Netflix has settled its network usage dispute with Korea’s SK Telecom and its ISP subsidiary, SK Broadband.
Under a new partnership agreement announced Monday, SK Telecom will start bundling, beginning in the first half of 2024, Netflix Basic With Ads service in its subscription service, T Universe.
SK Telecom will also explore opportunities to use its AI technologies with Netflix. These tools include “conversational” UX and personalized recommendation technologies.
The partnership agreement ends a tiff that began ramping up at the beginning of 2021, when a South Korean court ruled that Netflix owed SK Broadband $23 million for the additional traffic on its network caused by subscribers streaming hits such as the locally produced drama series D.P.
The dispute ramped up further when Netflix debuted its Korean-produced sci-fi series Squid Game, which became not only a huge hit locally but also Netflix’s most watched show ever globally.
As a salve, Netflix offered SK Telecom the use of its content delivery network, Open Connect, but was turned down.
It's unclear if the two companies ultimately pivoted to a paid peering relationship, similar to the agreement Netflix has with Comcast in the U.S.
The Asia-Pacific region in which South Korea resides is Netflix's smallest quadrant, generating the streaming company $954 million in the second quarter (vs. the $3.6 billion garnered in the U.S. and Canada).
Netflix has close to 40 million subscribers in the “APAC” region. According to a report issued last year by Korea's Ministry of Science, Netflix has only around 1.17 million paid subscribers in Korea.
