Korean OTT Giants Get Green Light to Merge, But Key Hurdle Remains

South Korea's competition watchdog has approved the merger of domestic streaming platforms Tving and Wave, potentially creating a homegrown rival to Netflix. But the deal still needs approval from all shareholders, including a reluctant major investor.

The Fair Trade Commission granted conditional approval on June 10, requiring both services to maintain their current subscription prices until the end of 2026. The decision allows CJ ENM executives from Tving to take board positions at Wave, enabling the companies to work together more closely.

The merged platform would combine Tving's 16.5% market share with Wave's 9% share, creating a significant challenger in a market where Netflix commands 61.1% of streaming time.

The biggest obstacle isn't regulatory-it's internal. KT Studio Genie, which owns 13.5% of Tving, has questioned whether the merger serves shareholders' interests. KT is reportedly concerned about taking on Wave's heavy losses, which topped 119 billion won last year despite revenue of 334 billion won.

Industry watchers suggest KT may also worry about the merged platform competing with its own IPTV business.

Netflix still dominates with 37% of viewership and 43% of revenue, but Tving has been gaining ground with local content and exclusive sports rights. Netflix's monthly active users in Korea have actually declined from about 14 million in early 2024 to 11 million recently.

Korean content accounts for 77% of premium streaming engagement, giving local platforms a natural advantage.

The approval aligns with Seoul's broader push to develop domestic tech champions. The government offers tax breaks of 3-10% on production costs for local OTT platforms and has pledged additional support for the service sector.

President Lee Jae-myung, who took office June 4 after winning a snap election, hasn't specifically addressed OTT policy but has emphasized developing Korea's tech sector.

The merger ratio has reportedly been set at 1.6 to 1, with the combined company valued at 2 trillion won. Tving would absorb Wave under the current plan.

All major shareholders must agree for the deal to proceed. While Wave's backers including the three major broadcasters support the merger, KT's position remains the key variable.

Industry analysts say the deal could eventually happen despite KT's concerns, especially with government pressure to create competitive domestic platforms. The merged entity would have the scale to invest more heavily in original content and potentially expand internationally.

For now, Korean viewers will have to wait to see if their homegrown Netflix alternative actually materializes.