(Following '[Exclusive①] Yoo Jae-suk's 'Running Man' cannot be seen on Wave… the impact of SBS and Netflix's exclusive contract) SBS's exit from Wave is coming into view, and conversely, the integration of domestic OTT and the nurturing of local platforms are becoming distant.
On the 18th, news of SBS's exit from Wave was reported exclusively by OSEN. In this regard, SBS stated, "Nothing has been decided at this time," while Wave also noted, "We are in continuous discussions to maintain the supply of terrestrial broadcasting content," expressing their formal position to OSEN. However, the changed attitude compared to when SBS emphasized its retention on Wave during the announcement of the 'big deal' supply contract with Netflix leaves implications.
# "Broadcasting companies must survive" VS "Everyone will die if this goes on"
In this regard, a broadcasting industry official who requested anonymity revealed, "As viewers' departure accelerates, broadcasting operators are struggling to find solutions to address the situation," expressing some underlying circumstances. They assessed, "SBS's choice of Netflix was an appropriate decision for that strategy," especially noting, "As the status of platform operators in TV channels is shaken, they perhaps turned around to a stable content supplier position with the industry leader Netflix. Broadcasting companies already had most of their own production systems and had been supplying some content to Netflix. This shows a firm selection of position rather than being exceptional.
Meanwhile, another official from a domestic production company cautiously expressed to OSEN, "I am also concerned that a competitive structure is emerging between broadcasting companies and production companies." This official indicated, "In the past, production companies supplied content to broadcasting companies and distributed it overseas or through OTT via rights contracts. However, now broadcasting companies are stepping in as suppliers to Netflix," voicing their concerns.
The popularity that has continued through 'Squid Game' and the success of 'K-Pop Demon Hunters', which simply used K-Pop as a material, continues to heighten the market potential of K-content. However, the reality of the domestic content production industry has changed. For example, due to the cinema recession and the concentration of Netflix, the number of productions, which used to be nearly 200, has halved to around 80 this year. Meanwhile, the inflow of global funds has led to severe production cost inflation, exacerbating the rich-poor divide. SBS's exit from Wave seems to be a response to this.
# 'Public good' companies prioritize profits, employees also gain unfair profits
Thus, the 'nurturing of local OTT' has been regarded as a continuous policy task. It emerged as a bipartisan promise among major candidates during the last presidential election and was adopted by the new government. This is because it aims to maintain the domestic platform industry and prevent Korea from becoming a subcontracting base for global operators. Accordingly, Tving and Wave are undergoing the final merger process, having received conditional approval from the Fair Trade Commission for related corporate combination reviews.
Meanwhile, SBS was searched by the Financial Services Commission's Capital Markets Investigation Office on the 15th over allegations of employee violations of the Capital Markets Act. An SBS employee, referred to as A, is suspected of having used undisclosed information obtained during the contract negotiation with Netflix and SBS to buy a large amount of its own stocks before the public announcement, selling them for an unfair profit as prices rose. In response, SBS has decided to dismiss employee A and actively cooperate with the Financial Services Commission's investigation while strengthening related education to prevent recurrence. In fact, most SBS employees have made different choices than A. The illegal activity appears to be A's personal deviation.
However, there has been a growing public desire for the integration of domestic OTT to the extent that the question of "When will it merge?" arises. No matter how SBS is a private broadcaster, it is a terrestrial operator that utilizes the public good of broadcasting. Therefore, it is particularly regrettable that they chose an easy response of division instead of a long-term solution through the greater good. Could it be that such a system easily leads to moral hazard among the members?
[Photo] Source: Official websites of SBS, Wave, and the Financial Services Commission.
[OSEN]