CJ ENM to Invest 5 Trillion Won in Content Over 5 Years... TVING Also to Expand Overseas Next Year (Comprehensive)

Kang Ho-sung, CEO of CJ ENM, Announces at Press Conference
Plans to Diversify Content Production Formats
80 Billion KRW Investment This Year... Drama, Entertainment, Film
Discovering Franchise IPs to Lead Long-Term Growth

CJ ENM held a press conference on the morning of the 31st at the CJ ENM Center in Sangam-dong, Mapo-gu, Seoul, announcing a long-term investment plan to invest 5 trillion won in content over the next five years. Photo by Kang Hoseong, CEO of CJ ENM

[Asia Economy Reporter Cha Min-young] "Including 800 billion KRW this year, we will invest more than 5 trillion KRW in content over the next five years."

On the morning of the 31st, Kang Ho-sung, CEO of CJ ENM, stated at a press conference held at the CJ ENM Center in Sangam-dong, Mapo-gu, Seoul, "We will reflect customer preferences in real time through interactive communication directly with customers and diversify content production methods." This is a preparatory step toward becoming a global total entertainment group.

'Webtoon → Movie → Drama' Transmedia Environment

CJ ENM's goal is to leap into a 'complete entertainment company.' To achieve this, they are building a transmedia content production environment where dramas, movies, webtoons, and performances freely share excellent original IPs. They will undertake large-scale, long-term content investments, including 800 billion KRW this year. They are also establishing a system and infrastructure for producing blockbuster intellectual property (IP) spanning drama, film, variety shows, and music. Content produced in specialized studio structures will be supplied not only to TVING but also to global OTT platforms such as Netflix.

CJ ENM plans to continuously secure mega music IPs as well. Following music festivals like 'KCON' and 'MAMA,' which spread K-pop worldwide, they will create localized versions of music audition programs. After recent successes with 'I-LAND' and 'JO1,' they plan to introduce a South American K-pop idol group audition program.

TVING to Expand Overseas Next Year... US and Japan Likely

Yang Ji-eul, Co-CEO of TVING

CJ ENM also announced plans for TVING to enter overseas markets next year, focusing on major countries such as the United States and Japan. TVING was established last October with the goal of being a global platform, not limited to Korea. However, this is the first time the specific year and countries for overseas expansion have been clarified. Japan and Southeast Asia were initially considered likely target countries. The appointment of Yang Ji-eul, who has experience with a US IT company, as co-CEO is known to be a strategic move for this purpose. TVING's cumulative paid subscribers have increased by 63% compared to the initial period, and new app installations have risen by 67%.

By 2023, TVING plans to produce about 100 original contents and secure 8 million paid subscribers. They will also nurture drama and variety show franchise IPs such as the 'Reply' series, 'Wise Life,' 'New Journey to the West,' and 'Great Escape.' Franchise IPs can be long-term valuable assets due to their extended value cycles. TVING co-CEO Lee Myung-han stated the policy is to "create the Marvel of Asia." The strategy is to turn customers with diverse tastes into fans of TVING through various content. To this end, more than 50% of TVING's total original content investment will be concentrated on nurturing franchise IPs.

"Advancement Needed in K-Content Distribution and Revenue Sharing"

CJ ENM also argued that the domestic content distribution and revenue sharing structure must change for the development of K-content. Recently, CJ ENM and the three IPTV providers issued statements and engaged in disputes over content usage fees. CJ ENM demanded a 25% increase in IPTV real-time channel usage fees from the three IPTV companies, citing rising content production costs. They are demanding a 1000% increase for OTT services like Season operated by KT and U+ Mobile TV by LG Uplus. The IPTV providers argue that increasing consumer fees is difficult due to household communication fee burdens, leading to a deadlock in negotiations.

Lee Myung-han, Co-CEO of TVING

CEO Kang Ho-sung pointed out, "The content distribution and revenue sharing structure must be advanced to meet global standards," adding, "While the value of K-content is recognized worldwide for its excellence, we have not seen a platform in Korea that can sustain growth in the content supply structure." He expressed concern that overseas OTTs might directly produce Korean content, leading to content production being dominated by major foreign OTTs.

The current solution to the excessive reliance on product placement (PPL) is said to be content usage fees. CEO Kang emphasized, "When supplying to IPTV companies and producing programs, only about one-third of the production cost can be recovered through subscription fees, so additional revenue must be carefully considered. In the US, fees range from 100% to 120%. For K-content to advance globally, change is necessary."

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