'We're all dying here': South Korea's cable TV industry faces extinction as OTT surge deepens crisis

"Tzuyang Myeot Kki," a new variety show launched by ENA, which has been struggling with low ratings. [ENA]

South Korea's cable TV industry is staring down what insiders are calling an existential crisis, battered by the advance of streaming platforms such as Netflix and Tving. With ratings hitting zero and every broadcast deepening the red ink, the mood inside the industry has turned desperate. "We're all going to die at this rate," is a phrase now heard openly among operators.

The pressure is compounding from multiple directions: subscriber losses, falling reception fees and declining home-shopping transmission fees are converging to squeeze revenues. Analysts now warn that subscription fee revenue for cable system operators — which once topped 1 trillion won (about $651 million) — could shrink to the 340 billion won range by 2030. Major pay-TV operators launched voluntary retirement programs last year, and their share prices have been in a prolonged slide, deepening the sense of industrywide alarm.

Lee Jong-kwan, a senior expert at law firm Sejong, said Monday at a pay-TV policy seminar that cable system operators' subscription fee revenue could fall from 571.9 billion won in 2024 to as low as 348.5 billion won by 2030 in a worst-case scenario.

That would represent a decline of more than 220 billion won over six years.

The subscriber data tells the same story. Total pay-TV subscribers stood at about 36.15 million in the second half of last year, down 76,030 from the previous half-year period. While IPTV providers have held their subscriber base relatively steady, the decline at cable system operators and satellite broadcasters has been sharp. The trend reflects a sustained wave of cord-cutting driven by OTT usage surpassing 80 percent penetration and growing uptake of paid streaming services.

The revenue structure is deteriorating just as quickly. Home-shopping transmission fee revenue for cable operators fell 3.3 percent year-on-year to 707.9 billion won in 2024. Meanwhile, program licensing fees climbed 51.1 percent — from 230 billion won in 2011 to 347.5 billion won in 2024 — a stark contrast to subscription fee revenue, which more than halved over the same period, dropping from 1.2025 trillion won to 571.9 billion won.

Logo of the Korea Cable TV Broadcasting Association. [Korea Cable TV Broadcasting Association]

Worsening profitability has triggered workforce restructuring. Even major pay-TV operators backed by large conglomerates — KT Skylife, LG HelloVision and HCN — have carried out voluntary retirement programs.

What concerns industry observers is that the cable TV crisis has grown beyond a question of individual operators' earnings into a broader challenge for pay-TV policy as a whole. Cable system operators must maintain public-service obligations — running local channels, broadcasting emergency and election coverage, and meeting mandatory programming requirements — even as subscribers and revenues shrink. OTT platforms, by contrast, operate in a comparatively light regulatory environment and continue to expand their content investment and service offerings.

Noh Chang-hee, director of the Digital Industry Policy Research Institute, told the seminar Monday that the government had missed repeated opportunities to redefine the role of cable system operators during merger-and-acquisition-driven restructuring. "The government had multiple chances to reestablish what cable operators stand for during M&A-driven restructuring, but it failed to act, and as a result their standing has become even more ambiguous," he said. He added that if operators are forced to exit the market due to structural financial difficulties, the government's own role will inevitably come under scrutiny.

Noh also argued that existing regulation is actively blocking innovation in pay TV. "Pay-TV operators are trapped in a path-dependent regulatory regime where even launching a single new product requires de facto approval," he said. "These outdated regulations are constraining innovation, turning pay TV into an inferior good and accelerating the industry's decline."

An OTT streaming service image. [Getty Images Bank]

Voices inside and outside the industry are growing louder that the government cannot treat cable TV's troubles as simply a natural market exit. If financially distressed cable operators leave the market without a managed transition, the fallout could ripple through consumer protections, local information distribution and content payment structures. Calls are mounting for regulators to realign fee and channel regulations with current market realities, ease the broadcasting development fund burden, and establish a structured exit mechanism for operators that can no longer sustain their businesses.

Meanwhile, the industry's distress is written plainly in the market. KT Skylife's share price has fallen roughly 30 percent over the past three years, sliding from the 6,000-won range to the 4,000-won range, while LG HelloVision has dropped about 54 percent, from the 4,000-won range to around 1,900 won. Analysts attribute the declines to the combined weight of subscriber losses, deteriorating profitability and dimming growth prospects.

rim@heraldcorp.com