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The Korean Telecommunication Commission has penalized Twitch with a fine worth 435 million won, totaling roughly $327,067. This comes within days of the website's impending departure from the country. The live-streaming giant is set to exit Korea and suspend its functions in the nation on February 27, as per announcements made last year.
According to Yonhap, the fine is a result of the Amazon-owned streaming platform suspending its VOD (video-on-demand) service in 2023 and the government agency refusing to entertain Twitch's claim that VODs and live streaming are different services. The fine has left a sour taste in the mouths of many in the community. One Redditor said:
"Damn, seems like retaliation for leaving."
The Korean government has also asked the purple platform to disclose information that can justify the other measures it took in the name of reducing operation costs, such as lowering the viewing quality from 1080p to 720p. Sources report an additional 15 million won ($11.2K) fine was slapped onto the website for not curbing the distribution of illegal footage.
Twitch finances and the Korean situation explained given the recently imposed fines
As per the various blog posts and announcements from the CEO and other high-ranking officials in the company, Twitch was struggling to keep running its services in Korea. In the blog post from Dan Clancy announcing their exit from the country, the CEO blamed the high network costs. He claimed they were ten times higher than in most other countries. A relevant part of the press release states:
"First, we tested the P2P model in terms of source quality and then adjusted the maximum quality to 720p. While these efforts have resulted in some cost savings, South Korea's network fees, which are 10 times higher than in most other countries, made it impossible to operate any further."
It seems that the $327K fine imposed on Twitch was partially due to the streaming platform's policies aimed at saving operation costs. With the website slated to shut down its operations in Korea on February 27, the news of the recently imposed fines by the country has naturally garnered a lot of reactions.
Most trolled the decisions to impose a fine on the website with only days left for it to operate, while some described it as "retaliation." Others wonder what would happen if Twitch refused to pay the fines. Here are some of the general reactions from the streamer-related subreddit r/LivestreamFail.
The information provided earlier about the company's finances should be seen in the context that its CEO recently said that the live-streaming platform, which has dominated the industry for more than a decade, was still "not profitable."
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