Tving and Seezn may merge as Netflix trounces market

Executives from CJ ENM and KT pose for photos after signing an agreement on production and distribution in March. [KT]

CJ ENM and KT may merge Tving and Seezn to form the biggest domestic streaming service.

The possible deal comes as local companies fight against the seemingly unstoppable Netflix and the rush of other foreign competitors, such as Disney+.

According to local media reports, Tving and KT Studio Genie will each hold board meetings Thursday to discuss the merger of the two services. If the merger is passed, then the resulting company will have the highest number of users for a Korean service.

The coalition between Tving and Seezn has 4.4 million subscribers, making it No. 2, beating No. 3 app Coupang Play by 1.2 million and Wavve by 1.4 million.

The merger will also allow them to save marketing costs and use that to invest in producing high quality original content. Tving reported an annual operating loss of 207.7 billion won ($159.3 million) last year. Of that amount, 18.1 billion won was spent on advertising. KT Seezn’s operating profit was 2.5 billion won in 2021.

“It’s a win-win for both, because Seezn can target beyond KT subscribers and CJ ENM can get access to KT’s 14 million phone users,” said Choi Nam-gon, an analyst at Yuanta Securities.

Tving is a 57-percent-owned subsidiary of CJ ENM. KT Studio Genie was founded in January 2021. It is owned by KT.

Domestic consolidation has been encouraged, especially as the domestically-owned services have been losing viewers.

Netflix had over 10 million users as of April, according to market tracker WiseApp. Tving, Coupang Play and Wavve followed all had slightly over 3 million.

This year, CJ ENM invested 100 billion won in KT Studio Genie for distribution and development. KT said that CJ ENM owns around 10 percent of KT Studio Genie but did not provide an exact number.

When asked if the two services may be joining by reporters during a press conference in April, Kang Kook-hyun, head of the customer business group at KT said nothing has been decided yet but that the company is open to "all means to strengthen the competitiveness of the local media landscape."

The companies declined to comment on the issue.

BY YOON SO-YEON [yoon.soyeon@joongang.co.kr]