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The Battle of OTT Services, Using Product Placement (Brand Integration) as a Strategy

Even if the COVID-19 virus did not take place, the media industry's topic in 2020 would have been ‘OTT service’. Producers and broadcasters holding content, platforms providing online video streaming services, like Youtube and Netflix are all engaged in a war to gain the upper hand in the OTT business, which is considered the future of broadcasting.

In Korea, the OTT market is a competition between the joint venture of broadcasting companies and telecommunication companies such as ‘Wavve’, a combination of three terrestrial broadcasters, and SK Telecom's OKSUSU, and ‘TVING’, a joint OTT service between CJ E&M and JTBC. Recently, ‘Wavve’ has publicly expressed its intention to merge with TVING to counter the powerful global OTT service such as Netflix.

Logo <Waave>, source Wavve

In order to survive in the OTT war, it is clear that competitors from yesterday can become allies today. LG U+ was the first to start a partnership with Netflix and succeeded in attracting new subscribers.

For the past few years, short online video services such as YouTube have been dominating the advertising revenues compared to television advertising revenues. The downfall of original media, which has been in charge of the advertising revenues for the past decades, is a troublesome task for professionals in the advertising market as the new era of media is rising.

OTT service, which provides full video content just like TV, is different. Netflix, TVING, Wavve, Watcha, are all OTT services that have no advertising. Even within YouTube, which mainly consumes short video content, the YouTube Premium service, which allows users to use YouTube without advertising, is rapidly increasing its subscribers.

Due to these circumstances, product placement (brand integration) is widely spreading throughout OTT services. The only way to access subscribers of OTT service is to place brands in the content through collaboration with content producers, which is called product placement.

Korean dramas and entertainment have been actively sold in Southeast Asia, Japan, South America, and other countries around the world before. However, it was impossible for content containing product placement to be broadcasted abroad within a limited marketing period for a particular brand because the time taken from buying the content right to actual airing the content took very long. But now foreign subscribers are able to watch Korean dramas such as "Crash Landing on You" and "Itaewon Class" on Netflix as soon as it is aired in Korea.

Example 1.

TV Series <Itaewon Class>, capture from drama, source JTBC

JTBC's "Itaewon Class" was a content that caught both ratings and popularity, and always remained in the rankings in Korea throughout the show. Later in the series, the main character played by Park Seo-Joon appears on Mercedes-Benz's ‘The New EQC’. Through this process, Mercedes-Benz effectively reached OTT subscribers who could not be reached through broadcast advertising alone, while at the same time exposing their product to global viewers. OTT service is an advertising-free platform, but it can rather be a premium advertising platform that can expose brands without difficulties.

Viewers in the OTT service era do not hate product placement (brand integration) advertisers; instead, viewers support advertisers who financially support the production of their favorite content. In this era, advertisers can see more advertising effects through OTT content.

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