▲ ⓒNunu TV homepage screen capture
Domestic OTT and webtoons are suffering from the operation of illegal sites that allow viewing without payment. The repeated arrests of site operators are causing setbacks in overseas business expansion.
According to the industry on the 14th, the Copyright Crime Investigation Unit of the Ministry of Culture, Sports and Tourism arrested the operator of the illegal streaming site ‘Nunu TV’ on the 9th. The similar website ‘TV Wiki’ and the illegal webtoon site ‘Okay Toon’ both announced that they had been shut down. However, even after the arrest and blocking measures, TV Wiki continues to operate with only the address changed.
Damage to domestic OTT and webtoon platforms is accumulating due to the proliferation of illegal sites. The industry estimates that Nunu TV alone has suffered copyright damage worth about 5 trillion won so far. According to website traffic analysis company SimilarWeb, the number of visits to illegal webtoon site A in October was 42.79 million, which far exceeds the number of visits to Naver Webtoon (26.66 million) and Kakao Webtoon (4.81 million) during the same period.
As the crackdown on illegal sites becomes meaningless, it is having a negative impact on performance. Naver Webtoon’s domestic paid content sales in the third quarter amounted to $91.4 million, a 5.4% decrease from last year ($96.7 million). The number of monthly paid users also decreased from 4.2 million last year to 3.9 million this year.
As illegal sites from overseas encroached on traffic, domestic companies decided to withdraw from the local market. Kakao Entertainment (hereinafter referred to as Kakao Entertainment) recently announced that it would withdraw from the Indonesian and Taiwanese webtoon markets following Europe (France), and NHN also closed its Taiwanese business.
The superficial reason revealed by Kakao Entertainment is to select and focus on the North American and Japanese markets, but it can be interpreted that it is because profitability has deteriorated due to the inability to control over 100 illegal Indonesian sites. Previously, in 2022, Kakao Entertainment’s P.CoK team, a TF (temporary organization) to respond to illegal global webtoon distribution, achieved success by blocking 15,607 cases of Indonesian illegal content and shutting down 206 Telegram groups that were distribution bases. did it A campaign to eradicate illegal distribution was continuously carried out, but it fell short of blocking it at the source.
The government is preparing measures to protect content and IP (intellectual property rights) and protect the OTT and webtoon industry ecosystem, but it is not enough.
The Korea Communications Standards Commission (CCSC) submits illegal streaming sites discovered every month to the Communications Standards Subcommittee twice a week and makes a decision to block access to them. However, even if it is blocked, it is not effective in that it can be easily circumvented by creating an alternative site where the operator changes part of the URL address. Investigations overseas are more difficult because they require international cooperation and there are limits to the exercise of public power by investigative agencies.
In addition to self-monitoring and technical measures, companies have also developed their own response measures. Naver Webtoon filed a lawsuit with the Suwon District Court in October, demanding 1 billion won in damages from those who operated illegal webtoon and web novel sites. It is intended to demonstrate the principle of zero tolerance toward illegal distribution, but compared to the scale of damage and the profits of illegal distribution sites, the amount is small and is evaluated as lacking in effectiveness.
The main source of income for illegal streaming and webtoon sites is illegal gambling banner advertisements that are always displayed on the site, and the amount is known to amount to billions of won. Analysis shows that as of last year, Nunu TV’s profits from illegal gambling advertising amounted to at least 33 billion won.
In order to solve the problem of illegal distribution of content, some say that it is important to block illegal site income sources and identify operators. An industry official said, “The measure to block access addresses has clear limitations in that technical bypass is possible. It is important to establish advertising regulation measures to block sources of income, and efforts should be made to reveal the identity of the operator through cooperation with overseas investigations.” emphasized.
