KISDI Examines Whether OTT and Food Delivery Platforms Have Contributed to Inflation (detail)

※ URL(Korean): https://www.kisdi.re.kr/bbs/view.do?bbsSn=114991&key=m2101113055776&pageIndex=1&sc=&sw=

KISDI Premium Report (26-05)
Examining the Inflationary Effects of Digital Platforms: Evidence from OTT Services and Food Delivery Apps

KISDI Examines Whether OTT and Food Delivery Platforms Have Contributed to Inflation
.................................................................................................................................

▲ Entry-level OTT subscription prices have declined following the introduction of ad-supported plans
▲ Delivery fees have also fallen, with no empirical evidence that digital platforms have driven inflation
▲ Lower subscription prices and delivery fees reflect platform strategies to expand and retain their user base
▲ Continued monitoring of both platform markets and broader substitute markets, including offline alternatives, is needed

The Korea Information Society Development Institute (KISDI, President Sangkyu Rhee) recently published its **KISDI Premium Report (26-05)**, *Examining the Inflationary Effects of Digital Platforms: Evidence from OTT Services and Food Delivery Apps*. The report provides an empirical assessment of whether digital platforms have contributed to inflation in the Korean market.

As dependence on digital platforms increased rapidly during the COVID-19 pandemic, concerns emerged that elevated post-pandemic inflation was being driven by the growing market power of digital platforms and the resulting increase in user fees. This phenomenon has been referred to as **platform-driven inflation** or the **reverse Amazon effect**.

These concerns have been particularly focused on platforms closely associated with daily life, such as food delivery apps and OTT services. However, much of the discussion has relied on anecdotal evidence rather than systematic analysis. Against this backdrop, the report empirically examines whether subscription fees charged by OTT services and delivery fees imposed by food delivery platforms have contributed to inflation.

The analysis found no empirical evidence that digital platforms have been a major driver of rising consumer prices.

In the OTT market, the introduction of ad-supported subscription plans, led by Netflix, lowered the entry-level subscription price. In addition, bundled discount packages offered through telecommunications providers and other digital platforms have enabled more consumers to subscribe below the standard retail price, reducing households' effective spending on OTT services and helping to moderate inflationary pressure.

Similarly, in the food delivery market, the report finds that rising restaurant prices have been a long-term structural trend that predates the pandemic, with no empirical evidence indicating that delivery fees have been a primary driver of food price inflation. Furthermore, intensified competition among major delivery platforms offering unlimited free delivery has contributed to a decline in consumer-paid delivery fees since 2024.

The report notes that the factors behind declining OTT subscription prices and food delivery fees differ. In the OTT market, lower prices reflect the transition from a subscription-only business model to a two-sided platform connecting advertisers and users. In contrast, lower delivery fees have been driven primarily by intensified competition among major delivery platforms following aggressive market expansion strategies adopted by new entrants.

Kyungeun Kim, Research Fellow at KISDI, noted that although the immediate causes of lower prices differ across the two markets, both ultimately represent business strategies aimed at preventing user attrition and expanding platform usage. She further emphasized that consumers evaluate digital platforms not only by comparing competing platforms but also by considering offline alternatives. Accordingly, she suggested that assessments of the inflationary effects of digital platforms should continue to monitor developments not only within narrowly defined platform markets but also across broader related markets, including offline substitutes.

The report is available for download from the KISDI website ([www.kisdi.re.kr](http://www.kisdi.re.kr)).

KISDI News

KISDI Examines Whether OTT and Food Delivery Platforms Have Contributed to Inflation