Netflix's grip on South Korea's streaming market begins to slip

"There's nothing worth watching on Netflix except 'Teach You a Lesson.'" — Lee (30), a Netflix subscriber

Netflix's share of South Korea's online streaming market has shrunk over the past year. After holding above 40 percent last year, its monthly active user share slipped into the 30s in May, raising questions about whether the platform's once-dominant grip on the local market is beginning to crack.

According to market research firm WiseApp·Retail, Netflix accounted for 37.8 percent of monthly active users among domestic streaming apps in May. Coupang Play came in second at 24.4 percent, followed by Tving at 17.8 percent, Disney+ at 6.7 percent and Wavve at 6.1 percent.

WiseApp·Retail data shows Netflix held a 40 percent MAU share in June last year, maintaining a share in the low-to-mid 40s through the end of last year before falling into the 30s over the past 12 months.

Industry observers say homegrown platforms Coupang Play and Tving have chipped away at Netflix's dominance as both push to consolidate a two-player lead in the domestic market through stronger content offerings.

Coupang Play and Tving have each focused on securing users through distinct content strategies — global sports broadcasting rights and Korea Baseball Organization league content, respectively. Their efforts are showing results: Coupang Play's MAU share edged up from 21 percent in June last year to 24.4 percent in May, while Tving's share rose from 17 percent to 17.8 percent over the same period.

Industry insiders say the cracks in Netflix's dominance have opened a window for domestic platforms to gain ground. However, a long-discussed merger between Tving and Wavve — which would create a domestic rival with the scale to compete — remains stalled for the fourth consecutive year.

The merger requires the consent of all major shareholders, but KT Corp has yet to give its approval. Industry watchers had widely expected the deal to accelerate after KT Corp's new management team under Park Yun-young took the helm earlier this year, but the company has continued to deliberate throughout the first half.

Industry sources point to share dilution as the key reason for KT Corp's silence. CJ ENM is currently Tving's largest shareholder with a 48.45 percent stake, while KT Studio Genie holds 13.54 percent as the second-largest. A merger with Wavve would likely hand that second-largest position to SK Square — which holds a 40.52 percent stake in Wavve — leaving KT Corp concerned about a loss of influence.

A shareholder agreement signed between KT Studio Genie and CJ ENM also complicates matters. The two companies entered into the agreement when the streaming service "Seezn" merged with Tving in 2022, and the deal is understood to include provisions related to an initial public offering. Observers say KT Studio Genie could face compensation or settlement issues if the Tving-Wavve merger proceeds.

"Netflix still holds an overwhelming lead in terms of total viewing time, but in terms of user numbers it is being pressured by Coupang Play and Tving," an industry official said. "If the Tving-Wavve merger continues to be delayed, domestic platforms could miss the best window to expand their foothold."

Meanwhile, Tving and Wavve formalized their merger plans by signing a memorandum of understanding in 2023. The Korea Fair Trade Commission conditionally approved the merger in June last year, requiring both services to maintain their current subscription pricing through the end of 2026.