Korea's largest OTT service provider Wave will be launched in September as the Fair Trade Commission (FTC) has approved the marriage between Oksusu, SK Telecom's over the top (OTT) service, and three terrestrial broadcasters’ video streaming service Pooq.
Wave will compete with Netflix and YouTube, which have been rapidly increasing their shares in the Korean market, and Disney, which is preparing to launch a video streaming service.
The FTC announced on Aug. 20 that it has conditionally approved the combination of Oksusu and Pooq. The outcome of the merger, Wave will begin its services on Sep. 18. SK Telecom will hold a 30 percent stake in the new entity and three terrestrial companies 23.3 percent each.
When Wave is launched, it will have a total of 14 million subscribers -- 10 million Oksusu subscribers and 4 million Pooq subscribers -- the largest number of OTT subscribers in Korea. Its OTT market share will reach 44.7 percent by combining 35.5 percent of Oksusu and 9.2 percent of Pooq. This eclipses the combined market share of U+ Mobile TV (24.5 percent) and Olleh TV (15.8 percent).
While endorsing the merger, the FTC imposed some restrictions on Wave. The FTC banned the three terrestrial broadcasters from terminating or changing their existing content supply contracts with other OTT providers without a reason. Moreover, when other OTT service providers request content supply, the three must negotiate with them in good faith on reasonable and non-discriminatory terms.
Netflix already secured 1.84 million paying subscribers as of June. A Netflix subscriber pays 13,130 won a month on average. If Disney starts its new OTT service Disney Plus in Korea in the first half of next year, the Korean OTT service market will see fiercer competition among many players. Disney Plus has a wide range of film and television content popular in Korea and is reportedly planning to provide its service at a low price of US$6.99 per month.
Industry insiders believe that Wave should boost its viability by securing diverse content before global OTT players step up their offensive. Wave plans to create original content and differentiate itself from global OTT players. Wave is also expected to offer immersive media services based on SK Telecom's VR and AR technologies.