Local players could announce Netflix-challenging deal in December

Courtesy of Adobe Stock/Kaspars Grinvalds

South Korea’s two largest streaming services, Tving and Wavve, are in advanced merger talks, according to Korean financial news media.

The move appears intended to strengthen the home-grown platforms, which currently trail streaming market leader Netflix.

The Korean Economic Daily reported Wednesday that CJ ENM, the largest shareholder in TVing, and SK Square, the biggest backer of Wavve, could strike an agreement as early as next week. The paper reports that CJ ENM would emerge as the majority owner of a merged streaming service.

Both companies confirmed that they are in negotiations, but they said that an agreement has not yet been reached and that all options remain open.

“Tving and Wavve are currently discussing different cooperative measures that would help strengthen their competitiveness as OTT (streaming service) operators, including strategic alliances,” a CJ ENM spokesman told Variety by email. 

The Korean streaming market is one of the most competitive in the world, boasting significantly-embedded international players, a handful of aggressive local competitors, a wealthy population of some 50 million, world class fixed-line and mobile internet connections as well as chip-makers and phone giant Samsung.

Korea’s TV production industry is highly-developed, has top-notch production and creative standards and has enjoyed success on the global stage. 

Local sources report that Tving has some 5.1 million monthly active users (MAUs) in Korea and that Wavve ranks fourth in the market with 4.23 million MAUs. Paid subscription numbers are lower.

The two platforms are already the result of earlier mergers. Tving last year merged with Seezn, a streamer owned by KT (formerly Korea Telecom). It also has substantial backing from Naver, a Korean tech and social media leader, though CJ ENM currently owns a 48.9% stake. And it aggregates Paramount+.

Wavve was born in 2019 as a joint venture between the country’s three main public broadcasters KBS, MBC and SBS and private sector giant SK Telecom, which folded its Oksusu operation into the business. SK is reported to own 40%. Last year, Wavve also announced plans to buy out KOCOWA, a specialty streamer of Korean content that operates across the Americas.

Disney+, Apple TV+ and Prime Video are all operational in Korea, but Warner Bros. Discovery has not yet rolled out HBO Max in the territory.

Korean media have already speculated that a merged Tving-Wavve company could overtake Netflix in Korea. Simple arithmetic suggests that, even if there were no duplication of subscribers or users, the merged Tving and Wavve would still come up short of Netflix’s reported 11.3 million MAUs.

However, a platform merger would also have longer-term repercussions on production. CJ ENM, with its Studio Dragon and CJ ENM Studios production factories, and Wavve, already drawing on the production facilities of the public broadcasters, could eventually put control of a large portion of Korea’s content under a single roof.

By Patrick Frater 

Link: https://variety.com/2023/biz/news/korea-streaming-tving-wavve-merger-talks-netflix-1235812409/