Laws on bandwidth fees.
Bandwidth has never been cheaper. According to the National Cable & Telecommunications Association, cost of bandwidth per megabyte has gone down 98% since 2008. So why is Twitch leaving South Korea? Because of its backwards policies on bandwidth costs.
In a post on the official website this week, Twitch CEO Dan Clancy explained that the company is leaving South Korea. Completely. This is due to Korean laws on bandwidth costs making operating in the country extremely unprofitable. According to the post, hosting in South Korea costs ten times as much as it does in other countries, even after drastic cuts to services to lower costs.
Ultimately, the cost to operate Twitch in Korea is prohibitively expensive and we have spent significant effort working to reduce these costs so that we could find a way for the Twitch business to remain in Korea. First, we experimented with a peer-to-peer model for source quality. Then, we adjusted source quality to a maximum of 720p. While we have lowered costs from these efforts, our network fees in Korea are still 10 times more expensive than in most other countries. Twitch has been operating in Korea at a significant loss, and unfortunately there is no pathway forward for our business to run more sustainably in that country.
Clancy goes on to explain that Twitch is working with other providers to transition Korean streamers over to other platforms, although they may eventually be out of luck as increasing viewership will presumably only lead to more companies pulling out of the country due to the inability to turn a profit.
Service ends February 27, 2024.
More on this story as it develops, as there will certainly be more to come.
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