Paramount's (PGRE) expansion to South Korea may add to Netflix's (NFLX) growing competition...
On Thursday, Paramount announced it will partner with South Korean media giant CJ ENM to develop seven television series and movies over the next two years. The film and streaming company also noted that Paramount+ will launch on CJ ENM's streaming platform too.
This marks the company's first streaming foray in South Korea and broader Asia – as Paramount believes the country's industry will ultimately become a major growth driver for the market.
With television series such as Netflix's Squid Game and the film Parasite receiving critical acclaim, South Korea's entertainment industry has rapidly gained global recognition. That's why Netflix has invested $1 billion in South Korean programming, one of its largest investments outside of the U.S. market.
It's also the reason competitors Apple (AAPL) and Disney (DIS) have begun to put South Korean films and television shows on their own platforms. And now that Paramount is partnering with CJ ENM, competition will likely become even more cutthroat.
In the wake of Netflix's lackluster quarterly results, this could further pressure on the streaming company. While Netflix remains one of the largest streaming platforms around, it reported a loss of 2 million subscribers in its first quarter – thanks to the rise of services such as Disney+ and HBO Max.
And with Paramount reporting 6.8 million new subscribers in its own first quarter, it shows many consumers are shifting away from Netflix in favor of up-and-coming rivals offering exclusive content of their own.
So, if this trend continues, it will not only solidify Netflix's shift from a growth company to a more "stable business," but it could also potentially lead to other services eating into its market share.