[Interview] "Broadcast Channels Achieve Win-Win Through Flexible Collaboration with OTT and Production Companies"

SK Broadband Subsidiary ChannelS
7 Months Since April 8 Launch
Goal to Strengthen Content Competitiveness
Massive Recruitment of External Talent
Bold IP Sharing Terms with Production Companies

[Asia Economy Reporter Lee Isul] There was a time when content was only accessed through theaters and TV. Terrestrial broadcasters easily surpassed 40% viewership ratings during weekend prime time, and theaters thrived as 10-million-viewer movies were released one after another. In the era when dramas and variety shows were watched through terrestrial channels and movies could only be seen by going to theaters, location was very important. Now, 'where' is no longer important. Instead, it has become an era where more attention is paid to 'what kind' of content it is. This is not unrelated to market changes caused by COVID-19 (novel coronavirus infection). Changes in the digital market are a natural flow, but the speed accelerated at the turning point of the pandemic.

In a recent interview, Kim Hyuk, CEO of Channel S Media S, and Kim Hyun-sung, Chief Operating Officer, emphasized, "We need to create synergy through collaboration with online video services (OTT) and IPTV VOD that share the same vision as the broadcasting channel."

Channel S, launched on April 8, is a comprehensive entertainment pay channel operated by Media S, a 100% subsidiary of SK Broadband (CEO Choi Jin-hwan), a multiple channel operator (MPP).

Kim Hyun-sung, COO, self-assessed, "As of October, we rose to 36th among all channels, and viewership ratings increased by about 60%. We are entering a meaningful channel faster than expected." He also expressed his ambition, saying, "Someday, I want to create a competitive channel that ranks within the top 10."

Channel S aired content from KakaoTV through partnerships with Kakao Entertainment, such as the 'Ants Keep Going Ttuntun' series and 'Change Days,' and also introduced original content. Variety programs like 'With God' led by Shin Dong-yup, 'Great Home Cook Lab' featuring Kang Ho-dong and Leeteuk, 'Love Master,' and 'Healing Lodge Season 2' attracted attention.

Channel S has embarked on a full-fledged journey by forming a production team to strengthen competitiveness. They recruited Moon Hee-hyun, production team leader who directed 'The Genius Season 1' and 'Wednesday Food Talk,' PD Kim Soo-hyun of 'Brain Sexy Era - Problematic Men' and 'Dogs and Cats That Need Conversation,' and PD Lee Jun-gyu of 'Miracle Audition' to plan new content.

CEO Kim Hyuk laughed, saying, "Many people ask why we are running a channel business when the media market is changing centered on new media in the OTT era." He added, "We agreed not to create a channel that feels like something seen somewhere else. Good content created on KakaoTV is something that couldn't be seen on existing channels or large TV screens, so it might approach viewers in a new way. The produced content is targeted at families. 'Great Home Cook Lab,' co-produced with SM C&C, was for that purpose. There are also increasing broadcasts jointly planned and produced with companies like KBS and SBS."

CEO Kim Hyuk

Hyunseong Kim, Chief Operating Officer

COO Kim Hyun-sung stated, "We are planning to produce content that the MZ generation would be interested in. To support original content production with planning capabilities, we formed a separate production team to work with external partners."

The management emphasized that they will present unique content that differentiates from existing content. To this end, they also held a contest. Kim revealed, "We conducted a contest for about two weeks targeting various external personnel. We received proposals and plan to produce some of them." He added, "As channels increase and the structure where production companies simply supply content changes, we are considering sharing production companies and IP (intellectual property rights) and dividing profits. Through this, we aim to create a win-win situation with production companies."

The industry's attention was drawn to the proposal to jointly own production companies and IP. This broke the convention where broadcasters owned IP and only shared it in other areas. Regarding this, Kim said, "This was a request from several production companies, and we thought a lot about how to accept it from the channel's perspective."

"Considering scalability, channels have traditionally owned IP. As we proceed with original content production and strengthen cooperation with more creative groups, we felt the need for a structure that can coexist. Through this contest, the channel bears 100% of the production costs, but jointly owns the IP and makes decisions with the production companies regarding overseas format sales and shares profits. Since the channel operates the channel, it takes advertising revenue, but we proposed sharing about 20% of distribution revenue and overseas sales. Production companies responded enthusiastically. Many participated in the contest, and we plan to produce three of them."

CEO Kim Hyuk was confident that this would be a way to foster a sense of ownership together. "Korea is a content powerhouse with many creators who have good ideas and capabilities. OTT content produced for the global market is increasing and its quality is improving. However, there is a limitation that creators cannot benefit when succeeding overseas. Many have expressed regret about handing over aspects such as producing season 2 after a work's success or additional commerce or IP-based businesses to platforms. We hope this will be another option by encouraging investment on equal footing and sharing generated profits."

Looking at the production costs of recently introduced content, all are in the billions of won. CEO Kim said, "The atmosphere is that content production costs are increasing to an unbearable level. When the scale grows, collaboration becomes inevitable." He continued, "Collaboration should be made in a way that creates synergy with IPTV VOD, OTT, etc. This is also something SK Telecom is promoting, and while we share the same vision, we are at a stage where we have not created specific details. I expect a positive conclusion in the first half of next year."

He also left open the possibility of cooperation with the affiliated domestic OTT Wave. CEO Kim said, "The MZ generation mainly accesses content in OTT form. Considering that, we are discussing bundling (broadcast content) into Wave's live channel. We are supplying Kakao content, but since they own the KakaoTV platform, related negotiations are necessary. Once negotiations are complete, we plan to supply content to Wave as soon as possible," adding, "Channel S content will be available on various digital platforms."

Channel S has mainly broadcast variety programs. When asked about drama production plans, CEO Kim replied, "I think we still lack drama production capabilities." He added, "Wave is building a drama-centered lineup. I participate in meetings every other week to secure content through joint planning and investment. If we secure content that can be independent later, we are considering separating it."

Photo = Media S

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