Examining impact of price increase by OTT companies on OTT user number in the Korean OTT market = Examining impact of price increase by OTT companies on OTT user number in the Korean OTT market

다국어 초록 (Multilingual Abstract)

This study examines how subscription price increases by major OTT platforms
in South Korea affect user behavior, particularly the number of Monthly Active Users
(MAU). The OTT platform market is a representative example of a two-sided market,
where one side is single homing and other side, consumers, is multi-homing. In late 2023,
several leading OTT platforms, including Netflix, Disney+, and YouTube, raised their
prices simultaneously, offering a quasi-natural experiment to assess how such pricing
behavior influences user engagement.
To estimate the causal impact of these price hikes, this study employs both
difference-in-differences (DiD) and triple-differences (DDD) regression models, using
music apps and webtoon/webnovel apps as control groups. The dataset consists of panel
data on 82 mobile apps from January 2022 to March 2025, using monthly active user
statistics provided by a third-party data company.
The results reveal that OTT platforms that raised their prices experienced a
statistically significant increase in MAU, while platforms that did not raise prices showed
no meaningful change. The estimated DDD effect was robust across different
specifications and control groups, suggesting a heterogeneous treatment effect
concentrated among dominant platforms. Event study analysis further supports this
finding, showing that usage of price-increasing platforms increased shortly after the price
hike. However, user behavior appeared to be influenced by anticipatory factors such as
pre-announced price changes or the release of exclusive content.
These findings suggest that OTT consumers are price-inelastic or locked-in in the
dominant platforms. Thus, dominant OTT platforms may possess sufficient market power
to raise prices without losing users, potentially accelerating a shift from a multi-homing
to a single-homing market structure. From a policy perspective, the results highlight the
need to monitor market concentration in digital platform markets and to consider
behavioral or structural regulatory tools that ensure competitive neutrality and consumer
welfare.

목차 (Table of Contents)

• 1. Introduction 1
• 1.1. The purpose of the study: platform economy and government policy 1
• 1.2. The scope of the study: Korean OTT market 3
• 2. Theoretical Background and Research Questions 5
• 2.1. Theoretical background for multi-sided platform economy 5
• 2.2. Definition of OTT market and its representativeness as a platform economy 7
• 2.3. Theoretical background of OTT market 8
• 2.4. Research Questions and Hypothesis 12
• 3. Research Method 13
• 3.1. Methodology 13
• 3.2. Identification Strategy: DiD and DDD Models 15
• 3.3. Event Study Specification 19
• 3.4. Variables and Data specifications 21
• 4. Results 25
• 4.1. Results of the DDD Analysis on OTT platforms 25
• 4.2. Results of the Event Study Analysis on each OTT platforms group 27
• 4.3. Results of the DiD Analysis on whole OTT apps 35
• 5. Discussion 36
• 5.1. Interpretation of Empirical Findings 36
• 5.2. Implications for Platform Market Regulation 38
• 5.3. Study Limitations and Future Directions 41
• 6. Conclusion 44