Korea’s premium Video-On-Demand (VOD) industry has experienced significant growth in the third quarter of 2023. According to a report from Media Partners Asia (MPA), the number of subscriptions increased by over 700,000, reaching a total of 19 million. This surge in subscriptions indicates a growing demand for online streaming services in the Korean market.
The Dominance of Netflix
One of the key players in the Korean VOD market is Netflix. The MPA report reveals that Netflix currently holds the largest market share, capturing 29% of new subscribers and reaching a total of 6.5 million subscribers in Korea. This dominance has prompted Tving and Wavve, two major local streaming platforms, to sign a memorandum of understanding (MoU) for a merger.
According to local press reports, CJ ENM, which owns 48.85% of Tving, and SK Square, which owns 40.5% of Wavve, have signed the MoU for the merger. If the merger goes ahead, Tving and Wavve will become Korea’s largest streaming service. CJ ENM is expected to become the largest shareholder of the merged entity, with SK Square being the second largest.
Besides Netflix, Tving and Wavve have also established themselves as significant players in the Korean VOD market. Tving currently has 3.8 million subscribers, accounting for a 20% market share, while Wavve has 3 million subscribers, capturing a 16% share. Another noteworthy participant is Disney+, which had a breakthrough quarter, reaching 2 million subscribers and an 11% share. The popularity of hit superhero action drama Moving played a crucial role in Disney+’s growth.
In terms of viewership, Netflix remained the leader during the quarter, with 35% of the market share. Tving and Wavve followed with 26% and 20% respectively. This data signifies the deep engagement of viewers with these platforms, supported by robust subscriber growth and a plethora of drama and variety releases. Tving’s reality hits, such as tvN’s Earth Arcade, have tapped into large network audiences, while Disney+ had its first major original hit with Moving.
One key advantage that Tving, Netflix, and Wavve possess is their extensive library of exclusive local titles. The MPA report highlights that these three platforms captured 80% of Korea’s premium VOD viewership in the third quarter of 2023. This further emphasizes the importance of a strong local content pipeline in attracting and retaining subscribers in the Korean market.
While Tving and Wavve have made significant strides in the VOD industry, both platforms have faced financial challenges. Tving incurred an operating loss of $90.7 million (KRW 119.2 billion) in 2022, while Wavve’s losses amounted to $92.5 million (KRW 121.6 billion). These figures highlight the competitive nature of the premium VOD market and the need for continuous investment and strategic partnerships to sustain growth.
The growth of Korea’s premium VOD industry in the third quarter of 2023 showcases the increasing popularity of online streaming services in the country. While Netflix dominates the market, the emerging merger between Tving and Wavve has the potential to reshape the industry landscape. Local content and innovative programming have played significant roles in attracting subscribers and driving viewership. Despite financial challenges, the prospects for the Korean premium VOD industry remain promising, fueled by the demand for high-quality entertainment in the digital era.