Twitch CEO announces service’s closure in South Korea citing ‘prohibitively expensive’ costs
Twitch will officially shut down services in South Korea early next year due to high operating costs.
News of Twitch's closure in South Korea came after its CEO, Dan Clancy, explained the decision in a statement blog post. “We have made the difficult decision to close Twitch operations in Korea February 27, 2024, KST. We understand that this is extremely disappointing news and we would like to explain why we have made this decision and how we plan to support those affected.”
Clancy explains that the cost of continuing to do business in South Korea is “prohibitively expensive.” After significant efforts to resolve this issue, such as experimenting with a peer-to-peer source quality model and adjusting the quality to a maximum of 720p, the cost savings were still insufficient to sustain business.
“Our network costs in Korea are still ten times more expensive than in most other countries,” Clancy said. “Twitch operates at a significant loss in Korea, and unfortunately there is no way to operate our business more sustainably in that country.”
Unfortunately, this will impact all Twitch streamers in Korea who have spent a significant amount of time and effort building their individual communities. To soften the blow, Twitch plans to “help these communities find new homes — even if, unfortunately, it's not on Twitch,” Clancy explains. “We will work to help Twitch streamers in Korea transition their communities to alternative livestreaming services in Korea. We are also reaching out to several of these services to assist with the transition and will communicate with affected streamers.”
Twitch is not alone; several other online companies have reported problems operating in South Korea. In September, Netflix finally reached an agreement on network rates with South Korean internet provider SK Broadband (ABC news). This is largely due to the fact that Korean ISPs force content and application providers to pay network fees for the Internet traffic they send over ISPs' networks in the country.
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