South Korea's top mobile carrier, SK Telecom (SKT), agreed with three major domestic broadcasters to merge their OTT services. The merger of SKT's Oksusu and POOQ operated by broadcasters was seen as a strategic move to compete with Netflix, the world's top video content streaming service which launched its service in South Korea in 2016.
The merged platform called "Wavve" would be launched officially on September 18. Operators vowed to secure 500 billion won ($420 million) in annual sales and invest some 300 billion won in content production by 2023.
"Wavve will have an overwhelming competitive edge with investments in original contents and global businesses," Lee Tae-hyun, the chief operator of Wavve, said in a ceremony on Monday. "We will create a new media ecosystem with our partners by leading the growth of South Korea's OTT industry and gradually advancing into the global market."
Science and ITC Minister Choi Ki-young said the government would speed up deregulation to support the growth of South Korea's broadcasting and media industry. "We will focus our policy capabilities on continuously improving outdated regulations that restrict market competition so that the local broadcasting and media industry can take another leap forward."
Original contents, including dramas and movies tailored to match OTT video-on-demand service users in South Korea, have contributed to a sharp increase in the number of Netflix fans. Netflix has aggressively added a lineup of South Korean blockbuster drams to attract young viewers who consume video content on the go in buses and subways using smartphones.
Netflix has provided a wide range of content including hit TV dramas and movies and analysts predict the American OTT service still has huge potential to grow in South Korea where super-fast 5G mobile networks, ideal for high-definition video streaming, are being established. To stop Netflix's dominance, local service operators including internet protocol TV (IPTV) and OTT operators have teamed up to combine their services.
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