Netflix to remain the South Korean streaming leader as Paramount+ leaves TVing

As of June 19th, Paramount+ will no longer be offered on TVing, South Korea’s biggest homegrown streaming platform, thus exiting the country. This stems from the decision made by Paramount and CJ E&M, TVing’s largest shareholder, not to renew their alliance made in December 2021. The initial deal included a co-production deal of Korean original series and a distribution agreement of CJ E&M’s content overseas, notably through a dedicated channel on Paramount’s Pluto TV. The latter distribution channel will also close on June 19th. This decision highlights the difficulties faced by both entities. On the one hand, Paramount has been entering merger agreements with various stakeholders. On the other hand, the analysis of TVing’s situation will shed light on the highly competitive market it operates in, and where many players struggle to generate revenues. What does the future look like for the South Korean streaming players? Do the pay OTT ad-supported tiers have the potential to be the silver bullet for them? Paramount’s future looks blur From the perspective of Paramount, the deal made with CJ E&M did not fit in its objectives. Its purpose was to boost the content offering quality and quantity on its distribution channels, as well as to expand into non-core markets. Therefore, it did not match the cost policy that the company has been implementing for some quarters. Furthermore, Shari Redstone, the President of National Amusements, which controls Paramount Global, has been engaging in talks to sell it. She did not meet an agreement with Skydance Media, as announced last week, but might reach one with Sony and Apollo Global Management, which offered $26 billion to take the company over. The future looks all the more blurry, as former CEO Bob Bakish stepped down in April, replaced by a trio of executives who form the “Office of the CEO”. Against this backdrop, it seems logical that Paramount pulled out from the deal with CJ E&M. South Korean streaming services struggle to generate revenues amid intense competition In 2010, CJ HelloVision launched TVing, later transferred to CJ E&M in 2016. Since then, the platform has been facing stiff competition in the market. First, the purchasing power of the population is quite high, thus enabling it to largely subscribe to paid services on top of owning high-end devices to get the most out of it. These strengths have attracted global players such as Netflix, Disney+ and Amazon Prime Video. In particular, South Korea has been a key market for Netflix, which committed to invest $2.5 billion in local content production over the 2024-2028 period. As South Korean content becomes increasingly relevant abroad, this trend is unlikely to wind down. Second, the potential of the South Korean streaming...

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