South Korea’s largest web browser operator, Naver Corp., announced that it would be strengthening its foothold in the fast-growing over-the-top (OTT) streaming service sector. To this end, Naver would obtain shares in CJ ENM’s OTT media platform, TVing.
Previously, Naver and CJ ENM joined hands to acquire Munpia Inc., South Korea’s third-largest digital comics platform. According to Naver, the Munpia acquisition would significantly expand its business portfolio and enhance its webtoon market leadership.
Naver is currently finalizing the stake purchase, wherein it would secure a 10 to 15% in TVing. Moreover, investment banking industry sources stated that Naver would inject millions of dollars into the CJ ENM stake deal. Additionally, CJ ENM holds over 80% of TVing. Naver would become the third-largest TVing stakeholder if the agreement pushes through, ranking after JTBC, a South Korean television network.
JTBC emphasized its goal to keep its second-largest TVing shareholder position, with a 16.67% stake, during the stake purchase proceeding. As a result, Naver would only spend no more than 100 billion won ($90 million) in purchasing TVing shares.
Naver also expects the CJ ENM collaboration to solidify its footing further in the e-commerce and OTT market, covering content such as web novels and webtoons. Besides improving Naver’s OTT foothold, the TVing share acquisition functions as an incentive for Naver’s online portal users.
In particular, it would encourage users to keep subscribing to Naver’s services due to the added TVing releases. Similarly, CJ ENM could utilize Naver’s extensive intellectual property library to develop new media content, including movies and series.
OTT Service Competition
Kakao Entertainment Corp., another leading South Korean company and a Naver rival, recently entered the OTT sector. Moreover, Kakao Entertainment acquired INISOFT Co., a local video streaming technology company, for 25 billion won ($22.3 million).
Kakao Entertainment’s INISOFT acquisition would also heighten the competition between South Korean e-commerce and entertainment platforms. In addition to Naver’s CJ ENM partnership, many domestic companies continue to increase their OTT-related operations.
For instance, Wavve, an SK Telecom affiliate, invested 80 billion won ($71.8 million) in its original content production. CJ ENM also allocated 5 trillion won ($4.5 billion) in content creation to increase competition with international powerhouses and boost K-content globally. Meanwhile, Coupang, a South Korean e-commerce giant, launched Coupang Play last year, officially participating in the domestic OTT market competition.
Furthermore, IT industry watchers noted that platform providers should put content at the forefront, especially amid the current market conditions. Industry sources also say that companies could also incorporate other services in OTT platforms, including memberships, shopping, and web browsing.
