[Q&A] Yang Ji-eul, CEO: "We Are Going Overseas... Expecting Pre-IPO Success"

1st Anniversary of TVING's Independent Corporation Launch
'TVING Connect 2021' Event
Official Overseas Expansion to Japan, Taiwan, USA
Q&A with CEOs Yang Ji-eul and Lee Myung-han

Yang Ji-eul and Lee Myung-han, CEOs leading the native OTT service TVING, announced plans for overseas expansion to Japan, Taiwan, and the United States at the 'TVING Connect 2021' event held on the 18th to celebrate the first anniversary of the independent corporation's launch. From left: Yang Ji-eul and Lee Myung-han. Photo by TVING

[Asia Economy Reporter Cha Min-young] "When overseas online video services (OTT) enter our country, Tving will go overseas."

Yang Ji-eul and Lee Myung-han, co-CEOs leading the native OTT Tving, announced plans for overseas expansion to Japan, Taiwan, and the United States at the ‘Tving Connect 2021’ event commemorating the first anniversary of its independent corporation launch on the 18th. As a global expansion partner, they chose 'LINE,' a global messenger platform operated by Line Plus, a Naver affiliate. They explained that LINE’s capabilities as the 'national messenger' in Japan, Taiwan, Thailand, etc., will synergize with Tving’s core strength in K-content.

To compete with overseas OTT operators like Netflix and Disney Plus, they have also started raising funds. CJ ENM, Tving’s largest shareholder, recently selected Nomura Securities as the lead underwriter and is exploring pre-IPO equity investment externally. The funds raised will be used to strengthen Tving’s OTT business and invest in original content.

Below is a Q&A with Tving co-CEOs Yang Ji-eul and Lee Myung-han.

Q. There are expectations that Tving will go public (IPO). When is the planned listing date?

▲(CEO Yang Ji-eul) As already known in the market, Tving is currently conducting a pre-IPO. We expect visible results by the end of the year. The funds raised through this process will be used not only for sufficient investment domestically but also to support our global expansion efforts.

Q. What is Tving’s unique competitive edge?

▲(CEO Yang Ji-eul) From a management perspective, I think it’s fandom, content, and scale. Our success formula is to increase scale, make significant investments, and create a virtuous cycle through repetition. Looking at our competitors’ OTTs, their scale is growing globally. When they enter Korea, we will go out. We want to secure what is needed through global expansion and accelerate the virtuous cycle.

▲(CEO Lee Myung-han) From a content perspective, as seen in Netflix’s case, everyone has recognized the business momentum that strong original content provides. We also believe preparing killer anchor-level originals is key to our content business. If I were to summarize our differentiators in two keywords, it would be 'ALL THINGS FOR EVERY FANDOM.' We are an OTT operated directly by the business operator with the most accumulated ability and experience to create strong fandoms and turn them into franchise intellectual property (IP). We believe in this and intend to proceed accordingly.

Q. What are your thoughts on overseas OTTs entering Korea, like Disney?

▲(CEO Lee Myung-han) It is a tough business environment. On the other hand, since we are in the OTT business, I think not only us but also Disney and Netflix will play roles in heating up the market. I believe the essence of the OTT business is meaningless unless it is globalized. It is fortunate that we are facing these operators in our home ground for the first round. We will learn a lot through fair competition.

Q. What are the synergy results with Naver and the scope of cooperation with Samsung Electronics?

▲(CEO Yang Ji-eul) As Naver’s CEO mentioned, hundreds of thousands of customers use both Plus Membership and Tving. Our partner owns many IPs such as webtoons. We have been and will continue to plan expansion with LINE, which is related to Naver. Just as with JTBC, we are building the most ideal partnership with Naver. Regarding Samsung Electronics, it is too early to mention specific initiatives. There are many areas to explore, such as television and overseas marketing, but concrete discussions are underway, so I will share more at another opportunity.

Yang Ji-eul, Co-CEO of TVING

Q. How far has cooperation with LINE progressed for overseas expansion, and what is the ratio of overseas to K-content in content acquisition?

▲(CEO Yang Ji-eul) I mentioned that we are in detailed discussions with LINE and several global media companies, so I understand there are many questions. If you wait a little longer, we will arrange an opportunity to explain in detail. Overseas, we want to delight customers with K-content we are confident in, but customers do not necessarily consume only Korean or Chinese cuisine. We will provide a variety of content. Rather than doing everything alone, we will grow together with partner companies.

Q. Why were Japan and Taiwan selected as priority countries for expansion?

▲(CEO Yang Ji-eul) We plan to enter major markets including the United States, Japan, Southeast Asia, Europe, and Latin America. We analyze how developed and growing the OTT industry is, whether the business environment is favorable to us, whether the K-content fandom is strong enough for our company’s sustainability, and what our strengths and weaknesses are in each country. We then leverage strengths and discuss with partners if improvements are needed. Tving is already doing well in Seoul as a joint venture with JTBC and Naver. We are striving to create synergy so that 1+1+1 is not 3 but 10.

Q. There are criticisms that Tving has relatively little overseas content.

▲(CEO Lee Myung-han) It’s not that we are not making efforts, but the environment for acquiring foreign content has changed significantly compared to the past. Even film studios have their own OTTs. Content acquisition issues may change depending on how we create synergy when expanding overseas as well as domestically. We continuously source high-quality content within our reach. However, the increased proportion of K-content not only for us but also for other operators provides reassurance that we can focus more on originals rather than acquisition.

Q. What content is currently being prepared with overseas expansion in mind?

▲(CEO Lee Myung-han) Global expansion is now the default. We consider global audiences from the planning stage. The saying 'the most Korean is the most global' has become like a formula. While continuing to produce well-made K-content, we are also creating mechanisms to fit global markets. We are approaching almost all genres, including variety shows, music, and animation, with this mindset.

Lee Myung-han, Co-CEO of TVING

Q. What differentiated services will Tving offer as it grows into a global streaming platform?

▲(CEO Yang Ji-eul) Our vision is to make people say, 'You have to go to Tving to properly watch K-content.' We plan to provide high-quality services with various translations and more. Television is an area that will become increasingly important. We are working hard to offer premium services worthy of that standard.

Q. What domestic ripple effects will Tving’s overseas expansion have?

▲(CEO Yang Ji-eul) We believe there is a virtuous cycle effect that platforms have. Tving has proven the existence of this virtuous cycle through one year of business. We seem to know the success formula. Because it is a formula, if you input something, a specific output comes out. We plan to use this formula to expand globally.

Q. What is the direction and weapon of Tving’s content strategy?

▲(CEO Lee Myung-han) We prepare various content plans and, given the nature of OTT, we can analyze data. We interpret and process this data to understand what content customers prefer and plan accordingly. Our strategy is to increase the probability that fandoms become franchise IPs. When transitioning from linear TV to OTT, we proactively prepared content with a different sensibility. It may involve risks and experimental attempts, but we must not fear and proceed.

Q. How do you evaluate the performance of individual original works Tving has presented?

▲(CEO Lee Myung-han) Half of new customers subscribe to watch original works. That explains their utility. The contribution of original variety shows like 'Transit Love' far exceeded our expectations. It seems to have shown that well-made new variety shows can contribute significantly to the OTT market. Our original planning method, from spin-offs to creating additional value and diversifying distribution methods, is a unique achievement that other OTTs have not yet experienced.

Q. To provide unique content, high production investment seems necessary. What are the investment scale and plans?

▲(CEO Lee Myung-han) When planning and investing in content, there are various considerations. Some content may warrant an all-in strategy, while others may be fewer but more focused. However, the internal atmosphere is not to drastically increase production budgets immediately. We are proceeding well and efficiently according to plan. While open to possibilities, we do not plan to spend an extraordinary amount of money.

Q. With various overseas OTTs entering, there are talks of collaboration among native OTTs. What is your view?

▲(CEO Yang Ji-eul) Currently, there are no concrete plans for solidarity among domestic OTTs. Regarding overseas expansion or domestically, Tving wants to grow the business through open and inclusive partnerships. We will have various cooperative relationships step by step by area, but a physical big bang or merger among companies is difficult at present due to differing goals and business directions.