Ultimately, the cost to operate Twitch in Korea is prohibitively expensive and we have spent significant effort working to reduce these costs so that we could find a way for the Twitch business to remain in Korea. First, we experimented with a peer-to-peer model for source quality. Then, we adjusted source quality to a maximum of 720p. While we have lowered costs from these efforts, our network fees in Korea are still 10 times more expensive than in most other countries. Twitch has been operating in Korea at a significant loss, and unfortunately there is no pathway forward for our business to run more sustainably in that country.
Korean implements a "Sending Party Network Pays" tax.
I've never worked at Twitch, but I have experimented with P2P video delivery, and the TL;DR from my experiments is that real-time video delivery can not easily provide a consistent, low latency experience, and video experience problems amplify quite quickly. I wrote up a fair bit about this in the comments of a different HN post a while ago: https://news.ycombinator.com/context?id=33070218
Wouldn't the work around then be for Twitch to do a 49-51 split with a South Korean ISP to get favortism?
These entrenchment laws are there to favor the big ISPs in SK, it would stand to reason that they would be happy to make money in such an arrangement, and Twitch gets a secondary downstream benefits that they can reap.
I'm not so sure. Amazon doesn't have a history of doing this sort of thing, I don't know that its in their DNA.
I'm willing to bet there was no real diligence to an idea like this as a result. I was of course postulating myself (and don't know the inner details of Twitch either) however, upon thinking about it further, it seems unlikely it was ever seriously entertained, if at all.
This was discussed here [0]. The tl;dr is that South Korea has the opposite of net neutrality: instead of charging the consumer for excess bandwidth, they charge the service providers. Streaming video is extremely bandwidth-intensive, so Twitch can't afford to keep streaming if they're charged for every GB.
They just didn't care the South Korean market enough. Many blame South Korea's sending party network fee, but the biggest competitor to Twitch in South Korea, namely AfreecaTV, has been fine operating in South Korea under the same network fee terms. Twitch just didn't want and/or lacked the ability to adapt to the South Korean market.
Nick Plott (a longtime American commentator for StarCraft Brood War who lives and works in Korea) has a video that goes into this: https://youtu.be/o9n2PRbwGMY