[Asia Exclusive] Wave CEO "Not Just Domestic... Worth Trying the Global Market"

Lee Taehyun, CEO of Content Wave
Expecting 'Win-Win' Effect When 'OTT Alliance' Cross-Supplies Content
Betting on Quality Content... Challenging Giant Capital Netflix

Lee Taehyun, CEO of Content Wave, is being interviewed on the 14th at SBS Prism Tower in Mapo-gu, Seoul. Photo by Kang Jinhyung aymsdream@

[Asia Economy Reporter Joselgina] "We have reached a stage where we cannot just fight over the domestic market. To go overseas, we must go as a 'coalition.'

Lee Taehyun, CEO of Content Wave, which operates the online video service (OTT) Wavve, recently stated in an interview with Asia Economy at the Seoul Sangam-dong headquarters that he is open to discussing anything to secure competitiveness regarding the so-called 'OTT coalition' plan. Marking the first anniversary of its launch last month, Lee emphasized, "The OTT market has changed a lot in the past year," and added, "I am confident that it is worth trying in the global market."

He acknowledged that this proposal might be difficult to realize due to the recent launch of the merged entity of Tving, which spun off from CJ ENM, and JTBC, but said, "When the right time comes, we can talk about it." He added, "At a lower level, content cross-supply among coalition members will be possible," and "At a higher level, it will be service integration." Currently, OTT users cannot watch CJ ENM and JTBC content on Wavve, nor can they watch terrestrial content supplied by Wavve on Tving. Content cross-supply would create a win-win effect for both users and businesses.

Lee also showed confidence in the content war against Netflix, which has massive capital power. As a content expert, he said, "This market is one where investing 100 won might yield 10 won (a loss) or 200 won (a hit)," and questioned, "It's a 'David and Goliath' fight, but why not if the story is good?" However, he expressed discomfort about the fact that major telecom operators like KT and LG Uplus have opened their doors wide to global OTT providers, changing the market competition base and accessibility, saying, "OTT should not be viewed as a supplementary service."

Lee Taehyun, CEO of Content Wave, is being interviewed on the 14th at SBS Prism Tower in Mapo-gu, Seoul. Photo by Kang Jinhyung aymsdream@

- This year, the biggest topic in the domestic OTT industry was 'integration,' initiated by Wavve.

▲This is a serious message. If it were a comfortable thought to just divide the domestic market into three parts, it wouldn't have been done this way. But this market is not going to end domestically. We have to go overseas. To go overseas, we need to go as a coalition to be competitive.

- What specific thoughts do you have regarding leadership and the scope of integration?

▲I have only talked about the direction; it is zero-based. To be specific, we need to meet. But since (CJ ENM-JTBC's Tving) has just launched, it might be cautious to say let's do it together. I think when the market situation is right, we can talk about it. For now, I believe content cross-supply at a lower level is possible. A higher level would be service integration.

- In the early days when coalitions centered on terrestrial broadcasters were discussed, CJ ENM and others did not join. Will what failed then succeed now?

▲That's a precise point. However, the market has changed. It has changed a lot in the past year and a half. I believe decision-making can change as the market and waves change. I am confident this industry is worth trying, and I think others will feel the same. They will think it better to prepare quickly and do something. This industry can play globally. To go global, the home base must be solid. If the domestic market, currently worth 750 billion won, becomes a 1 trillion or 2 trillion won market, competitiveness will exist.

- What is the government's role?

▲I am asking for minimal regulation so the industry can grow. Also, there is the issue of how to fund the content industry. It is about creating a quantitative and qualitative growth foundation to produce good content. Netflix is said to invest over 300 billion won in content production. Domestic companies find it hard to reach that level. Now it has become a capital battle.

- It seems difficult to compete against Netflix with its massive capital power.

▲Other facility investments yield 100 won for 100 won invested. But in this market, investing 100 won might yield 10 won or 200 won. Although it is a 'David and Goliath' fight with Netflix, it is still a story. Why not if the story is good? Depending on foresight, it is possible to do well even with less capital.

- From the content creator's perspective, Netflix with capital and global networks is the priority. This is a weakness for Wavve.

▲I think the opposite. Since we cannot invest as much as Netflix, we will do our own planning. Netflix owns the IP. If a creator sells for 100 won, they only earn 100 won. We want to share. If it hits big, we hit big together. We are currently preparing something where we propose a big-picture plan and ask creators to produce. We will promote original productions within two months.

- K-dramas and K-content are not exclusive assets of Korean companies.

▲Of course. From an individual business perspective, practical judgment is needed. It is not something to criticize if domestic companies receive foreign capital. Netflix has certainly contributed to our market. Because of this, the frame of 'Wavve = native OTT' is uncomfortable. Now it is about service competition.

- Major telecom companies like KT and LG Uplus have partnered with Netflix, creating a big difference in accessibility. There were unfairness criticisms at this year's national audit.

▲Yes. Of course, contracts between businesses should be free, but telecom is a licensed national infrastructure industry. Due to partnerships with major telecoms, users' access routes to Wavve and Netflix have changed. Wavve and Watcha require installing an app, but Netflix gained access rights to domestic pay-TV subscribers through telecom IPTV. With one telecom (LG Uplus) becoming two (LG Uplus and KT), Netflix's stance will likely change. We hope to have content equal access rights, introduced at IPTV launch to create fair competition conditions for new businesses.

- What are the global expansion plans?

▲The service for overseas Koreans scheduled for the second half was postponed due to the COVID-19 pandemic. Now, the Korean market is the hottest worldwide. We must first become the overwhelming player at home base.

- Any progress on the cooperation with NBCUniversal announced earlier this year? Possibility of equity investment?

▲We are reviewing how to distribute the content we invested in. We are also requesting content investment reviews. Regarding equity investment, it is not yet at the stage to discuss. It could be one of the possible partners for overseas expansion, but nothing has been discussed.

- Younger generations are watching less TV. How long do you think it will take for the golden cross between IPTV and OTT?

▲It is hard to predict. Maybe five years. It will take about ten years for IPTV to transition to OTT. If the IPTV market is 5 trillion won, the OTT market must be over 10 trillion won for the transition. By then, the concept of home media will disappear. The VOD re-consumption market will grow, opening new worlds by device. However, passive viewing like just leaving it on, sports, and news journalism aspects of 'live broadcasting' will not lose their utility.