Korea’s premium Video on Demand (VOD) industry has continued to experience significant growth, with the number of subscriptions reaching an impressive 19 million in the third quarter of 2023, according to a report by Media Partners Asia (MPA). This represents an increase of over 700,000 subscriptions compared to the previous quarter. The rising popularity of streaming platforms in Korea is undoubtedly a testament to the increasing demand for convenient and on-demand entertainment options.
Despite the overall growth of the industry, it is clear that one player has emerged as the dominant force in the Korean market – Netflix. The MPA report reveals that Netflix holds a commanding 34% market share, capturing 29% of new subscribers and reaching a total of 6.5 million subscribers. This puts Netflix far ahead of its competitors, solidifying its position as the market leader.
The overwhelming dominance of Netflix has prompted two of the biggest local streaming platforms, Tving and Wavve, to join forces through a memorandum of understanding (MoU) for a merger. The MoU was signed by CJ ENM, which owns a 48.85% stake in Tving, and SK Square, which owns 40.5% of Wavve. This strategic move aims to create a formidable competitor to challenge Netflix’s hegemony in the Korean streaming market.
Throughout the third quarter of 2023, Netflix maintained its lead not only in terms of subscriber count but also in viewership, accounting for 35% of the total viewership. Tving followed closely with a 26% share, while Wavve trailed behind with 20%. The intense competition among these platforms has sparked an impressive growth in premium VOD viewership in Korea.
One of the key drivers of subscriber growth and viewership for these streaming platforms is the compelling content they offer. The report suggests that Tving and Netflix have excelled in securing exclusive local titles, creating a strong appeal for Korean audiences. Additionally, Disney+ made significant strides during the quarter, thanks to the success of their hit superhero action drama Moving, which propelled them to 2 million subscribers and an 11% market share.
While the merger between Tving and Wavve holds great promise in establishing the largest streaming service in Korea, challenges lie ahead. Local press reports indicate that Tving incurred an operating loss of $90.7 million (KRW119.2 billion) in 2022, while Wavve registered losses of $92.5 million (KRW121.6 billion). It is essential for the merged entity to find innovative strategies to achieve profitability while offering premium content and attracting subscribers in an increasingly competitive landscape.
Korea’s premium VOD industry continues to thrive, fueled by the growing demand for diverse and high-quality streaming content. The dominance of Netflix has spurred Tving and Wavve to unite, further intensifying the competition in the market. While challenges persist, the continuous growth in subscribers and viewership underlines the potential for a bright future for the Korean premium VOD industry. As the industry evolves, it will be intriguing to witness how the merged entity and other streaming platforms innovate and captivate audiences with compelling and exclusive content offerings.