Fierce competition among over-the-top (OTT) platforms in South Korea has reportedly led domestic streaming firms to band together in an attempt to challenge the market leader, Netflix.
With domestic firms increasing their user base through mergers, the dominance of the streaming market in Korea will now boil down to a competition over who can provide better and more original content, according to industry analysts and officials on Monday.
On July 14, the telecommunications operator KT stated that it had reached an agreement with CJ ENM to merge Seezn, its streaming service platform, with CJ ENM's Tving platform.
In 2020, CJ ENM split off from Tving, keeping a 57% ownership stake. Meanwhile, KT Studio Genie, KT's media content unit, owns Seezn entirely.
Seezn will be integrated with Tving as part of the agreement, and the merger would inevitably make Tving the second local streaming network, with more than 5 million active monthly users, pushing out the incumbent second-place firm, Wavve, an SK Telecom streaming platform developed in collaboration with three major TV broadcasters, KBS, MBC, and SBS.
As of June, Netflix dominates the industry, with over 11.17 million active monthly users, followed by Wavve (4.23 million), Tving (4.02 million), as well as Coupang Play (3.73 million), as per Mobile Index. Seezn ranked sixth with 1.56 million subscribers, trailing Disney Plus with 1.68 million.
Choi Min-ha, researcher, Samsung Securities, stated that the deal between CJ ENM and KT should provide synergy, as Tving's market share will be raised with a strategy that makes Tving more approachable to KT's customers using its mobile carrier service.
CJ ENM and KT previously inked a memorandum of understanding to establish business cooperation in a variety of fields, including music and broadcasting, and the merger is intended to maximize synergy in the media and content companies.
An industry official stated that, in times like these, when the streaming market is experiencing intense competition, many users are subscribing to numerous OTT platforms, as such it is even more essential for operators to continuously provide quality and appealing content to users.