Tving-Seezn merger approved by the Fair Trade Commission

The deal when completed will create the country's second-largest streaming service, after Netflix.

The Tving-Seezn merger, first announced last July, was approved by the Fair Trade Commission (FTC) on Monday.

The deal when completed will create the country's second-largest streaming service, after Netflix.

Seezn is wholly owned by KT Studio Genie and Tving is 57 percent owned by CJ ENM. Seezn will be merged into Tving at a ratio of 1 to 1.5737519.

The antitrust regulator reasoned that the new company is not likely to leverage its position to raise the subscription fee due to stiff competition, as the combined share will not even be half of the Netflix share.

CJ ENM’s Tving ranked third in the local video streaming service market with a 13.07 percent share from January to September, according to data compiled by the FTC. Netflix topped the list with a 38.22 percent share, and Wavve came second with 14.37 percent. Coupang Play ranked fourth and Disney+ fifth, while KT’s Seezn came sixth, claiming 4.98 percent.

Tving and Seezn together will have a combined market share of 18.05 percent, beating the current No. 2 Wavve.

The two companies have not figured out specifically how the two streaming services will merge or new subscription models for a resulting service.

The FTC also said that the merger is not likely to disrupt the local content supply chain, as CJ ENM is expected to continue supplying its content to other video streaming services.

CJ ENM is supplying its original content to various video streaming services including Netflix. The FTC concluded that it will only cause more harm than good for CJ ENM if the company decides to cut the content supply deal with other players, as two-thirds of its content revenue comes from companies other than its own video streaming service.

“The merger between Tving and Seezn will not hurt the competition in the market," the FTC said in a press release.

“As the resulting company is likely to jockey for the market share against the previous industry leaders more aggressively, it will lead to the increased competitiveness of the entire local OTT industry."

The merger will be completed by December.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]