Dangerous Outside the Blanket, Promising Content Stocks

OTT·VOD License Revenue Expected to Increase... Studio Dragon Earnings Forecasted to Improve

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[Asia Economy Reporter Geum Bo-ryeong] As the 'stay-at-home' lifestyle due to the novel coronavirus infection (COVID-19) has prolonged, media content stocks are attracting attention.

According to Nielsen Korea on the 9th, the viewership rating of the drama Itaewon Class on the 7th (episode 12) was 13.4%. Based on the same episode, its ratings are rising faster than Sky Castle (12.3%). In addition, Crash Landing on You, which ended last month, recorded 21.7%, Romantic Doctor Kim Sa-bu 2 27.1%, and Stove League 19.1%. The combination of increased total viewing time and high-quality dramas has produced record-breaking ratings.

In this situation, drama production companies are expected to see increased additional copyright revenue through Over-The-Top (OTT) services and Video On Demand (VOD). Content consumption via IPTV and OTT usage such as Netflix and Watcha Play is increasing. Minha Choi, a researcher at Samsung Securities, explained, "According to online theater box office results, paid IPTV movie transactions last month reached 3,263,000, an 81% increase compared to 1,801,000 in the same period last year," adding, "Even middle-aged and older generations, who previously had low OTT purchase rates, are experiencing convenience, which may accelerate changes in OTT consumption behavior."

The most notable stock is Studio Dragon. Studio Dragon has already started sales contracts with Netflix since January, and its profit capacity is expected to improve compared to the previous year. Ki-hoon Lee, a researcher at Hana Financial Investment, said, "The COVID-19 issue is calming down domestically, and in fact, at least until the end of this month, travel to and from Japan is not possible," adding, "Drama production, which is expected to benefit from COVID-19 while the influence of Japan and China is limited, is the first factor." Studio Dragon's stock price rose 4.75% from 73,700 won on the 28th of last month to 77,200 won on the 6th.

Media content stocks are expected to reflect anticipation of the easing of the 'Hanhanryeong (Korean Wave ban)' after the COVID-19 issue is resolved. The researcher analyzed, "Since the Korean government has been communicating about Chinese President Xi Jinping's visit to Korea from early this year to the first half, if the number of confirmed COVID-19 cases slows down, expectations for President Xi's visit may continue."

This content was produced with the assistance of AI translation services.