Just one month after its release, Netflix’s South Korean drama, Squid Game, became the company’s most-watched original show. The show has beat the streaming service’s previous record, which was held by Bridgerton. The South Korean drama has topped the charts in all of the 83 countries where Netflix streams.
This success has resulted in South Korean internet provider SK Broadband launching a case against Netflix claiming that the company has not paid the correct usage fees for the past three years. The internet provider has taken particular exception to the surge in network traffic seen as a result of the success of Squid Game. The company has stated that the traffic generated by Netflix on its network grew to 1.2 trillion bits of data processed per second as of September 2021 – the same month that Squid Game was released. The broadband provider claims it has had to twice make costly upgrades to its network in order to handle the extra traffic that the show has generated. Local laws in South Korea state that the heaviest users of network traffic should pay fees to broadband providers.
Net neutrality is the concept that internet service providers should treat all content equally. Netflix is arguing that SK Broadband’s claim refutes its stance on net neutrality. The streaming service claims that this would effectively result in double billing. Subscribers would pay for both an internet connection through their Netflix subscription, as well as a direct fee for internet access. The company launched its own lawsuit against SK Broadband over the fees, but a court dismissed this claim by Netflix. The ruling stated that Netflix must pay SK Broadband any outstanding fees. However, Netflix has appealed against this.
Video streaming services are becoming increasingly mainstream, with more media giants releasing new services. This serves to place extra burden on internet providers, which are already under pressure given the rise in video conferencing services seen on the back of the pandemic. Should Netflix’s argument regarding net neutrality stand, this would leave little incentive for internet providers to invest big sums in upgrades and capacity increases. This would result in a reduction in the quality of content streamed online, with viewers losing out. What’s more, limits on data usage for consumers could become stricter. Conversely, should Netflix lose its case, this could lead to other streaming services facing charges from internet providers. If this should come to fruition, such costs are likely to be passed on to the viewer through a rise in subscription costs.
Regardless of the outcome of the SK Broadband and Netflix court case, it will be consumers that cover the cost one way or another.