|Disney Plus' homepage / Courtesy of Disney Plus|
By Kim Jae-heun
The Walt Disney Company is preparing to launch its over-the-top (OTT) streaming media service here and it is cutting off its supply of original content to local players.
The country's largest OTT service, Wavve, said Sunday that its contract with Disney for subscription video on demand (SVOD) will terminate at the end of this month. Dozens of Disney animation and blockbuster films, such as the Marvel, Star Wars and Frozen series, will no long be available on Wavve in May.
"The due date of contract was until this month and Disney told us that it will not extend the SVOD service with us. However, we will still be able to purchase Disney series by units," a Wavve official said.
Disney has about 6,000 videos on Wavve, so taking out 100 of those may not seem like a big deal. However, this will affect the most popular videos and Wavve users will feel there is not much to watch if Disney stops supplying them on the domestic platform.
Disney is likely to end its SVOD contract with other local OTT players too.
Last month, Disney Plus made an official announcement that it will launch its service in Korea within this year. This decision means that it will need to own its original content exclusively to raise its platform's competitive power.
In 2019, Disney terminated its content supply deal to Netflix with the launch of its OTT service.
CEO Park Jung-ho of SK Telecom, which is the largest shareholder of Wavve, said during the general meeting of stockholders in last month that, "Disney seem to see Wavve as a rival."
Disney Plus is taking a passive attitude toward entering into business partnerships with the three main local telecommunication companies as well.
The companies need Disney's original content to maintain or secure a larger paid-membership audience for their Internet protocol television (IPTV) channels. For Disney, it is also a win-win strategy to establish a stable income by supplying its popular movies to local IPTV channels that already have thousands of subscribers.
When Disney first introduced its OTT service in the United States, it joined hands with Verizon Communications, the top telecommunications company there. In Japan, it signed an exclusive strategic alliance with top telecommunications firm NTT Docomo.
However, in Korea, Disney Plus is dragging its feet in pursuing partnerships with local firms. Since last year, the U.S. entertainment company has been contacting local counterparts, but it has not chosen a business partner yet.
"We offered good conditions to Disney, but they have not shown much interest and so we are frustrated," said an official at one of the three local telecommunications companies.