> Twitch Interactive, the operator of the service, reduced video quality in Korea from 1080p to 720p in September 2022 and terminated its VOD service five months later.
> The Korea Telecommunications Commission (KCC) determined the suspension of the VOD service violated the local telecommunications business law by undermining the interests of users.
> The commission has requested relevant data to examine whether Twitch had a justifiable reason for limiting the maximum viewing quality, but Twitch turned down the request, citing contractual confidentiality obligations.
I wonder what the relevant law says. Forcing a non-essential website to host and stream video content feels strange to say the least, especially given that streaming software like OBS can easily record the video locally to be uploaded to YouTube, AfreecaTV or whatever.
If it's deemed essential then the ISPs shouldn't be able to extort and extract profits from both sides of the pipe.
Also wonder why Twitch didn't provide the numbers given that they have already publicly said that the costs are high.
> Also wonder why Twitch didn't provide the numbers given that they have already publicly said that the costs are high.
All web service operators including Twitch have signed an NDA about their cost of data transfer. But there are some estimations. 50-90 billions in KRW per year (from a financial report by Daishin Securities)
Non essential doesn’t play into it. If you’re in a regulated industry and there’s conditions - be it airwave spectrum, minimal service criteria or something else, you have to operate within those conditions.
There’s a lot of countries and they all have different rules. Twitch likely isn’t regulated as a video game streaming service in most of them because there’s no reason for countries to create specialized rubles around video game streaming vs use some other more generic rules.
Companies really should consult lawyers when expanding to a new country.
Often the rules that require things of a company have penalties for non-compliance.
Those penalties don't always have exemptions for stopping service. In fact it might have the opposite to avoid trying to put political pressure by doing that.
Doesn't mean it is a regulated industry which is actually a very narrow term.
Remember you are generally required to follow regulations to collect sales tax which covers almost every company. That doesn't mean you are a regulated industry.
What is a regulated industry? I'm not aware of it as a legal term. Basically all industries are regulated in my understanding to a greater or lesser degree. Even in a lesser one, you can run up against those regs
Medicine is a regulated industry. You can’t work as a doctor without an MD and good standing with the local licensing agency.
Banking is a regulated industry. You can’t start a bank without first asking permission. Your employees are held to higher standards than other industries, and with criminal repercussions for intentional or negligent violations.
Per that definition, there are no unregulated industries. This seems contrary the the argument that regulated industry is a "very narrow" term, and the regulations on twitch in SK obviously don't count
You should go reread the conversation as your response indicates that you misunderstand the person you are replying to, suggesting that you didn't follow the thread very closely.
Summarizing the salient bits here:
>>>> Those penalties don't always have exemptions for stopping service. In fact it might have the opposite to avoid trying to put political pressure by doing that.
>>>> Doesn't mean it is a regulated industry which is actually a very narrow term.
>>> What is a regulated industry? I'm not aware of it as a legal term. Basically all industries are regulated in my understanding to a greater or lesser degree. Even in a lesser one, you can run up against those regs
>> [insert blurb about concrete instances of "regulated industries", where an intensional definition was clearly desired instead (not an incomplete, extensional definition)]
> Not a very operational definition. You can't start a hot dog stand without permission either.
So, from the top: some industries are regulated. But, oh, not all industries which are subject to regulation are what we would call "regulated industries" -- that's "a very narrow term."
Great! What exactly is the definition of that very narrow term?
The immediate response to that inquiry was several supposed examples of "regulated industries".
But that's not a satisfactory response, because it doesn't generalize. For instance, a hot dog stand is subject to regulation ("you can't start a hot dog stand without permission either") -- but is it a so called "regulated industry" (which, remember, "is actually a very narrow term")?
And then we have your response:
> That’s because restaurants are, believe it or not, also a regulated industry.
The sarcasm is cheeky, but it still doesn't provide a meaningful answer to the original question: if not all industries which are regulated are "regulated industries", then what exactly does "regulated industry" mean?
So, a couple questions for you:
1) How do you know that restaurants fit the original commentator's definition of "regulated industry"? Were you told that restaurants are among the set of "regulated industries", which you've accepted without understanding why?
2) If you actually do know what makes restaurants a "regulated industry" (not merely just regulated), why not share the definition?
3) Alternatively, could it be that neither of the first two question apply: you made your comment without first comprehending the conversation?
> a type of business that is controlled by government rules
And here's the comment that kicked off this sub-thread:
> Often the rules that require things of a company have penalties for non-compliance.
> [...]
> Doesn't mean it is a regulated industry which is actually a very narrow term.
So a regulated industry is a type of business that is controlled by government rules, but (per the aforementioned comment) not all businesses which are controlled by government rules are regulated industries.
So, again, I think the response of
> That’s because restaurants are, believe it or not, also a regulated industry.
is a bizarre blend of unhelpful and rude.
Perhaps you and I will just have to agree to disagree on that point.
“Regulated industry” is something very specific and different from general commerce regulation.
Banks are regulated industry. If you want to start a bank you have to submit your business plan to regulators for approval, and then operate within very strict rules with criminal penalties for intentional deviation, and government inspectors who come by to make sure everything is by the book.
Twitch, a video game streaming service, being regulated in the way investment banks and nuclear power stations are regulated is a weird claim to make.
> “Regulated industry” is something very specific ... different from general commerce regulation
Telecommunications is generally a regulated industry in most countries, as is broadcast media
> Twitch ... being regulated in the way investment banks and nuclear power stations are regulated is a weird claim to make
You are literally responding to an article that explicitly says Twitch was fined by the regulatory body in charge of telecommunications, not a "general commerce [regulator]"
Afaict this is "you're in a regulated industry [whether or not it should be is irrelevant] but you're also not allowed to cease operation or leave that regulated industry, or you'll be subject to fines".
Honestly it's one of the better systems for dealing with the "we aren't going to comply with the law, we'll just leave" (for some definition of leave) problem. If you try to pull this trick without pulling all of your business out of SK (i.e. Amazon) they can still collect the fine.
Probably cuts down on the performative exits >.> Facebook in the EU, in an attempt to bully regulators.
Sender pays clearly has backfired but I don't know if there's a solution that satisfies everyone outside of gov't footing the bill a la public roads and calling it an economic multiplier. Because yes internet is a series of tubes and all but video sites are sending couches to everyone, making it FedEx's problem, and then acting shocked when FedEx wants paid for large item delivery.
Oh, I didn't realise the internet service in Korea is a public utility, so people don't need to subscribe to an ISP which installs/maintains the infrastructure.
If they did would it change the argument? You pay $50/mo bucks to send and receive packages and if you sent everyone in america a couch they would either stop doing business with you or charge you more.
Hackers for some reason really hate the "we charge a flat rate to everyone averaged across normal usage so almost everyone doesn't have to think about metering but then charge outliers more" pricing model. It works the same for roads, once you're driving semis the price goes up. XPO doesn't go "well we shouldn't have to pay for our road damage because the stuff we deliver is requested by our customer."
Ok, I'm just trying to understand this: Korea passed a law that increased operating costs for twitch (and similar entities, twitch is just the relevant case here). Twitch responded by reducing those costs by reducing the resolution, which seems reasonable. Then they were told they couldn't do that, so they've decided to simply cease operating in Korea as it would be even more expensive (presumably to the extent that they believed there was no possible path to ever being profitable).
And now they're being told that they will be fined for not operating in Korea at all?
Is that correct?
The logical equivalence would be a government passing a law that said "Farmers must pay trucking companies more than the maximum profit on an apple, for every apple they ship, even though the trucking companies are already being paid by the recipient of the apples. Not only are you not allowed to ship fewer apples, you also can't decide to stop being an apple farmer." (I'm not sure if the Korean law also prevents twitch/apple farmers from increasing prices to cover the cost of those fees, but that would track the rest of the nonsense)
The article mentions also the obligation to refunds, so presumably users already subscribed to a service with a given quality, then reducing the quality.
This is not different from Prime adding ads to paying customers who signed up to the service with the implied promise there were none.
That was what I meant by "not allowed to sell/ship less".
I guess this is a novel new way around trade agreements - just add costs that only meaningfully apply to external products (e.g. "a carbon tax for all products that travel more than 6000 miles from site of manufacture or farming to the location of sale or final customer delivery" - sure that doesn't say it's an import duty, but it sure as hell means nothing from the US is subject to the tax in the US, but anything from china would be covered)
Korea has afaik much higher cost to deliver data for international services because they charge the sender of the data per unit, and Twitch couldn’t operate profitably despite the obvious market fit.
Surprising that they’re fining them on top of it though!
Korean ISPs can't charge the customers more, because many of the customers (both landline and mobile) have been promised "unlimited" data. There'd be a colossal shitstorm if they ever tried to take that back. So they look for easier prey: foreign video streaming platforms.
It's not just Korea that Twitch isn't profitable in; the company as a whole is not profitable.
Considering the high payouts to streamers, the lack of benefits for premium members, the long streaming hours of games which incurs server costs and makes it difficult to display ads, I don't think their business model is sustainable in the long run.
Twitch was profitable at some point in time according to interviews with the founders. There are more revenue streams since then, so I am guessing overalls it would be profitable.
> Considering the high payouts to streamers, the lack of benefits for premium members, the long streaming hours of games which incurs server costs and makes it difficult to display ads, I don't think their business model is sustainable in the long run.
I don't game and I don't use twitch, but...
> the high payouts to streamers
This worked really well on Youtube and other platforms.
> the lack of benefits for premium members
If people are still subscribing without many benefits imagine what will happen if they introduce more? That's worked well for Amazon in other areas (eg Prime)
> long streaming hours of games which incurs server costs
I mean there is some server cost but this seems very manageable. I've done a bunch of video streaming work and the server requirements aren't high if you know what you are doing. Bandwith is hard sometimes but I suspect Amazon can optimize their bandwidth deals as well as anyone.
> makes it difficult to display ads
This seems wrong. The whole broadcast TV model is built around 24/7 ads.
> I don't think their business model is sustainable in the long run.
I take the opposing view. I think Twitch has the potential to be one of the biggest sources of revenue growth at Amazon.
Care to share the clever way? I've put on a number of small-scale (high triple digit/low four digit concurrent viewers) streamed events and have always gotten pretty slammed by both cpu and transfer using nginx-rtmp published via hls.
Delivering the video isn't where I think most of the costs are. They've a few times its the free transcode service they offer to just about any one who streams on the platform is where much of their costs are.
having an adbreak right when the most important play of the game is made would really be annoying. It's not like broadcast tv where there are things like time slots and designated ad spots.
That's why Twitch gives you tons of tools to schedule ads and manually trigger them at less disruptive times. It requires the streamer to care about not disrupting their stream enough to plan ahead and preemptively run ads and not just hope they auto-run at the right time.
This very seldom happens to actual competitive events (which often have special deals that require them to run less ads), and most bigger streamers have worked out running ads between games.
When streamers don't show ads within some interval of time, twitch will automatically play ads to compensate, so I don't think that's what was meant. Twitch has full control of this interval.
The person you're responding to isn't saying that Twitch lacks the ability. They are saying that increasing the occurrence would cause people to get annoyed and leave, resulting in no ads being viewed.
I get that at some point twitch or even amazon.com can't control prices of ads because advertisers will pay only what they think those spots are worth but on the flip side, I think it is worth noting the costs of running twitch have probably massively increased since their justin.tv days.
I remember reading in the justin.tv days, they were trying to convince everyone that they're sustainable and that one ad an hour (not one ad roll with multiple ads, just one ad) would MORE than cover all of Justin tv costs. I'm sure the rates have collapsed since then AND the costs have gone up. I wouldn't mind 480p back when the best quality I could watch was from some guy's webcam at 720p but it is a different matter when I want to watch 1080p60 screen share. 480p is worthless for watching video games or coding streams. Probably obvious but just wanted to say out loud that the costs have likely gone up.
Twitch ads sucks. Microphone is muted and we have to rely on small screen above comment section. Anti pattern like this is reason why I don't watch twitch anymore.
Amazon owns Twitch and I guess it has a large presence in SK, so the govt will find a way to extract the fine, for example by enjoining Amazon's bank to transfer them the money.
There is a competitor to Twitch that's specific to Korea called AfreecaTV (in my personal opinion it's objectively a much better platform than Twitch). I'm pretty ignorant about the details of the internal political landscape in Korea, but I wonder if Afreeca's ownership might have some ties to the Korean government that would encourage the Korean government to make plays that hinder Twitch's operations there in order to increase Afreeca's market share.
My understand is that twitch pulled out of korea because the lack of net neutrality lead to them being extorted by ISPs. They were being charged massive delivery fees and decided it wasnt worth it. I dont think afreeca is owned by an ISP so maybe they had the government negotiate a better rate or maybe the ISPs just did them a solid.
Considering most Internet Giant has very little leverage in SK; Google, Bing, Facebook, Amazon etc have very little market shares. There is very little to push or lobby for better Korean International Internet connection. The whole sender pays thing, is AFAIK not a thing in any other developed country. ( And absolutely ridiculous )
I guess that is the Korean government wants all the internet company not from Korea to pulled out of Korea?
> The story of South Korea’s settlement regime starts with one such cache offered by Facebook. Through peering arrangements amongst the largest ISPs (KT, SK Broadband, and LG Uplus), it enabled content that had previously been accessed over expensive transit links to Facebook’s server in, for example, Hong Kong, to now be accessed from Facebook’s cache in KTs network
> But in 2016 the Korean government implemented a set of amendments to its 2005 interconnection policy that fundamentally altered norms of voluntary negotiated interconnection by instead imposing a “sending party pays” regime. The critical piece of this change was to impose a “mutual settlement” requirement amongst same-tier operators, in which ISPs were required to compensate each other for traffic exchanged between them. Not long after, KT found themselves with large bills from the other two Tier-1 ISPs, asking for payment for the Facebook traffic that was sent from the cache in KTs network
> Faced with these claims for payment, now mandated under the new interconnection rules, KT sought to recoup these costs by instead charging Facebook for the traffic delivered from the cache. When negotiations between KT and Facebook failed, Facebook decided to disable its cache in KTs network, which meant that Korean users were instead routed to other caches overseas
> Due to this deteriorated service quality for connections to Facebook, KT made a claim to the regulator KCC that issued a fine against Facebook of USD $328,000 for deliberately disrupting its services
> While the story of Korea’s settlement regime is tied to the presence of large international content providers, it has been the domestic content providers that have borne the brunt of the impact. The 2016 rules that imposed a sender pays regime meant that hosting content in any of Korea’s networks became excessively expensive as the ISP would pass on costs to the content provider. While Facebook could simply disable its cache and route the traffic abroad when KT requested “network usage fees”, local content providers could not
I think every private company like Google/ Meta/ Cloudflare should stop provide their service to Korea. Always support the right thing. They shouldn't be charging extremely high charge for bandwidth.
Actually, yes, the American tech companies are working hard to enrich humanity. They enrich themselves too. But they've given off tremendous consumer surplus just in comparison to the previous decade, and you'd have to argue in bad faith to suggest otherwise.
But hey you can complain about Americans tech companies. It fits right into the GP's point that attacking American tech companies is hot for governments.
> The Korea Telecommunications Commission (KCC) determined the suspension of the VOD service violated the local telecommunications business law by undermining the interests of users.
> The commission has requested relevant data to examine whether Twitch had a justifiable reason for limiting the maximum viewing quality, but Twitch turned down the request, citing contractual confidentiality obligations.
I wonder what the relevant law says. Forcing a non-essential website to host and stream video content feels strange to say the least, especially given that streaming software like OBS can easily record the video locally to be uploaded to YouTube, AfreecaTV or whatever.
If it's deemed essential then the ISPs shouldn't be able to extort and extract profits from both sides of the pipe.
Also wonder why Twitch didn't provide the numbers given that they have already publicly said that the costs are high.