Netflix Drops Bid for Warner, but K-Content Investment Remains on Track

Netflix has pulled out of the bidding war with Paramount Global for Warner Bros. Entertainment, effectively ending the prospect of creating a new OTT streaming behemoth. In South Korea, where Netflix already commands an overwhelming market share, concerns that it would further strengthen its dominance have eased. Analysts also say that OTT platforms which have secured Warner Bros. Entertainment content or formed partnerships with the studio will now be able to maintain those relationships.
According to the OTT industry on the 9th, Netflix signed a deal in December last year to acquire Warner Bros. Entertainment for 72 billion dollars. However, Paramount Global came in with a much higher offer of 111 billion dollars. Paramount Global even agreed to cover a 2.8 billion dollar breakup fee owed to Netflix under the original contract, clearing the way for it to take over Warner Bros. Entertainment.
Data from S&P Global Market Intelligence show that, as of last year, Netflix held more than a 40% share of revenue in South Korea’s OTT market. Its share of subscribers also stood at 33%, the highest in the market. The size of its user base is similarly overwhelming.
With the acquisition called off, the business environment for other OTT services that work with Warner Bros. Entertainment is also expected to remain intact. Coupang Play, for example, signed an exclusive content partnership in March last year with Warner Bros. Entertainment covering Home Box Office (HBO) and HBO Max titles. CJ ENM likewise entered into a partnership with Warner Bros. Entertainment in October last year and has been expanding cooperation, including launching a TVING Branded Zone on the global OTT service HBO Max. Since January, TVING has opened its TVING Branded Zone within HBO Max in 17 Asia-Pacific countries, offering CJ ENM and TVING original content to viewers around the world.
Because the deal did not turn into a hostile takeover, Netflix’s stance on investing in Korean content is also expected to remain solid. The company has previously announced plans to invest about 2.5 billion dollars in Korean content between 2023 and 2026.
kaya@fnnews.com Choi Hye-rim Reporter