[Comprehensive] OTT Tving Backed by CJ and Naver Partners with 'Line' to Go Overseas... Taking on Netflix Head-to-Head

[Asia Economy Reporters Seulgina Jo and Minyoung Cha] "We will become the global number one K-content platform."

Tving, a native online video service (OTT) under CJ ENM, is partnering with the messenger platform Line to enter the global market. Leveraging K-content and Naver platform expertise, they plan to target Japan and Taiwan next year, and the U.S. market?Netflix's home turf?in 2023. Amid the worldwide Netflix original K-content phenomenon sparked by "Squid Game," this move also reflects CJ ENM's confidence in proving that "we are the best in K-content."

◆Tving Joins Hands with Line...Targeting Netflix’s Home Turf

On the 18th, Tving unveiled plans to enter the global OTT market in Japan, Taiwan, and the U.S. at the ‘Tving Connect 2021’ event celebrating its first anniversary as an independent corporation. Starting next year, they will gradually launch D2C (Direct to Customer) services in key countries to lead the global K-content wave. Kang Hoseong, CEO of CJ ENM, stated, "We have a vision of Tving as the future of channels and will fully commit to its growth to become the ‘global number one K-content platform.’"

Line was chosen as the global expansion partner. With approximately 200 million monthly active users worldwide, the messenger platform Line is loved as the ‘national messenger’ in Japan, Thailand, and Taiwan. Eunjeong Lee, CEO of Line Plus, said, "Combining Line’s global business capabilities with Tving’s content production expertise will create an OTT platform representing Asia." The global OTT market is expected to grow from $178 billion this year to $275.5 billion by 2025.

In particular, Tving is making a strong strategic move by combining not only its original content but also all K-content invested in by its major shareholders CJ ENM and JTBC Studio with Naver’s platform know-how. CJ ENM has announced a content investment plan totaling 5 trillion KRW by 2025. Han Seongsook, CEO of Naver, said, "Tving’s original content has been a leader in K-content," and added, "We will strive to enhance synergy by helping Naver’s intellectual property (IP) such as webtoons and web novels contribute to Tving’s original content production."

Tving’s original content future strategy includes ▲ full-scale development of five franchise IPs including Transfer Love Season 2 ▲ expanding content LTV value using original IPs like Naver webtoons and web novels ▲ diversifying genres and expanding scope with Tving-style animation and documentaries for unique fandoms ▲ diversifying distribution strategies that pursue coexistence and symbiosis with theaters and TV channels ▲ collaborating with film creators, using cinematic themes, and producing Tving original series with movie-level scale.

◆K-Content’s Rising Value...Concerns Amid Squid Game Fever

Tving’s aggressive overseas expansion strategy is closely related to the recent surge in popularity of K-content. From "Kingdom," which sparked the ‘K-zombie’ craze, to "Squid Game," K-content aired worldwide via Netflix has been a huge success. As of the 13th, Netflix subscriber households that watched Squid Game reached an astonishing 111 million. This is why Netflix has boldly pledged to invest $500 million (about 560 billion KRW) in Korean content production this year. K-content, which has captivated the world, has now become a key weapon in the global OTT battle.

Netflix's original content 'Ojingeo Game'

For CJ ENM, which has led the globalization of K-content, there is a sense of crisis that the title of ‘No.1 K-content leader’ could be lost to global OTTs with massive financial power and infrastructure. Disney Plus also announced plans to launch its Korean service next month and has signaled large-scale future investments in K-content.

Industry insiders emphasize the urgency of global expansion by K-platforms including Tving to prevent Korea from becoming a ‘content subcontracting base’ for overseas OTTs. Although Squid Game is estimated to have generated about 1 trillion KRW in revenue?nearly 40 times its production cost?domestic producers receive no share of this profit. Unlike domestic OTTs, Netflix owns all rights and IP. Even content funded by public money has its rights revenue monopolized by Netflix.

Kim Seungsu, a member of the National Assembly’s Culture, Sports and Tourism Committee and spokesperson for the People Power Party, pointed out, "While overseas OTTs like Netflix can help expand distribution channels, they monopolize secondary copyrights during content production, raising concerns about Korea becoming a subcontracting base for foreign OTTs." Director Lee Joon-ik, who is producing OTT content through Tving, said, "We need active measures to respond to the global market with our own OTT platform for K-content."

Meanwhile, Tving also revealed plans to expand domestic business alongside its global expansion. Starting next year, Tving services will be supported on Samsung Electronics smart TVs with dedicated buttons installed. Yang Ji-eul, co-CEO of Tving, said, "From 2022, Tving services will be supported on various smart TVs sold domestically, including Samsung and LG, to make Tving more convenient and diverse to use." Since its launch as an independent corporation in October last year, Tving’s cumulative paid subscribers have increased by 206% in just one year. The contribution of paid subscriptions through Tving original content grew by 155% from the first quarter to the third quarter, proving the effectiveness of original content.