Twitch can no longer afford to stay in South Korea | Hacker News Reader

Twitch can no longer afford to stay in South Korea

qz.com

60 pointslaurex39 comments

I don't agree with SK "Internet tax" concept but isn't it sweet that an Amazon-owned company suffers this end? Yeah, I'm looking at you, AWS egress prices and NAT-gw.

For the uninformed: AWS has pricing on NAT gateways that can only really be described as predatory. I personally saw a massive bill this year for sending data to and from a bucket in the same data center. In other words. I have a service. It’s in us-west-2. I have it sending a bunch of data back and forth between it and a S3 bucket, in the exact same data center. Unless you have some arbitrary checkbox checked in AWS, which absolutely should be checked by default and AWS has no literal reason to have it unchecked bedsides scammy, predatory practices, AWS will send you a massive bill to send bits entirely within their datacenter.

I was speaking with an AWA engineer recently.

Apparently most of the AWS services are things that Amazon teams needed and built, which is why the UX and options for them are all over the place.

I’d attribute that checkbox to that rather than AWS evil.

They also just have 0 incentive it make it better. Third parties like vercel do it for them at a premium.

I would normally agree but this has been a known issue for years[0]. It would be trivial for them to change that setting.

0: https://www.lastweekinaws.com/blog/the-aws-managed-nat-gatew...

It might be “trivial” but in my experience most engineers at these companies are too busy trying to look good in order to either survive the next cut (particularly egregious at Amazon) or get promoted, and fixing this does neither.

As Charlie Munger said: show me the incentive, and I’ll show you the outcome.

Makes sense to me. Highways have toll roads and freight trucks pay more than cars.

The same concept can apply here. Twitch, Netflix and others make up the lion's share of bandwidth use, dwarfing everything else. They should be paying something to improve capacity and contribute to maintaining the infrastructure.

The toll is already paid by the ISP customers and their monthly fees. Now, I would never defend FAANG or similar, but as I see this is just that ISPs would like really much to get money from both sides at the same time. If they were really into this, they could offer very cheap plans at 3/5$ per month with capped data. The difference? If you are in SK or similar would be on Netflix side, in other countries you would pay a premium for an uncapped connection.

Road tolls are a usage-based tax on top of what is already covered by the taxpayer. You don't pay it if you don't use it.

Factories that use a lot of electricity will contract directly with a energy seller instead of paying utility rates, because of the variability of peak period charges. This is apparently what Netflix did (pre-pay for bandwidth), as they dropped their case against SK Telecom.

It's not economically viable to charge Twitch, which transmits thousands of petabytes per month the same amount as a business that sends emails or handles online shopping.

See discussion from here: https://news.ycombinator.com/item?id=38539167

Basically all about having a homegrown solutions for South Korea, so the money flows there rather than an international corporation.

What will be interesting is if that homegrown solution is also used overseas, as then other countries will have to consider whether to retaliate with a similar "tax".

You can have a homegrown solution but it won't have the content.

Most apps widely used in Korea are homegrown. They have enough content to dominate the market.

Why do you think so? It sounds like this pricing structure applies to any company, local or foreign. Or an I mistaken here?

One of Korea's homegrown Twitch alternatives, AfreecaTV, uses AWS Cloudfront to serve video to users.

Amazon wins either way.

That can't be cheap. How are they making that work, from a financial perspective, when Twitch couldn't?

What I have heard was Afreeca makes use of distributed computing so that resources are shared directly between users rather than everything getting downloaded from their servers. This apparently cuts down on the amount of traffic load.

Because Amazon has no reason to risk Twitch profitablity. Twitch is not a profit maker it's a profit guarantee. Twitch doesn't need to compete with Kick or Afreekas. Amazon makes money.

You misunderstood the question

Amazon makes money whether it's their own Twitch or AfreecaTV using their servers.

AWS isn't closing down their Seoul data center, it's just letting AfreecaTV take the risk of streaming while still getting profits from said streaming.

You still don't get it

And you're not helping them by vaguely saying their points have missed the mark.

They were comfortable risking user security by making everyone’s IPs visible to the other viewers (for P2P streaming); Twitch wasn’t.

Korean "homegrown" apps are usually more successful domestically. They don't need help from the government when US-based apps are years late to the game, not well localized, and not competitive feature-wise. The Youtubes and Instagrams that manage to penetrate the market are exceptions rather than the rule.

Korean "homegrown" apps have incredible government support and/or come from one of 3 or 4 BigCo's

You're plainly uninformed. The Korean equivalent of FAANG (네카라쿠배당토) are all completely different corporate entities, and the biggest apps outside of that are mostly startups. Also, what government support? Like specifically? Why on earth would you feel confident enough to make such claims when you clearly have no idea what you're talking about?

This is every telco evil empire's ultimate dream. Charge all customers twice! Let the second charge be pure profit which you can direct to the critically important expenditure of executive bonuses!

The second charge being “pure profit” is just, not how accounting works.

It isn't accounting, it is economics.

I hope this tax will help SK's internet services and audience thrive :(

I wonder if this will have an effect like the 1983 motorcycle import tariff, either expediting adoption of more efficient codecs than avc1 or causing other markets to innovate around media formats or content preferences.

When I found out Twitch streams are still (limited to?) 8000kbps nvenc/h.264 I was pretty surprised given how old and predominant HEVC and VP9 hardware support is.

Why didn't they just lower the allowed bitrates in Korea? That seems like a more reasonable option than just totally exiting.

They already did that. 720. No one really wants to watch lower than that.

Why is it so much more expensive in South Korea?

Because the sender pays for traffic

so the ISPs are sucking the life out of the market?

In some sense yes, but more precisely they have successfully lobbied the politicians to pass laws in their favor.

So, yes.

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