KT to raise YouTube Premium usage fee from May 2024

[Photo by Yonhap]

South Korean mobile carrier KT Corp. will raise the usage fee for Google LLC’s YouTube Premium provided in its over-the-top (OTT) subscription service.

The move comes in response to the increase in OTT streamlining service prices. The fee rise is expected to diminish the benefits of the telecom-OTT bundled product, which has been relatively affordable for consumers.

According to KT on Tuesday, the company will increase the monthly subscription fee for YouTube Premium by 47.1 percent from May 1st, 2024. The fee, including value-added tax, will be adjusted to 13,900 won ($10.4) from 9,450 won.

Industry insiders noted that the move was inevitable as global OTT operators adjusted their prices, with YouTube raising the price of its premium subscription plan by 42.6 percent to 14,900 won from 10,450 won in November 2023.

“We are raising the price according to YouTube Premium’s partnership policy,” a KT official said. “But the current rate will be applicable until April 30th.”

KT also discontinued Netflix service subscriptions in December 2023 due to the termination of Netflix’s basic product.

While SK telecom Co. and LG Uplus Corp. are still operating the same subscription services linked to YouTube Premium, they are also considering fee increases.

“Fee changes are possible,” an unnamed SK official said. “The combination products that have been operated to date could change depending on the partner.”

An LG Uplus official added that the company is also “considering an increase.”

The Ministry of Science and ICT has been in constant contact with telecom and OTT companies to discuss measures against “streamflation,” and is pushing for the creation of products that combine OTT with low-cost rate plans. Discussions were also held with overseas OTT operators, including Netflix and Disney+, on Monday, to discuss diversifying fees.

While measures to reduce the burden of OTT prices are expected to be announced soon, a practical measure under consideration is including ad-based products to the telecom companies’ low-cost rate plans.

Another option is to increase benefits by expanding products such as combined OTT packages targeting young people.

Another possibility is a rate plan that allows for switching the OTTs used each month, and youth rate plans, with discount benefits when multiple subscribers join at the same time.

“In the case of Korean OTTs, various rate plans, including long-term subscription promotions and annual rate plans, are already in place,” an industry official said. “The industry is still at the stage of explaining the process of creating combined products to the government.”

Meanwhile, there are concerns about the possibility of discrimination between Korean and foreign OTT platform operators, with industry observers noting that the burden of reducing subscription fees could fall solely on Korean operators.

There is also speculation that telecom companies, who saw an operating profit of over 4 trillion won for the fourth consecutive year, could bear the burden of reducing subscription fees.