Experts pointed out that YouTube is neglecting reinvestment in the content industry even though the revenue of Google’s ``YouTube`` is getting bigger in Korean video content market and YouTube is making revenue of several hundred billion won in domestic market. Unlike domestic video service providers, YouTube does not pay local taxes properly and local regulations is not applied to YouTube as much as it is applied to local video content enterprises. Also it does not have to pay for network services in Korea.

According to mezzomedia- digital marketing firm, report on February 22, YouTube has taken the first place with domestic revenue of KRW 116.8 billion in domestic video ads (ads before and after video contents) last year. This figure is estimate that YouTube, as the overseas enterprise, is not obligated to disclose its domestic revenue results and collects the ads in reverse. The industry has predicted that if advertising agencies such as Korea Broadcast Advertising Corp. (KOBACO) collect advertising costs and announce it, YouTube``s advertising revenue will reach over KRW 300 billion last year. Related industry experts observed that YouTube has been making a little over KRW 200 billion in sales for years in Korean market.


The industry experts’ analysis shows that YouTube has been influential since 2009 due to the realization of the Internet real name system (a system in which the user``s real name and resident registration number must be confirmed on the Internet, and the unconstitutional judgment in 2012). At that time, domestic video content operators had gone out of compliance due to regulatory compliance, while overseas operator YouTube allowed virtually non-significant subscriptions, allowing the country to be randomly selected. In the same year, the copyright law stroke out system (a system in which an online service provider sets up a period of less than six months to suspend the account). YouTube has attracted users who were suffering copyright problems without being regulated despite of local video content operators had no choice but to follow the law.

YouTube does not even pay the network fee to the mobile-service companies in exchange for reducing the burden of transit connection cost to be paid by the mobile-service companies by installing the cache server which is located abroad. Domestic companies use more network and users to pay more. However, YouTube is free from this burden. YouTube is a limited liability company and has no obligation to report domestic business results and does not pay local taxes properly.

The industry experts point out that although YouTube is enjoying special benefits in Korean market, it is not willing to invest in local content to strengthen local content ecosystem.

YouTube has selected Korea as a major source of revenue last year and released Asia``s first paid YouTube video service, ``YouTube Red``. However, only one original content was for domestic users. Pop-up Space Seoul, which is a space for video creators for a limited period of time, operates in all nine countries except Korea. YouTube stated that ‘Although We cannot disclose the amount of investment, but we are developing our own video content and supporting video makers’. ‘It is not that we are not investing.’ YouTube added.

The industry expert mentioned that ‘While foreign enterprises are enjoying tax, regulation free business environments, local enterprises, on the other hand, are in reverse discrimination’. He also implied that ‘Imprudent regulation application must be improved’.

By Jin Hyun Jin 2jinhj@


[ copyright ⓒ The Digitaltimes ]