The Netflix series Squid Games was such a viral hit that a South Korean internet service provider filed a civil lawsuit against the streaming service over a massive surge in network traffic in 2020. Three years later, Netflix and SK Broadband agreed to set aside their differences and work together.
“Moving forward, SK Broadband and Netflix will end all disputes with the signing of today’s partnerships and collaborate as partners for the future,” the companies said in a joint statement. “This mutual decision stems from both parties’ shared foundational principle that prioritizes customers.”
Netflix’s Vice President of APAC Partnerships, Tony Zameczkowski, said the collaboration will “enhance entertainment experiences for a broader Korean audience.” Netflix will integrate AI technologies developed by SK Broadband and parent company SK Telecom to expand the scope of delivering content to customers in South Korea.
The settlement heads off a broader debate about who should bear the financial burden when a viral piece of content overloads a network. After Squid Games, based in South Korea and starring Korean actors, blew up, SK Broadband requested Netflix share the additional expenses. Netflix, however, argued that paying for access sets a bad precedent because it goes against net neutrality, potentially leading to higher bills for members.
The settlement includes offering bundle packages from Netflix using SK Broadband’s IPTV and SK Telecom’s service plans. Customers can choose from different price tiers, including an ad-supported plan and products for “easier access and payment options.” Artificial intelligence products, such as Conversational UX and Personalized Recommendation Technologies, will roll out to customers over the first half of 2024.
Netflix was not immediately available for comment.
The “strategic partnership” aims to settle disagreements over maintenance costs from an increase in network traffic estimated at $23 million, according to The Verge. At the time, Netflix said it would “seek open dialogue and explore ways of working with SK Broadband in order to ensure a seamless streaming experience for our shared customers,” according to CNBC. South Korean lawmakers raised the issue with other content platforms that generate tons of traffic for not contributing to network usage fees.