South Korean internet service provider, SK Broadband, sued Netflix to pay for costs related to a surge in online data usage driven by the popularity of its latest show Squid Game. A court in Seoul had earlier stated that Netflix should give 'something' to the internet service provider in return for network usage. Many lawyers in Korea support the idea of content providers paying for significant network usage that is driven by the content they distribute.
Between 2000 and 2020, internet usage around the world has increased by 1,266%. Much of the increase over the past couple of years has been driving by video streaming services. YouTube continues to be the dominant site for video stream with over 1.8 billion unique monthly visitors, however with larger files, longer videos, and high definition content, OOT streaming platforms like Netflix, Amazon Prime, and others have significantly increased the amount of bandwidth being used around the globe.
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What is Squid Game?
Squid Game is a survival drama from South Korea that was released worldwide on 17th September 2021. The show tells the story of 456 players that are down on their luck and struggling for cash. The players participate in various children's games, however losing the games results in fatal penalties. The winner of the contest would have a chance to take home ₩ 45 billion (USD 38.4 million). The show has been extremely popular with both audiences and critics. It has become the first South Korean drama to reach the top ten most-watched weekly tv shows on Netflix globally. The show hit no 1 in 90 countries, including the United States and the United Kingdom. Many of the children's games featured in the series were added into popular online video game platforms.
More about the lawsuit by SK Broadband
In South Korea major content distributors like Amazon, Apple and Facebook pay internet service providers a fee for internet usage. However, Google's YouTube and Netflix are not paying any fees, given that the two websites generate the highest amount of internet usage this has led to some criticism. Last year, Netflix brought its own lawsuit against SK Broadand and filed a complaint in a South Korean court. The company claimed that its obligation ended with creating content and making it accessible. The expenses incurred by SK Broadband are part of its obligations to its users. In its complaint, Netflix also stated that delivery in the Internet world is, " free of charge as a principle". However, the Seoul Central District Court ruled against Netflix and said that SK provided its internet service at a cost. It is "reasonable" for the company to provide SK something in return for the service. Netflix has appealed the ruling and the matter will resume in late December. SK has estimated that Netflix owes them usage fees of ₩ 27.2 billion (USD 22.9 million)
This will be an important case to watch as it could have a ripple effect internationally. A decision for Netflix to pay network usage fees in South Korea could spark similar debates around the world. Have you watched Squid game yet?
Feature image: Wikipedia
1. n.d., 'Key Internet Statistics to Know in 2021 (including mobile)', BroadbandSearch, [available online] available from: https://www.broadbandsearch.net/blog/internet-statistics [accessed October 2021]