Tving, Wavve begin merger talks
Merged entity to step up as Korea’s top home-grown OTT platform
By Anna J. Park annajpark@koreatimes.co.kr
Korea’s two major streaming services Tving and Wavve have recently begun merger talks, aiming to increase their market dominance by creating the country’s largest over-the-top (OTT) platform with some 10 million monthly active users (MAU).
According to investment banking (IB) industry sources, CJ ENM and SK square, the parent companies of Tving and Wavve, are expected to sign a memorandum of understanding (MOU) for the merger by the end of this week at the earliest.
Once the MOU is signed and due diligence is completed, the two sides are anticipated to finalize a definitive agreement by the middle of next year, aiming to conclude the merger process by the end of next year.
CJ ENM is expected to be the largest shareholder of the merged streaming service, and SK square will be the second-largest shareholder. Currently, CJ ENM holds a 48.85 percent stake in Tving, while SK square owns 40.5 percent of Wavve.
Both parties acknowledged that they just began discussions about their strategic cooperation, but stressed that nothing has been confirmed at this early stage.
“Tving and Wavve are currently in talks over various collaboration options that would help enhance their competitiveness as OTT streaming services, including forming strategic alliances,” an official at CJ ENM said.
SK square also confirmed that the two parties are in talks for now, adding that nothing has yet been confirmed.
If the negotiations between the two sides proceed smoothly and the merger is successfully concluded, the consolidated streaming service would become an unrivaled top domestic OTT operator in Korea. Given that Tving currently has 5.1 million users and Wavve holding 4.23 million users in terms of MAU, the combined user base of the merged corporation could exceed some 9.3 million users.
This would place the merged entity in a dominant position over Coupang Play, which boasts 5.27 million monthly users for now, stepping up as the number one home-grown OTT streaming service provider. This top position among local players can give it more leverage in its aggressive pursuit of Netflix, a global leading OTT service that has 11.37 million users in Korea.
Industry watchers say the merger talks between the two rivals, which have been rumored in the market for three years, gained full momentum this summer amid their shared understanding that it is better to avoid cutthroat competition and unite to create a merged entity in the domestic OTT streaming service market to gain greater bargaining power.
Coupang Play’s sudden rise to the position of the top homegrown OTT platform in August also acted as a catalyst for Tving and Wavve joining hands to effectively counter threats from global OTT services, such as Netflix, Disney+, Apple TV+ and Prime Video, all operating in Korea. Since Coupang gives out free Coupang Play vouchers to members of its monthly e-commerce subscription service, the number of Coupang Play users has now exceeded those of Tving, which used to be the top local OTT service for a long time.
Meanwhile, the corporate merger will have to be assessed by the Fair Trade Commission (FTC), as the combined market share of of the two OTT services exceeds 30 percent.
Finance
en-kr
2023-12-01T08:00:00.0000000Z
2023-12-01T08:00:00.0000000Z
https://ktimes.pressreader.com/article/281586655357898
The Korea Times Co.
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