Current:Home > StocksTwitch says it’s withdrawing from the South Korean market over expensive network fees-InfoLens
Twitch says it’s withdrawing from the South Korean market over expensive network fees
View Date:2024-12-23 20:18:13
SEOUL, South Korea (AP) — Twitch, a popular video service, will shut down its struggling business in South Korea, a decision its chief executive blamed on allegedly “prohibitively expensive” costs for operating in the country.
In a blog post announcing the company’s plan this week, Dan Clancy said the network fees the company has been paying to South Korean internet operators were 10 times more than in most other markets. He did not provide specific numbers to back such claims.
“We’ve made the difficult decision to shut down the Twitch business in Korea on Feb. 27, 2024,” Clancy said in the post. Twitch was able to lower costs by limiting video quality, he said, but “our network fees in Korea are still 10 times more expensive than in most other countries.”
A platform popular with video game fans, Twich downgraded the quality of its video services in South Korea to a resolution of 720 p from 1080 p in September 2022, citing a need to reduce costs. Later that year it blocked South Korean streamers from uploading video-on-demand content.
The moves drew vehement complaints from South Korean users and are thought to have encouraged many to switch to other services like YouTube or South Korean streaming sites like Afreeca TV.
Twitch likely would have faced tougher competition in South Korea next year with Naver, the biggest domestic internet company, reportedly planning to launch live streaming services for online video game leagues.
The planned withdrawal from South Korea is the latest sign of business struggles at Twitch, which announced in March that it was laying off 400 employees, saying that its “user and revenue growth has not kept pace with our expectations.”
“Twitch has been operating in Korea at a significant loss, and unfortunately there is no pathway forward for our business to run more sustainably in that country,” Clancy wrote in his blog post.
South Korean telecommunications companies that operate internet networks have feuded in recent years with global content providers like Network and Google, which complained of excessively high charges. There are similar conflicts between those companies and internet providers in Europe.
In September, Netflix said it reached an agreement with SK Broadband, a South Korean internet provider, to end a legal dispute over network fees. The companies did not release the terms of their settlement.
Jung Sang-wook, an official from the Korea Telecommunications Operators Association, an industry lobby compromised of the country’s major telecommunications providers, said he had no way of verifying Clancy’s claims about network fees, which are negotiated individually between companies and sealed with non-disclosure agreements.
“Similar services like Afreeca TV have been enjoying profits, so Twitch’s decision could be based on the company’s broader management problems,” Jung said. The association in October issued a statement last year criticizing Twitch’s decision to lower the resolution of its videos, saying that caused many users to complain to telecoms providers that were “providing services smoothly without any problems.”
veryGood! (92)
Related
- Nicole Scherzinger receives support from 'The View' hosts after election post controversy
- The Amazing Race's Oldest Female Contestant Jody Kelly Dead at 85
- Is Keke Palmer Dating Darius Jackson After Relationship Drama? She Says…
- Molotov cocktail thrown at Cuban embassy in Washington, DC, Secret Service says
- Roy Haynes, Grammy-winning jazz drummer, dies at 99: Reports
- Sly Stallone's 'Expendables 4' belly flops with $8.3M, while 'Nun 2' threepeats at No. 1
- Bachelor Nation's Gabby Windey and Girlfriend Robby Hoffman Share Insight Into Their Rosy Romance
- YouTube CEO Neal Mohan says tough content decisions can be tradeoff between two bad choices but safety is company's North Star
- Vegas Sphere reports revenue decline despite hosting UFC 306, Eagles residency
- Drug cartel turf battles cut off towns in southern Mexico state of Chiapas, near Guatemala border
Ranking
- What are the best financial advising companies? Help USA TODAY rank the top U.S. firms
- Ex-NASCAR driver Austin Theriault running to unseat Democratic Rep. Jared Golden in Maine
- Russians committing rape, 'widespread' torture against Ukrainians, UN report finds
- Myanmar media and resistance force report two dozen fighters killed in army ambush
- Indiana man is found guilty of murder in the 2017 killings of 2 teenage girls
- Indiana teen working for tree-trimming service killed when log rolls out of trailer, strikes him
- Horseless carriages were once a lot like driverless cars. What can history teach us?
- Pilot dies in crash of an ultralight in central New Mexico
Recommendation
-
New Jersey will issue a drought warning after driest October ever and as wildfires rage
-
AP Interview: Jennifer Granholm says US aims to create nuclear fusion facility within 10 years
-
Japan’s Kishida unveils the gist of a new economic package as support for his government dwindles
-
Russian drone strikes on Odesa hit port area and cut off ferry service to Romania
-
Fantasy football buy low, sell high: 10 trade targets for Week 11
-
Ex-NASCAR driver Austin Theriault running to unseat Democratic Rep. Jared Golden in Maine
-
If you struggle with seasonal allergies, doctors recommend you try this
-
Sophie Turner and Joe Jonas Reach Temporary Agreement Over 2 Kids Amid Lawsuit