South Korean regulators have approved the merger of the video services of three local broadcasters and SK Telecom’s streaming app Oksusu. The new service, operating under the name Wavve will launch in September and be Korea’s largest.
Proposed in January as a measure to combat the incursion of international video players, the deal was given the greenlight on Tuesday by Korea’s Fair Trade Commission.
It involves the combination of Oksusu, which counts 10 million subscribers, with Pooq, an existing service with 4 million subscribers, operated by two state-owned terrestrial broadcasters, KBS and MBC, and commercial broadcaster SBS. SK will own 30% of the equity of the new company, and the three broadcasters 23.3% each.
Pooling the existing subscribers of the component companies is expected to make Wavve the market leader ahead of LG’s U+ Mobile TV, with a 25% share of the nascent OTT market, and Korea Telecom’s Olleh TV, on 16%.
Imposing conditions, the FTC said that the three broadcasters would not be allowed to terminate or change existing content supply contracts with other OTT providers without good reason. Additionally, the three must negotiate with other OTT platforms in good faith, and on non-discriminatory terms.
Despite lying some way behind the local platforms in terms of subscriber numbers, Netflix, with some 1.84 million paying subscriptions according to researcher WiseApp, is seen as the strongest challenger. (Netflix does not disclose its per country subscription number, but other estimates have said that Netflix has 2.4 million paying subscribers in Korea.) The company has invested heavily in original Korean content, partnered with faster-moving content creators for local shows, and is regarded as the strongest provider of foreign series. Disney Plus, expected to launch later in the fall with a $6.99 monthly price point, is also anticipated as another a strong competitor.
When Wavve was first announced in January, its backers said that it would be endowed with an original content budget of $8.9 million (KRW10 billion) in addition to the productions supplied by the broadcasters. SK said that it would forge relationships with operators elsewhere in Asia, and provide immersive media services based on SK’s VR and AR technologies.