will pay for its network usage.

An official at SK Broadband said the company has not received any contact from Netflix regarding the network traffic since his visit to Seoul.

This image from Yonhap News TV shows the logo of global video streaming giant Netflix and its services. (PHOTO NOT FOR SALE) (Yonhap)


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