CJ ENM, JTBC team up to take Netflix head onCJ ENM teamed up with broadcaster JTBC to introduce an over-the-top (OTT) media service, the entertainment giant said Tuesday.
The announcement was made a day before the official launch of the homegrown OTT platform Wavve, which merged SK Telecom’s mobile video streaming app Oksusu and Pooq, a joint video-on-demand (VOD) platform by Korea’s three terrestrial broadcasters.
CJ ENM said it signed a memorandum of understanding with JTBC to launch an integrated OTT service based on its existing platform Tving. CJ will be the majority shareholder, and JTBC will be the second-largest shareholder of the joint venture.
The service, which is scheduled to launch early next year, will offer content from the two companies.
CJ ENM runs cable channels OCN and tvN, which produced hits like “Youn’s Kitchen” (2017) and “Guardian: The Lonely and the Great God” (2016). JTBC was behind the television hit “SKY Castle” (2018-19).
“It’s crucial to form a virtuous cycle of reinvesting profits earned from various platforms on new content, which could help the content gain global competitiveness,” said a spokesperson from CJ ENM.
“Broadcasting and the content businesses are changing rapidly,” said a spokesperson for JTBC. “You must build a system that endlessly introduces differentiated content and distributes it.”
The recent series of collaborations reflect domestic companies’ growing recognition of online streaming service on back of the growing influence of global media giants like Netflix. Their goal is to take on such giants with an emphasis on Hallyu, or the Korean Wave of cultural products.
But some industry insiders argue that overemphasis on Hallyu content could leave their business vulnerable.
“Local content providers hope to take on Hallyu to appeal globally, but the Hallyu trend in the long run is not powerful enough to help the firms sustain themselves,” said Park Gi-su, a professor who teaches cultural content at Hanyang University.
“A lot of Hallyu content is already consumed abroad via illegal downloading platforms, so it’s crucial for the domestic OTT providers to offer differentiated content.
“In fact, Netflix started gaining competitiveness in the market only after it started developing original content that was well-received.”
Netflix is the leader in the Korean OTT market, with its subscribers standing at 1.86 million as of July, more than a fourfold jump from 420,000 during the same period the previous year.
But some argue the rise of domestic OTT providers could hurt Netflix’s reach in the Asian market.
“Netflix’s entrance to Korea is seen as an attempt to gain influence in China instead of trying to enlarge the OTT pie in Korea,” said Jang Seok-jun, a professor who teaches media and communication at Chung-Ang University. “That’s why they invested in Korean original series like ‘Kingdom’ that will likely become popular in China. The appearance of Korean rivals will make it difficult for Netflix to air their original content, possibly hindering its plan to raise its presence in the Asian market, where Hallyu works.”
Offering live content is also something Netflix doesn’t have, according to Jang.
The competition in Korea will likely grow with the CJ-JTBC service next year as well as foreign OTT providers like Disney Plus and Apple TV Plus, which are both scheduled to launch in the United States in November.
BY JIN MIN-JI [email@example.com]