As CJ ENM's online video service (OTT) "Tving" is one step closer to the Korea Baseball Organization (KBO) league's wired and wireless broadcasting rights (new media broadcasting rights), Naver, an existing operator, is in trouble. This is because it is no longer possible to guarantee advertising revenue and views secured through baseball contents.

It is also expected to serve as a negative factor for the recently launched live streaming platform "Jigik." Although TVing can resell professional baseball content to Naver, Naver's free broadcasting is unlikely to continue if it bet a large amount of money and allows secondary works on YouTube.

CJ ENM has been selected as a preferred bidder in a competitive bid for the KBO league's new media broadcasting rights operator for three years from 2024 and is holding detailed negotiations. This is the result obtained by beating Naver Consortium (Naver, SK Telecom, LG Uplus, Africa TV) and Acla Entertainment (Spotv and OTT Spotify Now operators).

Attention was drawn to whether the existing operators, the telecommunications and portal consortium (Naver, Kakao, SK Broadband, KT, and LG Uplus at the time), would maintain their position, but Teving made a winning move by offering an all-time high. It is known that it has bet around 40 billion won per year, which is twice as high as before. It is more than 10 billion won per year than the 30 billion won range of Naver Consortium and Acla Entertainment.

In the case of baseball, games are held every day except Monday, and five games are played per day. Since the season will also last for about eight months from April to November, when the Korean Series will be held, there are few short-term defectors.

Naver enjoyed the effect of increasing traffic by posting professional baseball games and related contents through its portal Naver.

Naver Consortium broadcasted about 3,600 live games over the five years from 2019 and recorded 800 million cumulative viewers and 7 billion views on highlight video on demand (VOD).

In terms of Naver alone, the average number of concurrent users of the 2023 Shinhan Bank SOL KBO League increased 12.6% compared to the previous year to 6.1 million, and cumulative playback increased 27.5% on average to about 610,000 times. On November 10 last year, Game 3 of the Korean Series (LG Twins vs. kt Wiz) exceeded 410,000 concurrent users and 2.91 million cumulative plays.

Sports content has a thick fixed fan base and is easy to attract advertisements. Although the broadcast was provided free of charge, advertisements were placed in the middle of the video. Advertising sales generated from sports content contribute significantly to Naver. These advertisements are classified as search platforms, and based on consolidated sales in the third quarter of last year, search platforms generated 898.5 billion won in sales. This accounts for about 37% of the total sales of 2.4453 trillion won in the third quarter.

However, analysts say that if Teving becomes the final operator of the new media broadcasting rights after discussions with KBO, it is inevitable to hit the number of views and advertising sales.

The newly launched Zizik could lose its popularity as it fails to secure professional baseball content. This is because Zizik's competitiveness was that it could be freely used by streamers who broadcast live on Naver Sports.

Although there is a way to repurchase business rights from TVing, the majority say that it is unlikely in reality. "It is highly likely that TVing, which has important indicators such as inflow of new users or monthly active users (MAU), will not resell broadcasting rights to free platforms," a source in the content industry said.

The Naver consortium's offer of 30 billion won was made in consideration of the profitable part, and as Tving bet 10 billion won higher than this, it must induce subscription to the paid service Tving to make a profit to guarantee performance.

In addition, the bid is conditional on allowing secondary creations that post highlights and clips of professional baseball on social networking services (SNS) such as YouTube and Instagram. Rumors have it that such "platform scalability" was important to attract new baseball fans.

If TVing provides it to YouTube, Naver's place to stand will be narrower. It is already burdensome just to distribute videos on YouTube, but if Naver joins, the profit structure will be shaken.

The online broadcasting of professional baseball has been free for 18 years since 2006, so public opinion on "universal viewing rights" is strong, but since TVing is a paid service that requires a monthly fee of 9,500 won to 17,000 won depending on the recent subscription rating, it is expected that the fee will be gradually paid to offset the 40 billion won spent every year.

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