Streaming video may already have won the contest for eyeballs in South Korea, one of the world’s most advanced economies and now one of the most competitive OTT markets.
Now, local contender Tving reckons it has many of the tools it needs to unseat Netflix from its hard-earned position as Korea’s top dog streamer.
Streaming industry numbers in Korea have risen in roughly inverse proportion to the decline of theatrical film industry. South Korea was the world’s fourth biggest box office market until 2019, but it is now chugging along with a dearth of local titles and aggregate revenues averaging a miserable $5 million per weekend so far in 2022.
Consultancy, Media Partners Asia has estimated in contrast that Netflix may have ended 2021 with some six million paying subscribers (in a population of 51 million). Tving, which is backed by CJ ENM, but no longer controlled by it, recently announced that it grew its subscriber total by 60% in 2021. It declined to reveal actual numbers (outside sources estimate a figure exceeding 2 million, but recently said that monthly active users had reached 4.17 million by December 2021, a 166% increase over a year earlier).
That growth comes despite the entry into the Korean market of Disney Plus and Apple TV Plus in 2021. Competition will increase further in 2022 with the launch of HBO Max and the recently announced Babayo, a short form platform hatched by talent agency IHQ.
According to Tving CEO, Yang Ji-eul (aka Jay Yang), Tving is now the player to beat.
Not satisfied with announcing hugely ambitious targets for the next couple of years – he calls for 8 million subscribers by the end of 2023 – the outfit is now launching into Taiwan and Japan. He sees these as the beginning of a global rollout that capitalizes on the global popularity of Korean culture.
Yang says that international interest in Korea TV fare is becoming more sophisticated and likens the process to the popularization of sushi. “In the 1960s and 70s, no one understood why people ate raw fish until the fusion California roll was introduced and became popular. Then, some of the early adopters realized that’s not how the Japanese consume sushi and sought out the authentic experience. Now the sushi that’s popular in Japan is the same as in the U.S.,” he told Variety.
But Yang is aware that he is in a race for more than bragging rights over content authenticity – there is competition for capital and market position. “It’s a game of capital. Players are entering a market to play for the crown jewel, but in the next three to five years, the industry will become consolidated. Only some will win customers’ loyalty and be sustainable,” he said.
Tving, which was started nearly a decade ago, has mounted offensives on multiple fronts in order to gain ground as quickly as possible. Most tellingly, it separated itself from CJ ENM in October 2020 and accepted local tech giant Naver as a 15% shareholder in June 2021, in return for a KRW40 billion ($352 million) capital injection.
Internet search leader, Naver brings with it ownership of online story tech firm Wattpad, comics firm Webtoon and a stake in Hybe’s Weverse, as well as production operations of its own.
In recent weeks, Tving has announced a further capital injection of KRW250 billion ($209 million) from financial investor JC Growth Investment.
That kind of backing may be necessary if Tving is to keep up the massive KRW5 trillion ($4.4 billion) five-year content investment plan that Yang has previously promised, while sustaining losses and competing with newcomers and established players alike.
Other moves may also help. The firm has a longstanding relationship with stakeholder JTBC, a leading pay TV network. It can also lean on the activities of CJ ENM-controlled Studio Dragon, which produces some 30 shows per year, many of them flowing to Netflix under a deal that expires this year. Parent company, CJ ENM in recent weeks completed its own acquisition of the scripted entertainment division of U.S. production powerhouse Endeavor Content (“Killing Eve,” “The Night Manager”).
Tving appears to be leaning on its local roots with its latest roster of Korean content. Originals released last month include “Dr. Park’s Clinic,” a medical drama comedy; “Seoul Check-in,” a reality show focused on singer Lee Hyori; and “Alive,” a music variety show restoring old Korean songs with A.I. tech.
A further 13 originals are on the cards, ranging from variety shows, to sci-fi, thrillers, fantasy and romantic comedies. These include the anticipated series “Monstrous,” a supernatural thriller written by Yeon Sang Ho (“Hellbound,” “Train to Busan”); “Yonder: Beyond the Memory,” a sci-fi drama directed by Lee Joon Ik (“The King and the Clown”); and “The King of Pigs,” a school bullying thriller, adapted from Yeon’s animated film of the same title.
The lineup also includes second seasons of romantic comedy “Yumi’s Cells,” friendship-focused drama “Work Later, Drink Now” and dating reality show, “Transit Love.”
To gain traction Tving is also willing to dilute its otherwise largely Korean focus. In December, CJ ENM announced a global content deal with ViacomCBS (recently renamed Paramount) encompassing co-productions for original TV shows and films as well as content licensing and distribution across the companies’ streaming services.
Also under the pact, the companies will launch Paramount Plus in South Korea this year as an exclusive bundle inside Tving.
“Paramount was the first [partnership] we announced. Locally, we’re also providing Tving originals to Naver customers. If there’s a good way to achieve synergies and create partnerships, we’re open to working with anyone,” says Yang.
“We want to take [global expansion] step-by-step. We’ll start with Taiwan and Japan, with a large enough market size using a formula we know can work. As for the U.S. and Europe, we’ll wait a bit,” says Yang. “Our partnership with Paramount Plus gives access to a network that Tving doesn’t have. We’ll get feedback and learn about the markets’ demands and marketing there.”