On November 29th, top Korean streaming platforms, CJ ENM’s Tving and SK Square’s Wavve announced a surprise merger. With this merger, the two companies are preparing to become Korea’s number one streaming platform, boasting close to 10 million monthly active users (MAU).

This move comes amidst a fierce battle against global players Netflix and Disney+ by Korean platforms.

Tving,  one of the major Korean streaming services platforms, currently holds the 3rd with 5.1 million MAU, trailing behind Netflix and Coupang Play, while Wavve stands fourth with 4.23 MAU (as of last month). This merger is expected to bring the total MAU to around 9.33 million, solidifying its position as a domestic streaming giant.

Tving and Wavve confirmed on the 5th that "through discussions to strengthen the OTT competitiveness, shareholders have signed an MOU.” However, the merger is not finalized until the the regulator of South Korean government approves the deal.

Both platforms have been shaped by earlier mergers. Tving merged with another Korean streaming platform, Seezn, in July last year and is notably backed by Naver, with CJ ENM also holding a 48.9% stake. Wavve, established in 2019, is a joint venture between major Korean broadcasters KBS, MBC, SBS, and SK Telecom, which owns a 40% stake. Wavve has also announced plans to acquire KOCOWA, a significant Korean streaming platform operating in America.

The Korean streaming market has become intensely competitive, with international players, aggressive local competitors, and a prosperous population. Tech giants like Samsung and LG also facilitate easy streaming access. Korea’s highly developed TV and content industry, propelled by the global popularity of K-pop and K-drama, further enriches the landscape.

However, Netflix dominates the majority of streaming originals.

The merger primarily emerges as a survival tactic due to the lack of capital among Korean streaming platforms.

The creation of a mega-domestic platform is expected to assert more dominance in the industry. The newly merged Tving-Wavve is anticipated to compete vigorously against global streamers in Korea, including Netflix, Disney+, Apple TV, Amazon Prime, and the growing Coupang Play. There are also speculations that the merger could surpass Netflix in Korea.

Reactions to the merger within academic and business circles have been positive, as it would enable higher-budget originals productions and quality content creation, allowing better competition with global players.

In correspondence with Variety, a CJ ENM representative stated, "“Tving and Wavve are currently discussing different cooperative measures that would help strengthen their competitiveness as OTT (streaming) operators, including strategic alliances.”

Post-merger, the new Tving-Wavve would secure a stronger foothold in the streaming market. However, consolidating the majority of content production under a single entity could pose challenges for other domestic streaming companies.

With Tving already owning CJ ENM’s Studio Dragon and production studios and Wavve utilizing public broadcasting production facilities, a significant portion of content would now be monopolized. The combined market share would reach around 32%, potentially raising regulatory concerns.

If the merger falls short of becoming Netflix’s direct competitor, despite combining two of Korea’s largest platforms, it might instead compete with Coupang Play (5.7 MAU).

Ki-hyeon Sung, an adjunct professor at Yonsei University, emphasizes that strategies focusing on releasing exclusive and original content not shared with Netflix or other major players are crucial to this merger’s success. "Without new attempts, no matter how much we merge, it might become a meaningless consolidation."