SK Telecom, including three significant broadcasters ― MBC, KBS, and SBS ― have received permission to launch a new online video service called Wavve. Industry officials expect Wavve to be the most definite home-grown contender to challenge Netflix’s fast growth in the country.
SK Telecom acquired a 30 percent stake in CAP with approval of the Fair Trade Commission (FTC). CAP, which operates the POOQ online video service, is a joint venture of the three broadcasters MBC, KBS, and SBS. POOQ streams content created by these broadcasters.
Oksusu, Sk Telecom’s video service provider, upon absorption by CAP will merge with POOQ to form Wavve, an “over-the-top” video service platform. Oksusu’s approximately 9.5 million subscribers and POOQ’s 3 million subscribers are expected to make Wavve the largest domestic online video service provider.
SK Telecom became the major stakeholder of CAP following the acquisition of the shares. CAP’s Wavve will run service by transiting Oksusu’s subscribers to Wavve. Wavve’s service is expected to begin on September 18.
Officials said the two platform’s union would generate a massive online video service provider who can rival the rapid growth of Netflix in Korea.
According to Wise App, a market tracker, estimated the number of Netflix’s paid subscribers in Korea as of June this year at 1.84 million, which is a threefold growth compared to 630,000 a year earlier.
An SK Telecom official said, “We will do our best for the new service to play the role of protecting the domestic media and contents industries.”
However, industry officials said several conditions which FTC placed on Wavve might impede the new service’s competitiveness in the market.
FTC prohibited the three broadcasters from ending or changing contracts providing content without a “proper reason,” and required Wavve to discuss with rivals “in a diligent manner” when requesting content.
“Let’s say Netflix wants to stream content created by SBS and Wavve wants a Netflix show,” an industry official said. “Netflix can dismiss the request, but Wavve has to negotiate the request. This means the advantage of having exclusive content will not be applicable for Wavve.”
It could have been better if the FTC approved Wavve unconditionally, with respect to the antitrust agency’s decision, the SK Telecom official said.