Coupang is following the path to success of’Amazon Prime’ with’Coupang Play’, an online video service (OTT).
Taking the words of Coupang and IT industry officials together on the 25th, it seems that Coupang will create synergies in both e-commerce and online video services, taking the success of Amazon as a mirror.
▲ Coupang’s online video service (OTT)’Coupang Play’ logo.
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Amazon has benefited considerably from a business model that bundles online video services with e-commerce-related delivery services, but Coupang is on the same path.
Coupang’s Coupang Play is provided to premium membership’Rocket Wow’ members. You can enjoy the contents of Coupang Play at no additional cost if you pay the Rocket Wow membership fee of 2900 won per month.
Looking at the price per person for other online video services, Netflix is 9500~14500 won, Wave is 7900~13900 won, Teabing is 5900~9900 won, and Watcha is 7900~12,900 won.
Rocket WoW members have been provided with services such as rocket delivery (free delivery), rocket fresh (early delivery of fresh food), and free returns within 30 days, and online video services have been added.
An IT industry official said, “Coupang seems to be trying to collect additional members through content while holding on to existing Rocket WoW members by taking the initial loss and making price competitiveness ahead.”
Rocket Wow is Coupang’s core revenue model. Coupang saw an operating loss of 7205 billion won in 2019, which is 34.3% less than KRW 197 trillion in 2018, which is interpreted as the impact of launching Rocket Wow in October 2018.
Coupang has not disclosed the number of Rocket WoW members, but it is reported to have exceeded 2.5 million as of May 2019.
If Coupang Play’s content gains popularity, it can also play a role in inducing non-members to join while retaining existing Rocket Wow members.
This strategy is similar to Amazon’s delivery service’Amazon Prime’. The service offers free shipping, music streaming, and free video content to users for $119 per year.
Amazon Prime subscribers reach 150 million worldwide. The sales of’Amazon Prime Day’, a discount event for Amazon Prime members, are estimated to exceed $10 billion this year.
Since 2007, Amazon has been providing Amazon Prime Video, an online video service to Amazon Prime members, and this service is considered to have contributed significantly to subscriber expansion.
Amazon CEO Jeff Bezos also reported at a conference in 2016, “If you can subscribe to videos on Amazon Prime, people will be more likely to subscribe to Amazon Prime and renew it when the subscription period ends,” reported by Business Insiders.
However, in order to use Coupangi Coupang Play as effectively as Amazon Prime Video, it is necessary to increase content competitiveness including original content.
Amazon Prime Video is currently the second largest online video service in the United States. This was partly because Amazon invested heavily in creating the original content for Amazon Prime Video.
It is reported that Amazon invested $4.5 billion in original content creation in 2017 alone.
Regarding this, Reuters analyzed that “Amazon is investing in content with the aim of attracting more Amazon Prime customers and inducing them to buy from Amazon.”
Coupang Play currently only streams domestic and foreign dramas and movie contents. He said he would show off the original production program, but no specific plans have yet come out.
Competition in the domestic online video service market is also getting fiercer.
Disney Plus officially announced its entry into Korea in the first half of 2021, and it is known that HBO Max and others are considering expanding into Korea.
Amazon Prime Video, a model of Coupang Play, is also expected to enter the Korean market in partnership with 11th Street. [비즈니스포스트 이규연 기자]
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