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Business

Naver, Kakao consider charging for some content next year

Two major South Korean internet companies say 'pay motivation' more efficient than pay wall

Display of KakaoTalk (Photo by Ken Kobayashi)

SEOUL -- South Korea's two largest internet companies, Naver and Kakao, said that they will consider charging for access to their information services from next year, motivating users to pay for creative content rather than setting up a pay wall for all of their articles.

Naver Executive Director Yoo Bong-seak said that the company planned to apply a sponsor-based paid platform to its news services from next year, which it has already adopted for its illustrations and story content.

"We realized that users are strongly resistant to the pay wall system, but they have little resistance in donating to content creators," said Yoo during a conference hosted by JoongAng Ilbo, one of the top three local daily newspapers. "We let users pay for illustrations they like in the Grafolio platform, and people are willing to pay more for this than we expected," he said, referring to the platform in which illustrators can share and sell their work.

Yoo said that such a system was more efficient than a pay wall that requires users to pay a flat amount to access all content, with about 97% of users refusing to do so.

Lim Seon-young, a Kakao vice president, agreed with Yoo, saying there were many options between an advertisement-based free content service and a 100% pay wall system for news content.

"I recommend news companies not to set up a pay wall but to motivate users to pay for their content because proliferation and going viral is important for news content," said Lim.

She introduced Kakao's story funding service in which 3,000 participants create paid-for content. With the platform, users donate about 500 million won ($459,000) a month and the company pays 90% of this to the creators. "Ultimately, it is important for users to experience content and increase them further. It is the key to motivate them to pay."

Few South Korean media companies currently charge for their online services. Chosun Ilbo, the nation's largest daily by circulation, introduced its premium online news service in 2013, but withdrew its plan to make it chargeable due to lack of interest.

Naver was recently in the hot seat over censorship of news. In October, the internet company rearranged an article by OhmyNews that criticized the country's professional football association on the organization's request. When the matter was revealed by local media, Naver CEO Han Seong-sook apologized to the public and vowed not to repeat the practice.

"Eventually, all of human engagement in arranging our news content will disappear," said Yoo at the conference, apparently referring to the case. "We will expand our channel services to let media companies choose and recommend their own news content."

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