TVING and Wavve Sign Merger MOU... Will a 9 Million Subscriber Native OTT Emerge?

South Korea's two major native online video services (OTT), TVING and Wavve, are taking concrete steps toward a full merger. CJ ENM and SK Square signed a memorandum of understanding (MOU) for the merger on the 4th.

Currently, CJ ENM holds a 48.85% stake in TVING, while SK Square owns 40.5% of Wavve. Although the exact merger ratio has not been finalized, it is known that CJ ENM will become the largest shareholder after the merger, with SK Square becoming the second-largest shareholder. Both companies stated, "Both sides have held consultations to strengthen OTT competitiveness and signed a merger MOU between the shareholders, but we cannot disclose detailed information at this time."

Both parties plan to complete due diligence and undergo the Fair Trade Commission's corporate merger review, aiming to sign the final contract early next year.

If TVING and Wavve merge, they are expected to become the second-largest OTT in South Korea, following Netflix. As of last month, Netflix had the highest monthly active users (MAU) at 11.37 million. Simply adding the users of TVING and Wavve amounts to 9.33 million (including overlapping subscribers).

With fierce competition in content, both companies recorded operating losses exceeding 100 billion KRW last year. Industry insiders expect that the merger will reduce investment burdens and secure content competitiveness. Lee Hwajeong, a researcher at NH Investment & Securities, said, "Even collaboration between the two companies alone is expected to bring meaningful improvements in content competitiveness. If a merger becomes possible, it is expected to secure a position in the K-content genre that can rival any global OTT."