“We have concluded that (the merger) will not limit competition in the market for the supply of content to over-the-top platforms,” the regulator said in a statement.
CJ ENM is the controlling shareholder in Tving, with tech giant Naver and broadcaster JTBC as smaller minority owners. Seezn is currently owned by local telecom giant KT Corp.
The FTC reasoned that the deal will not much change the streaming hierarchy in Korea. Netflix is the market leader with a 38% market share in the January-September period, ahead of Wavve with 14% and Tving on 13%. Coupang Play had close to 12% with Disney+ on nearly 6%. Seezn had 5%.
It also said that the merged company was unlikely to raise subscription prices, due to competitive pressure.
And it calculated that program sales to third parties are too valuable for CJ ENM’s subsidiaries to give up, making it unlikely that the merged Tving-Seezn would be able to grab all of CJ’s programming output.
Tving reported an annual operating loss of KRW208 billion won ($159 million) last year. Seezn had operating profit of KRW2.5 billion ($1.91 million) in 2021.
Merger benefits are being touted as including savings on marketing costs and an expanded pool of subscribers that include KT’s 14 million cell phone clients. TVing was last year reported to have spent KRW18 billion ($13.8 million) on marketing.