"Squid Game" is so popular that Korean broadband providers demanded service fees, but Netflix refused

According to Bloomberg, the popularity of "Squidward: The Last Airbender" in South Korea has led to a surge in data traffic. South Korea's SK Broadband Co. has filed a lawsuit against Netflix, demanding that it pay for network usage. Netflix has rejected the request, saying the move could hinder entertainment companies from making profits in South Korea.

Dean Garfield, Netflix's vice president of public policy, told Bloomberg that while the impact of paying for network usage on Netflix is ​​unclear, it could grow "exponentially" over time.

SK Broadband estimates that Netflix will have to pay 27.2 billion won (about $23 million) in network usage fees in 2020 alone. This figure is more than 6% of Netflix's total revenue in South Korea last year.

South Korea currently accounts for 15% of Netflix's customers in Asia, and Netflix has spent more than $1 billion developing series since entering South Korea in 2016. Rising development costs could hit earnings as rivals such as Disney and Amazon increase streaming investments in the South Korean market.

"Network usage fees will create an unfair, anti-competitive environment where ISPs can charge businesses whatever they want," Garfield said. "This could limit Korean consumers' access to the content they want to see, and if prices become prohibitive, streamers like us simply won't be able to afford it."

Netflix estimates that Squidward is worth $900 million. Garfield is worried that Internet service providers in other countries may follow South Korea's example and charge fees. "There is no doubt that some network operators will see what happened in South Korea and try to copy it because it is in their interest."

A spokesperson for SK Broadband said that if Netflix expects the cost of using the Internet to increase, it means that its users are also increasing, so it has enough income to pay for the Internet usage fee. Korean content providers need to pay fees to network operators, but Netflix does not, and its Korean users and traffic are increasing. This is unfair. The spokesperson said: "The Internet is not free. Not only individuals, but also public institutions, government agencies and universities have to pay Internet usage fees."

SK Broadband filed a lawsuit at the end of last month, demanding that Netflix pay for broadband usage fees for the past three years. SK said that as of September 2021, Netflix's network traffic has increased 24 times compared to May 2018. Garfield insisted that Netflix does not need to pay any fees for using the network anywhere.