YouTube, which has seen its market share in Korea grow by nearly 40 times in the last 6 years, is now facing a fallout with a coalition of domestic broadcasting companies after failing to secure a deal for more competitive advertising revenue rates, local outlet CNB News reports.
The coalition, which consists of MBC, SBS, CJ E&M, JTBC, Channel A, MBN and TV Chosun, makes up nearly 60 percent of domestic television viewership in the country.
Earlier in June, the seven broadcasting companies formed an advertising agency for streaming services in hopes of offsetting increasing production costs associated with providing online content.
The ad agency, Smart Media Rep (SMR), soon struck a deal with Naver TV Cast, a domestic video-sharing website, for a revenue share of 90 percent for the broadcasters and 10 percent for Naver TV Cast. SMR was looking for a similar deal with YouTube, but Google adamantly stuck to its universal 45 percent slice of advertising revenue.
As a result, YouTube users in Korea now see a message, pictured above, plastered on their screens when viewing a video from any of the coalition broadcasters. Viewers outside of Korea, however, will still be able to watch content provided by these networks.
A representative for SMR said in a statement that a 9-to-1 split is not impractical, "considering that broadcasting companies are accountable for production costs as well as the system and platform."
SMR is also in the process of finalizing a deal with Daum Kakao's video streaming website, Daum TV Pot.
KBS, the largest TV network in South Korea, is not part of the broadcasters' coalition for the time being, as it is a public corporation funded by the government and license fees.