The global home appliance market has entered a stagnant phase. The pandemic boom is long gone, and growth in key categories such as refrigerators, washing machines and air conditioners has slowed. Even LG Electronics, the No. 1 player in appliances, faces a situation where it is difficult to spur purchases with spec competition or quality promotion alone. The solution LG Electronics pulled out was "variety content."
In Aug. last year, LG Electronics partnered with Amazon Prime, an online video (OTT) platform in the United States, to produce its own reality show, "House of Survival." The show puts participants into a home without appliances to maximize inconvenience, and gives them LG appliances one by one as they complete missions. By contrasting the problems that arise without appliances with scenes of immediate improvement after introducing the products, it explained the question, "Why are appliances necessary?" Upon release, the program topped viewing time in the reality genre on LG Channels in the U.S., becoming a hit.
This content directly addressed the challenges facing LG Electronics. As the question of "why replace again" has become important for consumers who already own appliances, it was designed to let them experience everyday inconveniences, time savings and stress reduction that are hard to convey through ads. By emphasizing felt necessity over feature descriptions, the strategy aimed to rekindle replacement demand in the North American market.
In Korea, it sponsored "Culinary Class Wars Season 2," a Netflix cooking variety show set to be released soon. Chefs are expected to use LG ovens, cooktops and refrigerators in actual cooking. LG Electronics sponsored Season 2 following Season 1 as a partner. Dozens of premium LG Signature and Objet Collection products will be placed throughout the set, which is expected to have a real-use promotional effect.
Facing stagnation in its appliance business, LG Electronics is accelerating a TV business restructuring and the expansion of its advertising platform. As it has become difficult to secure revenue through TV sales alone due to low-priced offensives by Chinese makers, it is nurturing "LG Channels," a webOS-based FAST (free ad-supported television) service, as a global growth axis. As of March this year, global viewing time for LG Channels rose more than 40% from a year earlier, and the number of channels expanded to 4,000. The service has grown to 36 countries, and partnerships with global content corporations such as NBCUniversal, BBC Studios and Sony have been strengthened.
The MS Business Division, which oversees the TV business, posted an operating loss of 191.7 billion won in the second quarter alone this year. Revenue (4.2934 trillion won) fell 13.5% from a year earlier. In contrast, webOS platform revenue topped 1 trillion won last year, emerging as a new cash cow. LG Electronics has announced plans to integrate display-based businesses not only in TVs but also in laptops, monitors and commercial displays to expand advertising and content revenue. In-house content production such as "House of Survival" aligns with this platform strategy.
Industry officials said LG Electronics is shifting from a manufacturer that simply sells appliances to a new business model that combines content and an advertising platform. In a period of appliance stagnation, explaining "why appliances are necessary" through content and growing an advertising platform instead of relying on TV sales shows a commitment to revamping its business structure.
While the reach of its content and the conversion effect on purchases remain to be proven, one trend seems clear. LG Electronics is moving from a corporations that lists product features to a corporations that stages the experiences that appliances change. Attention is on whether these attempts can shake up the landscape of the stagnant global home appliance market.