SK Telecom and the three major broadcasters in South Korea have received the green light to launch a new online video service called Wavve, which ill directly compete with Netflix in the country.
The Fair Trade Commission (FTC) said it had approved SK Telecom’s acquisition of a 30 per cent stake in CAP, which runs the POOQ online video service. CAP is a joint venture of the three broadcasters ― MBC, KBS and SBS ― and POOQ streams content created by them.
CAP will absorb SK Broadband’s video service Oksusu, and merge it with POOQ to create Wavve, an “over-the-top” service platform. Wavve is expected to be the largest home grown online video service provider, given Oksusu has approximately 9.5 million subscribers and POOQ has 3 million. Their combined market share reached 44.7 percent last year.
Following the transaction, SK Telecom becomes the largest stakeholder of CAP, and CAP will run the Wavve service by transiting Oksusu subscribers to Wavve. Wavve is expected to begin its service on September 18th.
Officials said the two platform’s merger will create a massive online video service provider which can compete with Netflix.
“We will do our best for the new service to play the role of protecting the domestic media and contents industries,” an SK Telecom official said.