The Challenge of Pandora TV : The Growth Momentum and Global Expansion of Domestic Online Video Market

The purpose of this study is to analyze how Pandora TV became market leader in the domestic market and how Pandora TV has managed its global expansion. This study draws outline of online contents market, which is swiftly shifting from text·image contents to video contents, and investigates factors how Pandora TV accedes to the market leader under this marked change. Additionally, this study seeks to analyze overseas expansion, which is the foremost task of Pandora TV to thread out from limited domestic market. Online contents market is well known for low entry barrier and low switching cost. For this reason, it is surprising that Pandora TV defends its leading market status from its entire life time, and, thus, it is beneficial to flash on the growing process of Pandora TV. Specifically, behind successful launching of Pandora TV, there was inexhaustible entrepreneurship of Kim Kyung-Ik, the president of Pandora TV, which resulted in innovative services such as unlimited storage space and streaming video services for the first time in the industry. First mover advantage also played a major part in successful launch of Pandora TV. As a first mover, Pandora TV was able to obtain not only a large number of users, but also their video contents. Database formed at that time served as a foundation for Pandora TV to excel other websites in volume of contents. Lastly, Kim’s clear vision did a part, planning for global expansion from the beginning of the company and steadily using pre-roll commercials to secure revenue models. However, harsh competition, along with the fundamental limit in size of the domestic market, the attractiveness of Korean online video market is decreasing. For their continuous growth, most contents providers, including Pandora TV, are endeavoring to expand globally. Although Pandora TV had started out globally with aggressive moves, Pandora TV has a lot on its hands. Cultural differences do exist even for video contents. With most of the contents based on Korean culture and language, Pandora TV is bound to have a difficult time. Relatively high-resolution video services of Pandora TV might act as a demerit in countries with insufficient network infrastructure. Another problem is that Pandora TV lacks capital to extend its server and network capabilities in a short period. However, the fact that Pandora TV has managed its business well above anyone’s negative expectation tells us that it would be too early to decide the future of Pandora TV just judging by its problems. Video contents based on Korean culture, which had been believed to be a demerit in global market, are giving Pandora TV a chance to succeed in Asian market. The prospect that Pandora TV will fall both in domestic and world market if it does not manage to equip itself with global competitiveness still holds. This feeling of emergency is giving Pandora TV the strength to innovate continuously. In addition, illuminating the global expansion of Pandora TV can be a yardstick for Korean contents companies. As the number of players is increasing in the small-sized market, Korean online contents market is getting saturated rapidly. This is also true in the online video market, which has only 4 years of history. Thus, investigating the pioneering steps of Pandora TV in global expansion can serve as a good reference to many domestic contents companies.