The Story of the Tving-Wave Merger

What Should We See on the Path to Normalcy?

Have you heard the news that ‘Tving and Wave are merging’? Like two giant kingdoms trying to create one empire, this news excites and worries us. However, to truly understand this monumental event, we need to step back like a climber and view the entire mountain we are about to ascend.

Before we start this climb, shall we first grasp the essence of this mountain using a special compass called the ‘Genius Insight Formula’? This compass consists of four lenses that penetrate phenomena.

• Observation: What do we see? In front of us, a massive red mountain range marked with an ‘N’ (Netflix) dominates the Korean market, while the two climbers, Tving and Wave, are bleeding heavily with enormous losses on their respective paths. As of 2023, their combined operating losses approach 200 billion won. Their very survival is at stake.
• Connection: What are the invisible threads? Interestingly, the climbers (CJ and KT) who once joined forces by handing over their OTT (Seezn) to Tving to compete against SK (Wave) are now experiencing conflict as they attempt to go their separate ways. In 2022, KT became the third-largest shareholder by absorbing ‘Seezn’, valued at over 100 billion won, into Tving. Can you see the irony where yesterday’s ally has become today’s biggest obstacle?
• Pattern: What are the recurring rules? We discover a cold rule in the rugged mountain of media: ‘the larger climber ultimately occupies everything (economies of scale)’. The more content is produced and the more subscribers there are, the more advantageous it becomes in this winner-takes-all game. Netflix pours over 20 trillion won annually into content based on its 270 million global subscribers.
• Synthesis: So what is the essence? When we piece all these fragments together, it becomes clear that this merger is not an ambitious climb towards a higher peak, but rather a ‘desperate coalition climb to survive against the red mountain range’.

Now, let’s take this compass and embark on a journey together to the 90% mark, following in the footsteps of giants.

Part 1: The Giant’s Map: Three Different Perspectives on the Climbing Route

One event can take on entirely different meanings depending on who, when, and where it is viewed. Let’s unfold a special map called ‘Multi-Dimensional Analysis’ and examine this massive mountain of merger from three different angles.

Telescope of Time: Yesterday, Today, and Tomorrow’s Landscape

Shall we turn the telescope and travel through time?

• Yesterday (Past): Tving and Wave were competitors throwing stones at each other. Particularly, in 2022, KT formed a solid ‘anti-SK alliance’ by completely handing over its OTT ‘Seezn’ to Tving to counter SK (Wave). This was more than just an investment; it was akin to a blood alliance against a common enemy.
• Today (Present): In the face of survival threats, there are no eternal enemies or allies. When CJ (Tving) joined hands with SK (Wave), KT, feeling abandoned, became the largest rock blocking the path. The Fair Trade Commission imposed shackles of ‘price freezes’ and ‘prohibiting content supply to other OTTs’ due to monopoly concerns, plunging the merger into a deadlock where moving forward or backward is difficult.
• Tomorrow (Future): The foggy landscape splits into three paths. Is there a path where everyone smiles together and plants a flag as the ‘K-OTT Champion’? Or will there be a path of ‘mutual destruction’ where they blame each other and scatter into the fog? Or will there be a ‘thorny path’ where they struggle to continue the fight as a half-hearted alliance after KT’s departure?

Eye of Height: From Your Remote Control to the National Assembly

Shall we change our altitude?

• Lowest Point (Micro Perspective): This issue is immediately about the remote control in our hands. “So when will the apps merge? Will the UI be more convenient? Will my subscription fee go up?” There is confusion about user experience (UX) and anxiety about subscription fee increases.
• Middle Ground (Industrial Perspective): We see the chessboard of giant companies CJ, SK, and KT. CJ and SK desperately need an alliance for survival, but for KT, this merger poses a real threat of weakening its competitiveness in the IPTV market and diminishing its bargaining power as a content producer (Studio Genie). A fierce battle of complex calculations entangled with each party’s interests and pride is underway.
• Highest Point (Macro Perspective): We realize this is not just a corporate battle but part of a ‘cultural war’ to protect the flag of ‘media sovereignty’. It is a national issue of whether we will build a breakwater to protect our story or surrender everything to the waves of massive global capital.

Microscope of Causality: Everything is the Butterfly Effect of the Red ‘N’

Finally, let’s look through the microscope. What was the starting point of all this chaos? It was a butterfly called the red ‘N’ that flew into the Korean market. Its flapping wings brought a delightful wind that carried K-content to the world, but at the same time, it was a massive storm shaking domestic platforms to their roots. To survive in this storm, Tving and Wave joined hands, which caused cracks in their alliance with KT, and the government (Fair Trade Commission) imposed safety measures like ‘price freezes’, leading to a massive chain reaction where all events are interconnected.

Part 2: Flipping the Map of Thought: How to Find Hidden Paths

Until now, we have discussed the ruggedness of the mountain by looking at the given map. However, when the path is not visible, sometimes a shift in perspective by flipping the map is necessary. Let’s flip our thought map together using the tools of ‘Problem Redefinition’ and ‘Insight Amplification’.

Changing the Question Reveals the Answer

We kept asking, “How can we persuade KT?” But if we flip the map from KT’s perspective, the question changes.

“How can I (KT) show CJ and SK, who have become ‘traitors’, a future where they must go together?”

Also, shall we broaden the question of “How can we beat Netflix?” This is not just a battle for subscriber numbers in the domestic market.

“How can we make ourselves the ‘central bank of K-content’ and win the ‘IP financial war’ against the world?”

From this perspective, handing over the IP of Wave’s original to Netflix was a painful event akin to a bank losing its customers’ precious gold bars.

Digging Deeper with the Question “Why?”

“Why does KT oppose?” If we ask “why?” five times, we reach a surprising truth.

1. Why? → Because the value of shares will be diluted and influence will decrease after the merger.
2. Why? → Because CJ and SK do not sufficiently guarantee KT’s interests.
3. Why? → Because they are also bleeding heavily and cannot afford to take care of KT.
4. Why? → Because to win against Netflix, they must pour all resources into it.
5. Why? → Because the domestic market alone cannot create economies of scale.

Ultimately, their opposition is not just an emotional fight but a struggle for survival due to the small scale of our market, which does not meet the ‘global standard’. If this merger falls through, what future awaits? Ultimately, everyone bleeds and collapses, with only the red ‘N’ flag fluttering in a battlefield without a winner. In other words, KT’s opposition is not the best move but rather a desperate attempt to avoid the worst due to the lack of better alternatives.

Thus, the path becomes clear. The solution to this problem lies not in a ‘share negotiation’ that adds a few more bucks but in a grand picture of ‘restructuring the business portfolio’ where the three companies combine their strongest weapons to draw a new map.

Part 3: 10 Emergency Tools for Summit Climbing

Now, we have understood the essence of this mountain and discovered a new path. Finally, let’s open the bag of ‘Innovative Solutions’ and introduce 10 emergency tools that will help us take the last step to the summit.

1. ‘Golden Carriage’ for KT Instead of just a simple ride ticket, we provide KT with a golden carriage that takes them to their destination in the most comfortable and luxurious way. A groundbreaking proposal that offers exclusive early access to key content of the integrated OTT on KT’s IPTV (Genie TV) for a certain period and guarantees overseas distribution profits for content created by KT’s subsidiary (Studio Genie).
2. ‘K-Content Trust’ Account Have you imagined that part of the subscription fee we pay every month is directly invested in the dramas or movies we love? If successful, we receive profits back, providing a new experience that transforms consumers into ‘shareholders of K-content’. This helps form a strong fandom and alleviates production cost burdens.
3. ‘K-Culture Data Dam’ We gather the vast customer data held by CJ (entertainment), SK (telecommunications), and KT (telecommunications) to build a massive dam. This dam will predict “which actors and directors will create hits?” and recommend personalized content, becoming the heart of K-content that creates content based on data rather than intuition.
4. ‘Genre Universe’ Expansion Pack Just as the world of <Weak Hero> does not end with the drama but infinitely expands into webtoons, games, and merchandise, this strategy builds an attractive world centered around one IP that keeps fans wanting to stay. This maximizes the vitality of the IP.
5. ‘AI Concierge’ Service Until the two apps merge into one, a smart AI butler will create a perfect content course that crosses both sides, saying, “You had a great laugh with Tving’s entertainment, how about wrapping up your day with Wave’s masterpiece?” This serves as a bridge to prevent user churn until technical integration.
6. Global Fandom City ‘KOKOWA Universe’ Centered around Wave’s service in the Americas, ‘KOKOWA’, we dream of building a metaverse capital of K-culture where fans from around the world gather to travel to drama filming locations and interact with avatars of actors. This becomes a new revenue model and playground for global fandom.
7. Ad-Based Free Channel ‘Channel C·S·K’ For those burdened by subscription fees, we open a FAST (ad-based free streaming) channel where viewers can enjoy masterpieces from CJ, SK, and terrestrial broadcasters for free 24 hours a day by watching ads. This attracts new viewer demographics and generates additional ad revenue.
8. ‘IP Distribution Hub’ Instead of knocking on Netflix’s door ourselves, we become the hub that discovers good domestic IPs and sells them to Netflix, Disney+, etc., changing the market landscape. This is a strategy that turns ’enemies’ into ‘customers’.
9. ‘K-Media Alliance’ Membership Telecommunications, shopping, movies, broadcasting… CJ, SK, KT, and terrestrial broadcasters unite to offer unprecedented benefits (telecom discounts, shopping points, movie discount vouchers, etc.) through an integrated membership. This can create a strong lock-in effect.
10. ‘People’s Original’ Project Through a public contest, stories written by our neighbors become hundreds of billions of won blockbusters, realizing a democracy of content where viewers become owners. This can be the most certain way to garner national interest and support.

Epilogue: Looking at the Future from the Shoulders of Giants

After a long climb, we finally stand at the 90% mark. The summit seems within reach, but the last step will not be easy. This grand journey has taught us many things. Sometimes, cooperation is more powerful than competition, a larger vision is more important than immediate benefits, and understanding and wisdom towards each other can be stronger weapons than complex calculations.

Will this giant safely reach the summit? What will the landscape look like from the top? The answer now lies in the hands of CJ, SK, and KT. And the interest and support of all of us watching their choices will also add strength to the giant’s final steps. Let’s keep an eye on the last chapter of this grand drama together.