Until the past several years, TV had been the main medium for watching news and programs, but the development of smartphones and online platform changed the way people enjoy media. People no longer wait on the couch at home to watch favorite programs. They can now enjoy tons of different contents anytime, anywhere through smartphones and computers. ST discusses the rise of new media focused on YouTube and Netflix…………………………………………………………………………………..Ed
Introduction of New Media
Imagine how our everyday lives had been without smartphones. It was a general scene that people read newspapers and books during their commute to work, and families had a conversation while watching TV. In the past, there was print media like newspapers or magazines, and audio media like radios or records. As technological innovation took place in the 20th century, audiovisual media became popular and, in today’s world, the advent of the Internet ushered in the era of new media. New media refers to the media with more convenient and advanced functions, combining the characteristics of existing media, which independently occurred, with new technologies. From now on, let’s dig into the various aspects of the mass media affected by the new media in several chapters.
Prevalence of Online Platforms
With the prevalence of smartphones, modern people spend plenty of time online. As a result, the online platform market, which is the cornerstone of the new media era, is definitely being developing around smartphones. According to an app internal value research conducted by a smartphone app analysis company, Wise App, the largest growing mobile platform domestically is YouTube. Netflix’s growth rate alone grew from 133 to 269 points early this year, taking the top spot with a 99% growth. While video consumption is continuously rising, YouTube and Netflix, both of which are growing rapidly, are the online video platforms that we need to examine.
A Small TV in Hand, YouTube
YouTube is the world’s largest, free video-sharing site, where users can view, upload, and share video clips. YouTube was first founded in February 2005 by Chad Hurley, Steve Chen, and Jawed Karim, an employee of PayPal. These three founding members came up with a “technique in which everyone can easily share videos” with their friends, thus leading to the birth of YouTube. The following year, in October 2006, YouTube was acquired by Google for $1.65 billion, though many criticized it as a “wrong acquisition.” However, it had not been long before that buyout was proved to be one of Google’s most successful decisions. Now it is one of the best apps in the world.
Reasons for YouTube’s success
Following the video boom, there are two main reasons why YouTube became so sensational. First, it allowed videos of flash* technology. When people uploaded popular video formats such as avi, mov and mpg, they were automatically converted to the flash format. As such, YouTube has made sharing easier among users, minimizing the burden of servers by converting video files to generalized flash at that time. Since 2010, YouTube has supported HTML5-based players rather than flash, reducing the hassle of installing Adobe Flash Player plug-ins in browsers. Second, YouTube is an uploading and a user-driven service. It worked to protect copyrights by introducing content verification technology, and added an automatic translation function to break language barriers so that people in more diverse countries could enjoy watching the videos. In addition to the function of adding comments as feedback, YouTube introduced live video and chat to provide instant communication between content provider and audience. Then the SuperChat feature offered a donation function to support accounts to which you are subscribing. YouTube unveiled a new revenue model called YouTube Red in October 2015. As a satisfactory revenue model, YouTube Red disproves the assessment that Google’s acquisition was “wrong.”
* flash: It is a web authoring tool and software platform that can create vector-based websites. It is concise, efficient, and optimized for transmission. It is slowly being abandoned, as the trend is shifting to HTML5.
Main Revenue of YouTube
About 95% of Google’s current revenue, which includes earnings from YouTube, comes from advertising. Furthermore, 45% of the total advertising revenue goes to Google, while, after tax deductions, the rest is paid to uploaders and creators who supply content to Google Adsense, a service that can only be applied if a channel has more than 1,000 subscribers and 4,000 hours of views per year.
YouTube Premium, Red?
/Willing to Pay for It?
In October 2015, YouTube Red, a paid service, was introduced, and YouTube’s revenue grew. With the birth of YouTube Red, users can watch videos without advertisement by paying $9.99 to $12.99. Background playback is possible when the mobile device’s screen is turned off. YouTube’s original contents, which are exclusive to YouTube Red users, have been released one after another. What sets them apart from other paid video platforms is that the personal creator, the strength of YouTube, can play a leading role in YouTube Red. A classic example is the video content of a reality game, called ‘Scare PewDiePie’ by YouTube star PewDiePie. There are domestic contents, such as documentaries like ‘BTS: BURN THE STAGE,’ web dramas like “TOP MANAGEMENT,” etc.
Emergence of a New Job, “YouTuber”
With the coming of YouTube, a new job called “YouTuber” has emerged and become so popular today. YouTubers are also called one-person media creators, and are in the spotlight because they can be seen on the airwaves. They communicate with their subscribers through videos and live broadcasts, and exchange feedbacks directly. One-person broadcasting and its creators become powerful because of their reach in terms of viewership among people in their 10s and 20s. Such audience naturally interacts and responds in real time by using tools like online messaging applications since childhood. The creators’ method of talking in real time with users, unlike existing celebrities, also suits their cultural codes. As one-person creators has become more influential, generating sponsorship or advertising revenues, “Multi Channel Network (MCN) companies” specializing in planning, producing, and managing creators emerged. A one-person creator belonging to an MCN company receives assistance in the field of copyright management, ad support, celebrity collaboration, as well as opportunities in setting up a fan meet-up, and provides a portion of their profits to the company.
Rise of the New Media Platform, Netflix
Netflix, a rising platform in the new media industry, is an online streaming service that is gaining popularity nowadays. ‘Netflix’ is a combination of the word NET, which means the Internet, and Flicks, which means movies. It was founded by Reed Hastings and Marc Randolph in 1997 at Scotts Valley, California. When they first started the business, there was only one service, a video and DVD delivery by mail. However, in 2007, they expanded their business to include Internet streaming. Today, Netflix has grown as the most popular new media platform among the paid services in the U.S., and their main businesses include a DVD delivery service and Internet streaming service. In the DVD delivery service, customers can order DVDs online for as long as they want by paying a monthly subscription. In the Internet streaming service, subscribers can watch TV programs, movies, and original TV series content by subscribing to the Internet streaming service. Netflix is currently the largest paid video service company in the world, with about 100 million subscribers in more than 190 countries. According to media reports, Netflix started to make inroads into South Korea in 2016. This year, it is strengthening its investment in South Korean contents.
Various Contents Provided by Netflix
Purchase of Publishing Rights
Netflix's Internet streaming service includes TV programs, movies, and original content, a series of Netflix-produced programs. It offers a wide choice of programming, not only American and British productions, but also local ones. Starting with the Korean movie, Okja, which was released last year, Netflix has begun working with Korean production companies to produce various contents. It bought the publishing rights of the Korean drama, Mr. Sunshine, which ended last September. Netflix invested 43 billion won to produce Mr. Sunshine, and then it purchased the copyright, distributing the drama to 190 countries around the world.
Production of Original Content
Netflix is famous not only for its platforms in distributing content, but also as a successful content producer. Netflix started to create its original contents in 2012. I Know Who You Are is one example. This program is a mystery drama starring Korean TV stars. It is meaningful in pioneering new genres of drama and entertainment.
Reasons for Netflix’s Success
Netflix has been so successful in the modern society because its contents are aired without advertisements or restrictions on any screen based on over-the-top media services*. Also, the use of big data is another reason for Netflix’s success. Netflix uses big data to collect information about subscribers, and then reflects those data to create content. House of Cards, an original content from Netflix, is a classic example based on Netflix’s use of big data. Netflix analyzed the collected data during the production of House of Cards to recognize the preference of subscribers on production style, favorite actors, etc. Netflix’s strategy was effective, leading to the success of House of Cards. After winning major awards in the U.S., Netflix's quality content created a positive cycle that would eventually attract more subscribers. The subscription fees paid by subscribers make up most of Netflix's revenues.
* OTT service: An over-the-top (OTT) is any app or service that provides a product over the Internet, bypassing traditional distribution.
Restrictions on Netflix in Korea
Some people argue that the Korean content industry is facing a crisis as a result of the growth of Netflix, so the government must regulate the growth of Netflix. The emergence of Netflix, which has enormous capital power, has even changed South Korea's production and investment system in media. Korean drama production companies prefer collaborating with Netflix, which can produce large-scale films without worrying about cost, over local companies. This situation raises the broadcasting and communication industry’s concerns on the overseas capital poured on domestic contents. If it is the case, Korean companies will eventually degenerate into a subcontractor of content creation in the long run. Thus, the Korea Communications Commission plans to propose a revision to the integrated broadcasting law, which includes introducing the legality of OTT service operators and implementing restrictions on their operations.
Risks of Public TV
Public TV channels are undergoing hardships with the introduction of New Media. An increasing number of people are shifting their attention to New Media like YouTube or Netflix. Nowadays, people no longer sit around the couch to watch their favorite TV programs. New Media has allowed people to enjoy numerous amounts of contents whenever and wherever, free from time and place constraints. Also, new media offer new styles of programming with more appealing contents, while Public TV remains in the past glory, thus failing to satisfy the public appetite.
1. Decrease in viewer ratings – Ratings on people’s total viewing time on TV>
In the past, public TV channels (MBC, KBS, and SBS) were dominant in terms of viewership. Pay-per-view TV weren’t so popular, unlike today. However, it is the other way around today. The graph below shows the current situation. Pay-per-view TV channels like JTBC and CJ E&M are constantly increasing their share through competitive and high-quality contents. Some insist that there is inaccuracy in the ratings because people who are watching TV through their smartphones or new media platforms are not measured. However, there is no doubt Public TV is falling behind, unable to meet current trends.
2. Decrease in advertising revenue
The main source of revenue for Public TV is advertising. However, advertising revenue plummeted from 2.4 trillion in 2005 to 1.4 trillion in 2018, decreasing by 40%. Also, the total share of Public TV in the TV advertising market decreased from 75.8% in 2006 to 55% in 2015. On the other hand, new media keeps on expanding its share, along with the increasing popularity and with the help of lesser advertising restrictions, compared to public TV.
3. High labor costs and fixed costs
Technology and lifestyle trends have changed, but public TV still needs to pay high fixed costs to maintain low usage and unnecessary broadcasting networks. Also, the labor costs for public TV is high, making it harder for them to compete with New Media.
Efforts of Public TV to overcome the current crisis
Public TV is putting producers in the mobile section, working with famous content creators to produce new programming. Public TV is working hard to break away from old formats, which are food, travel, and, family-related contents. Public TV also started entering into the streaming platform, creating contents exclusive to mobile devices. MBC launched an online channel, called MBig TV, providing contents to Naver TV Cast and YouTube, while SBS introduced a channel called Mobidic, airing in 20 different channels, like YouTube, Facebook, Instagram, and Naver. The strategies of Pay-Per-View TV channels can be a good reference, airing programs online first, re-editing them, and then airing them on TV, which became very successful in attracting public attention.
Problems of New Media
Though gaining ground in the modern media industry, New Media are also plagued with several problems. First, New Media creates a gap between classes that can and cannot accommodate information based on the income gap. According to the digital divide theory, in the future, people will be divided between a group with plenty of information and a group with little access to information. Moreover, the gap will grow larger and larger until it will become insurmountable. Then, people in lower socioeconomic classes will not be able to pay for access to the new media, and will continue to remain second-class citizens with limited information. Furthermore, since New Media is based on the Internet, it will continue to expand the space of virtual reality, or cyber communications. This becomes a problem if New Media gains more power through news transmission or public opinion formation since it will be replacing the press. However, it lacks the public responsibility of traditional mass media due to the anonymity of cyberspace sources and its unregulated environment. Lastly, New Media is likely to cause privacy infringement. New Media has enabled people to communicate interactively. When personal information or various data are available online, it can lead to abuse by commercial entities.
Direction of New Media
It is clear that the amount of information that people can access has fundamentally changed in modern society. With the development of technology, the manner of information delivery has changed from a unilateral to a bilateral direction through new media, allowing people to share information freely with each other. Also, people can enjoy diverse contents anytime, anywhere. Furthermore, people can create contents, and distribute them on their own. At this time, people should keep in mind that they should develop proper media consumption habits in order not to deteriorate the original purpose and benefits of New Media. New Media can be a splendid medium in our everyday lives.