Why YouTube can’t succeed in Korea

Recently, the video sharing juggernaut YouTube made its service available to the Korean market. Initially, many thought that the Korean-language YouTube was being service from within the Korean internet infrastructure.

However, in reality it has been simply translated into Korean and is being serviced from within the United States. Given that YouTube is the world’s most popular video sharing service, many in the Korean IT industry were concerned about the powerful company’s infringement into the Korean market.

However, in the short run it will be impossible for YouTube to be successful in the Korean market. This impossibility stems from three primary factors: the poor video quality of YouTube, an under-developed internet infrastructure for servicing traffic from abroad, and the inability for individualized private videos to find a niche in a mass consumption market.

The first obstacle in YouTube’s venture into the Korean market is its poor video quality. Given Korea’s reputation for having the world’s fastest broadband and most developed internet infrastructure, it should be no surprise that Korea boasts high standards in its video quality. The quality of video from Korean video sharing services approach high-definition quality. Specifically, the resolution of Korean video sharing services is 1280x960, 1500K, which is nearly HD quality.

In other words, Korean users of video sharing services want better video than what YouTube can offer. Although YouTube could upgrade the standards of its video service, it cannot improve upon existing low quality video. Given that YouTube currently lacks the necessary video quality to entice Korean consumers, it will have a difficult time having success in the Korean market. First impressions last forever and Korean consumers will not continue working with a video sharing service that currently does not meet their standards of quality.

Secondly, despite the impressive development of Korea’s domestic interest infrastructure, it currently is unable to offer the same speed of service for sites based on foreign locations. The Korean-language version of YouTube was developed in the home office of a YouTube employee in the United States.

In addition, the server computer for the Korean-language YouTube is also based in the U.S. Many people argue that it simply cannot be the case that Korea’s internet infrastructure currently cannot properly maintain a foreign-based web service. They claim that Korea’s interest speed is one of, if not the fastest in the world. However, they are thinking strictly in terms of domestic-based web service. In truth, the ability of Korea’s internet infrastructure in handle foreign web services is bad.

For instance, Korea’s top video sharing service currently has about 20 Gigabytes of traffic every moment. However, the National Internet Development Agency, a government organization of Korea, has stated that Korea’s internet infrastructure can only handle 48.6 Gigabytes of foreign-based web traffic. This is only half of what NTT, a Japan-based internet company, can maintain. NTT’s infrastructure alone can able to maintain a 100 Gigabytes of foreign-based web traffic.

In other words, a single Japanese internet company can maintain more foreign web traffic than the entire Korean internet infrastructure. In addition, it costs nearly ten times more to maintain a foreign internet network than it does to simply have a domestic one.

Finally, the overall quality of content on YouTube material is low and uninteresting to the average Korean. YouTube has a large amount of videos on its site, but it is mostly private material posted by individuals. For these particular individuals, their videos have much personal value. However, the average frequenter of YouTube has no interest in these postings. Thus, these videos are mostly wasted space.

The large surplus of individual video content won’t make YouTube popular in Korea. Besides, any popular YouTube video content has already been uploaded to Korea’s most popular video sharing services, such as Pandora.tv and Daum.net. In addition, due to cultural differences, many of the private videos that gain popularity in the United States are not interesting in the minds of most Koreans.

Beginning in June of last year, the video sharing service market in Korea began a slowdown in growth. YouTube had begun to sway users of Pandora.tv and Daum.net to use their service. Essentially, YouTube was seeking to expand their content library by convincing users of Korea video sharing services to post their content to YouTube. The ability of YouTube to break into the Korean market stemmed not from superior technology, but from an advantage in larger marketing budgets and investment capital. However, YouTube never made any significant investment in Korean.

Many Korean IT specialists believe that YouTube only wanted the video content of Korea, rather than a genuine interest in investing in development. The video content of Korea is as good as any of the popular content in the rest of Asia. In all likelihood, the Korean-language YouTube site will simply be a hub for Korean content to be sold to other countries using a global site.