US Paramount Plus Enters Market Partnering with Local OTT

Unlike Disney Plus and Apple TV
CJ ENM Shifts Partnership to 'TVING'

[Asia Economy Reporter Lim Hye-seon] Paramount Global's online video service (OTT) Paramount+ will enter the domestic market next month, becoming the first among Asian countries. Unlike Netflix, Disney+, and Apple TV, which entered the market directly, the service will be provided through partnerships with domestic OTT platforms. Paramount+ holds intellectual property (IP) rights to popular American dramas such as CSI.

Shift from Direct Entry to Partnership

Last year, Disney+ and Apple TV landed in the domestic market. Paramount+, the first overseas OTT to enter this year, chose an indirect entry by partnering with CJ ENM's 'TVING,' unlike other foreign OTTs. This decision was made based on the judgment that without continuously providing new and locally optimized content, they could quickly fall behind in competition. HBO Max, initially expected to enter directly in the second half of the year, is also reportedly preparing partnerships with domestic platforms. HBO signed a one-year content supply contract with Wavve in July last year. Currently, the two companies are negotiating whether to extend the contract.

The reason global OTT companies are opting for partnerships with native OTTs instead of direct entry is due to the poor performance of Disney+ and Apple TV, which entered earlier. According to Mobile Index, a big data analysis solution by IGAWorks, Disney+'s monthly active users (MAU) in Korea in March stood at 1.15 million, down from November last year. Daily active users also dropped from 590,000 on the launch day to the 200,000 range. Although Apple TV's series 'Pachinko' is very popular, it has had little impact on subscriber numbers.

The industry cites the significantly low number of new content updates and the absence of Korean original content as reasons for the poor performance of Disney+ and Apple TV. Recognizing the need to produce new content, Disney+ announced plans to sequentially release more than 20 Korean contents, including at least 12 originals this year, but content updates have been slow.

Domestic OTTs Going Overseas

As the return to normal life accelerates with the end of remote work, lifting of private gathering limits, and extended business hours, the total number of OTT subscribers and users is turning downward. The number of people subscribing to multiple OTT services simultaneously is also decreasing. It is becoming difficult to secure loyal customers who switch between OTT services monthly.

Native OTTs are preparing to expand overseas to strengthen their competitiveness. TVING plans to enter the Japanese market in collaboration with Naver affiliate Line and then expand to Southeast Asia. Wavve is partnering with content, artificial intelligence (AI), and translation specialists to develop a platform for the global expansion of K-content.

The next government is also rolling up its sleeves to foster native OTTs. It will provide tax credit benefits for production costs to OTT companies and create collaborative platforms. Lee Jong-ho, nominee for Minister of Science and ICT, stated that to support the overseas expansion of domestic OTTs, it is important to establish a cooperative platform, such as a consultative body involving both the OTT industry and the government, to build a foundation for collaboration.