LG Uplus will end its in-house over-the-top (OTT) service U+ Mobile TV at the end of May. Following KT and SK Telecom, LG Uplus is also shutting down its standalone mobile OTT, bringing an end to all OTT services operated independently by the three telecom companies.
According to ChosunBiz reporting compiled on the 6th, LG Uplus will end the U+ Mobile TV service at the end of May and unveil a new service, U+ TV Mobile, linked with internet protocol television (IPTV) at the end of this month. The new service is said to focus on strengthening the video-on-demand (VOD) consumption experience connected with IPTV. Features reportedly include watching VOD paid for on IPTV via smartphone and controlling IPTV with a smartphone.
This is not the first time telecom companies have exited OTT. SK Telecom integrated Oksusu into Wavve in 2019, and KT operated its own OTT, Seezn, before handing it over to Tving in 2022. With LG Uplus joining in, the era of telecom-only mobile OTTs is effectively coming to an end.
The industry sees the decision as aligning with President Hong Bum-Shik's "selection and concentration" strategy. The judgment is to shed unprofitable noncore businesses and put more weight on an IPTV-centered media business, where it has relatively stronger competitiveness.
In fact, user metrics for U+ Mobile TV showed a clear decline. According to Mobile Index, the monthly active users (MAU) of U+ Mobile TV fell more than 50%, from 1,738,783 in Jan. 2022 to 832,205 in Jan. this year. By contrast, Netflix's MAU in the same month was tallied at 15,915,632, widening the gap to a 19-to-1 level.
A broadcasting industry source said, "As the OTT market has been reorganized around Netflix, Coupang Play, Tving, and Wavve, it has become difficult for telecom-only OTTs to maintain competitiveness," adding, "The burden of content investment has grown, but they lagged in the battle for subscriber scale, making it hard to secure profitability."
Instead of continuing its OTT business, LG Uplus decided to double down on new businesses linked to IPTV. While IPTV subscribers are increasing, profitability fell short of expectations due to declining VOD revenue. In last year's media results for LG Uplus, IPTV subscribers rose 2.9% year over year to 5,739,000, but IPTV business revenue did not grow due to the impact of falling VOD revenue. Last year's IPTV business revenue was 1.3271 trillion won, slightly down from the previous year's 1.3277 trillion won.
A telecom industry source said, "Ultimately, as it has become clear that expanding subscribers alone makes it hard to generate revenue, the strategy appears to be to boost VOD consumption with a new service that combines IPTV and mobile rather than maintaining a mobile OTT."
An LG Uplus official said, "We plan to terminate our in-house OTT service and are preparing to launch a new service linked with IPTV soon."