Tving, a streaming platform operated by Korean entertainment giant CJ ENM, sets up a promotional booth at the Busan International Film Festival on Oct. 6, 2022. (Yonhap)
SEOUL, May 1 (Korea Bizwire) — As Netflix plans to carry out massive investments in Korean content, South Korean streaming platforms are facing deeper concerns after experiencing significant losses last year.
Tving’s operating loss reached 119.1 billion won (US$88.8 million) last year, representing an increase of 56 percent from the previous year. Wavve also saw an operating loss of 121.7 billion won, doubling from the previous year.
The losses mainly stem from excessive investment in the production of original content as South Korean platforms attempted to compete with Netflix and other global businesses.
Despite the increasing amortization of the investment content’s intangible assets, the number of viewers has dropped with the end of the pandemic, exacerbating the losses.
Furthermore, Netflix began making aggressive investments in Korean content, sidelining South Korean platforms.
“Rising production costs would prompt broadcasting and production companies to rely more on Netflix,” an industry official said.
In response to the mounting losses, South Korean streaming platforms are expected to take measures that focus on investment efficiency.
“We’ve been investing around 100 billion won in content creation every year, but the market environment has been hostile. We don’t expect to be profitable for the next one or two years,” said Wavve CEO Lee Tae-hyun during a recent press conference.
“Decision and focus will be our new strategy.”
H. M. Kang (hmkang@koreabizwire.com)
