[Interview] Wave Challenges Netflix: "Now It's a Content Battle... OTT Regulation Must Be Minimized"

Lee Taehyun, CEO of Content Wave
Invests 60 Billion Won in Content This Year Alone
Ongoing Behind-the-Scenes Talks with Disney Plus

[Asia Economy Reporter Joesulgina] "Strengthening regulations on online video services (OTT) will rather have a significant adverse effect by shrinking the domestic media industry. It is important to minimize regulations while establishing a fair competitive environment."

Lee Taehyun, CEO of Content Wave, who leads the leading 'native OTT' wavve, stated this in an interview held on the 13th at the headquarters in Sangam-dong, Mapo-gu, Seoul. He said, "OTT is a media sector of autonomous competition without national borders."

CEO Lee also expressed cautious concerns about the so-called 'Netflix Free Riding Prevention Act' currently under discussion in the National Assembly. He said, "Global operators' revenues are increasing significantly, but they are not bearing a fair tax burden like domestic operators. This issue should be seriously addressed not only from the perspective of fair competition but also at the national economic level," adding, "A reasonable alternative that minimizes regulations to prevent discrimination among operators is necessary."

He warned against the risk of the regulation turning into reverse discrimination that tightens only domestic operators while leaving overseas operators unattended, contrary to the original intention. The amendment to the Information and Communications Network Act, which imposes network usage fees on content providers such as Netflix, is scheduled for review by the National Assembly's Legislation and Judiciary Committee and plenary session this week.

◆ Investing 60 billion KRW this year to counter Netflix = Wavve, a joint venture between SK Telecom and the three terrestrial broadcasters, has been sailing smoothly, securing over 9 million paid and free users in less than a year since its launch in September last year. Starting this year, it will also intensify its counterattack to defend its home turf against the 'global OTT giant' Netflix. Following the announcement of a super-collaboration with the US NBCUniversal at the beginning of the year, it will invest 60 billion KRW solely in securing exclusive (original) content throughout the year. Ahead of its global expansion in two years, it plans to start services targeting overseas Koreans in seven Southeast Asian countries in the second half of the year.

CEO Lee emphasized, "We will ensure that the domestic market is not dominated by Netflix," adding, "Competition with global operators is difficult, but at least on the domestic stage, we are confident." He mentioned, "Our goal is to secure a major market share in Asia, from Tokyo, Japan to Istanbul, Turkey, while achieving meaningful shares in niche markets in English-speaking regions such as North America," and added, "As they (overseas operators) enter the domestic market, we must also become a dual player."

Supporting his confidence is K-content, especially the long-accumulated VOD portfolio of the three terrestrial broadcasters KBS, MBC, and SBS. CEO Lee, a former KBS producer, said, "The OTT market is a battle of libraries," adding, "From 'Sandglass' to 'Soonpoong Clinic,' 'Infinite Challenge,' and recently 'The Manager,' the broadcasters' content is stacked layer upon layer. The appeal of well-made content remains effective."

◆ Intensifying OTT competition... Expecting super-collaborations with Disney, etc. = However, the competitive environment surrounding wavve is not easy even at home. Netflix's rapid growth continues amid the spread of COVID-19, and the so-called 'Tving alliance,' a joint venture between CJ ENM and JTBC, will soon be launched. Within native OTTs, the structure of 'terrestrial broadcasters' backed by broadcasters versus 'cable and comprehensive programming channels' is becoming clear. Another OTT giant, Disney Plus, is also expected to enter the Korean market soon.

Regarding this, CEO Lee asserted, "Ultimately, content is the answer." His plan is to increase wavve's exclusive content that cannot be found on other platforms such as Netflix. Following last year's first original drama 'Joseon Loco - Nokdujeon,' four dramas including 'Kkondae Intern,' 'SF8,' 'Alice,' and 'Lie After Lie,' as well as idol variety shows, are lined up this year. He said, "Now it is a battle of original content. For qualitative advancement, we must explore areas that cannot be consumed on existing channels," adding, "We will invest more aggressively next year."

Cross-border super-collaborations will continue. First, through NBCUniversal, wavve plans to further concretize the distribution of its exclusive content to the global market. Regarding future cooperation possibilities with CJ ENM and JTBC, he said, "All possibilities are open," but added, "Currently, content is not supplied mutually." About Disney Plus's entry into the Korean market, he smiled and said, "Behind-the-scenes talks are ongoing," and "We are also hopeful given the market's high expectations for partnership possibilities." CEO Lee repeatedly emphasized the importance of the entire ecosystem, saying, "It is important for wavve to grow, but we must also grow the industry itself."