Tving-Season Announce Merger... Securities Firms Expect Synergy Effects from Launch of Korea's Largest OTT

[Asia Economy Reporter Lee Myunghwan] As the domestic online video services (OTT) Season and TVING announced their merger, the securities industry responded positively on the 16th. It is explained that synergy effects are expected from the merger of the two companies.

On the 14th, KT announced that it decided to integrate Season and TVING together with CJ ENM to strengthen OTT competitiveness in the domestic media and content industry and accelerate the growth of K-content. CJ ENM also held a board meeting on the same day and resolved the merger plan with KT Season.

With this merger decision between TVING and Season, the largest domestic OTT service with over 5 million users is expected to be created. According to the estimate by Mobile Index, a big data analysis solution by IGAWorks, the number of users of major OTT services operating in South Korea as of June this year are Netflix 11.18 million, Wavve 4.24 million, TVING 4.02 million, Coupang Play 3.73 million, Disney+ 1.68 million, Season 1.57 million, and Watcha 1.09 million. If the number of users of both services is simply added, it amounts to 5.59 million, surpassing Wavve, which was the number one domestic OTT provider, while securing nearly half the users of Netflix.

The securities industry generally views this merger as a win-win structure that can complement the shortcomings each company had in the media business. Meritz Securities saw this merger as an opportunity for KT Studio Genie, which proved its content distribution and channel capabilities through the hit drama "Extraordinary Attorney Woo," to strengthen the OTT platform capabilities that were considered lagging in competitiveness. CJ ENM, which had concerns about growth due to stagnation in TVING’s subscriber numbers recently, is expected to resume growth with this merger.

There is also analysis that cooperation and business synergy between CJ ENM and KT in the media and content business sectors are expected through the merger. The two companies have signed a memorandum of understanding (MOU) to promote business cooperation in various fields such as music and broadcasting. Additionally, KT launched the "TVING·Genie Choice" plan on the 1st, allowing unlimited data use for TVING.

Choi Minha, a researcher at Samsung Securities, said, "There is also a strong possibility of pre-installing the TVING application on smartphones released by KT in the future," and predicted, "As KT customers’ accessibility to TVING becomes easier, it is expected to help expand TVING users." Jeong Jisoo, a researcher at Meritz Securities, also forecasted, "If TVING is installed as the default app instead of Season for KT’s 14.02 million mobile subscribers, the scale of TVING subscribers could greatly expand, which is expected to have a positive effect on CJ ENM’s stock price."