Tving-Wavve merger unlikely to close this year as talks stall

The merger between domestic streaming platforms Tving and Wavve looks increasingly unlikely to close this year, as talks with KT Corp — the final hurdle — are only now getting under way, while a personal data breach at Tving has added fresh complications.

While the merger has dragged on for nearly three years, Netflix has surged past 16 million monthly active users in South Korea, setting new records every month.

The combined entity had been expected to emerge as the only homegrown streaming giant capable of challenging Netflix, but the delayed launch has left the domestic OTT sector in a state of paralysis. Calls are growing louder for a scaled-up Korean streaming platform to mount a credible response.

Industry sources said Friday that merger talks between Tving and Wavve have made little meaningful progress, making it effectively impossible to wrap up the deal within the year.

The two companies signed an MOU in December 2023, but nearly three years on, the deal remains unfinished. They received conditional merger approval from the Korea Fair Trade Commission in June last year, yet the process has stalled again and is now likely to carry over into another year.

The key to completing the merger lies in winning over KT Corp. KT Studio Genie, a KT Corp subsidiary, is Tving's second-largest shareholder with a 13.54 percent stake. All other shareholders have agreed to the merger, but KT Corp has held out. The company is said to oppose the deal out of concern that a merged entity could hurt its IPTV service business.

CJ ENM, which operates Tving, said it plans to begin formal negotiations with KT Corp in the second half of this year.

At its second-quarter earnings conference call on Aug. 6, Tving said it would "actively pursue merger discussions in the second half, based on cooperation" with KT Corp.

Earlier in July, KT Corp CEO Park Yun-young said the company had not "officially received any request" regarding merger talks with Tving. Asked what would happen if such a request came in, Park said "there would be many things to consider," adding that "the content market is changing dramatically, so there is a lot to weigh — including the interests of the domestic industry, the company, and the content catalog."

A string of other complications is also holding things back. A personal data breach that occurred in early June has left a series of follow-up actions pending, including the government's investigation findings, potential fines and customer compensation measures.

Industry observers say it will be difficult to push forward with launching the merged entity until the data breach situation is fully resolved, as containing the fallout must take priority.

Another new variable is the possibility that SLL Jungang may sell its Tving stake to address liquidity concerns within its group. SLL Jungang held a 12.74 percent stake in Tving as of the end of last year. Tving said it "plans to continue discussions with SLL in connection with the Tving-KT talks."

Meanwhile, Netflix has intensified its push as the launch of a merged Korean streaming platform continues to be delayed. According to IGAWorks' Mobile Index, Netflix recorded 16,328,918 monthly active users in July — sustaining its growth after surpassing 16 million for the first time the previous month.

Over the same period, Tving logged 8,502,005 monthly active users and Wavve 4,015,109 — meaning the two platforms combined still fall short of Netflix. Coupang Play, which is locked in a battle with Tving for second place, recorded 8,680,949 monthly active users.