Streaming the Future: Why South Korean Domestic Platforms Are Poised to Overtake Netflix

The South Korean streaming market is at a crossroads. While Netflix remains the dominant player with 40% of the market, domestic platforms like Tving and Wavve are embarking on a bold merger to consolidate their position, fueled by aggressive content investments and a strategic push to globalize. This is not just a regional battle—it’s a blueprint for how localized content and strategic alliances can disrupt Netflix’s saturation in Asia and beyond. For investors, this is a rare opportunity to bet on undervalued players with clear pathways to growth.

The Tving-Wavve Merger: A Game-Changer in the Making

The proposed merger between Tving and Wavve, driven by their major shareholders CJ ENM and SK Square, could create South Korea’s largest domestic streaming service overnight. Combined, they would command 35% of the local market—closing in on Netflix’s 40% share—and pool resources to tackle operational losses (Tving lost $90.7M in 2022; Wavve lost $92.5M). The merged entity would also gain scale to negotiate better licensing deals and reduce costly redundancies.

Yet this deal isn’t without hurdles. KT Corp., a 13% Tving shareholder, has raised concerns about shareholder value, arguing the merger might dilute strategic synergies. However, if resolved, the merger’s benefits—like combining Tving’s K-drama dominance with Wavve’s sports and broadcast content—could make it a formidable global competitor.

CJ ENM’s $106M Content Gamble: Betting Big on Global Expansion

CJ ENM’s decision to boost its 2025 content budget by $106M (KRW150B) signals a bold pivot toward global reach. With a total content budget now at $812M (KRW1.15T), CJ aims to turn Tving into a global player, targeting 15M international subscribers by 2027. This isn’t just about more Korean dramas—it’s about co-productions with Hollywood studios (Paramount, Warner Bros.), remakes for global audiences, and expanding into markets like Japan and Southeast Asia.

The strategy makes sense: K-drama exports like Squid Game and Crash Landing on You have proven viral potential. By leveraging Tving’s ad-supported model—which already accounts for 39% of its subscriptions—CJ can attract cost-conscious users while monetizing premium content in mature markets.

Coupang Play’s Hollywood Pivot: A Stealthy Threat to Netflix

While the Tving-Wavve merger grabs headlines, Coupang Play is quietly building its own arsenal. Partnering with Hollywood giants like Paramount and Warner Bros., Coupang Play is blending Korean originals with global blockbusters—a strategy that’s already lifted its market share to 13%. This hybrid approach challenges Netflix’s reliance on its own content factory, while avoiding the costly need to fund everything in-house.

Why Now Is the Time to Invest

The South Korean streaming market is ripe for consolidation. Domestic platforms have two key advantages:
1. Localized Content: K-dramas, variety shows, and sports broadcasting (Wavve’s strength) are cultural touchstones that Netflix can’t easily replicate.
2. Cost Efficiency: Mergers like Tving-Wavve will reduce redundancies, while ad-supported models (Tving’s 39% adoption) offer lower-cost entry points for users.

Meanwhile, Netflix faces headwinds: stagnant subscriber growth in saturated markets and rising content costs. For investors, betting on domestic platforms now could mean capturing upside as these companies leverage their strengths to carve out global niches.

Risks and the Path Forward

Regulatory hurdles and shareholder disputes (like KT’s objections) pose near-term risks. But the merger’s strategic logic is undeniable—combining forces to counter Netflix’s dominance. If approved, the merged entity’s 35% market share would force Netflix to cede ground, especially as Tving-Wavve expands internationally.

Final Analysis: A Buy Signal for Aggressive Growth Investors

South Korean streaming stocks are undervalued relative to their global potential. Tving and Wavve’s merger, CJ ENM’s content bets, and Coupang Play’s Hollywood partnerships form a trifecta of growth catalysts. With K-content demand surging worldwide and Netflix’s margins under pressure, now is the time to position for this shift.

The South Korean streaming market isn’t just fighting for local relevance—it’s building a template for how regional players can disrupt global giants. For investors willing to act now, this could be the next great growth story.

Act now before the tide turns.