COVID-19, over-the-top services, and the future of pay television: the case of South Korea

A drastic increase in over-the-top (OTT) subscriptions and sales after COVID-19 may threaten the future of pay television (pay TV) in South Korea. This study examines changes in the usage time of pay TV and OTT services, particularly after the COVID-19 outbreak, and assesses whether the termination of pay TV subscriptions (cord-cutting) will occur in South Korea. Empirical results indicate that the more time an individual spent on OTT services, the less time they spent on pay TV, thereby indicating a substitution relationship between pay TV and OTT services. However, the pay TV usage time of OTT service users remained at a high level and did not decrease. In addition, the results confirm that the drastic increase in OTT service usage time, particularly after the pandemic outbreak, was mainly due to the increase in the number of OTT service users, not the increase in OTT service usage time per OTT service user. These findings suggest that massive cord-cutting will not occur in Korea without drastic changes in media market conditions.