Studio Dragon's 'Crash Landing on You' Effect Hits Hard

Stock Price Rises Over 13% Within Two Months After Drama Airing... Major Blockbuster Lineup Also Prepared for This Year

A scene from the drama 'Crash Landing on You' (Photo by Asia Economy DB)

[Asia Economy Reporter Kum Boryeong] Studio Dragon's stock, which showed disappointment after last year's drama 'Arthdal Chronicles,' is aiming for an upward opportunity this year with the popular drama 'Crash Landing on You.'

According to the Korea Exchange on the 14th, Studio Dragon's closing price the previous day was 86,000 KRW. The stock price, which was 75,700 KRW on December 10 last year, rose starting December 14 when 'Crash Landing on You' began airing on tvN. The stock increased by about 13.61% within approximately two months after the broadcast of 'Crash Landing on You.'

Studio Dragon left much to be desired last year. The slump prolonged after 'Arthdal Chronicles,' a production with an investment of over 50 billion KRW, did not perform as well as expected. The highest viewership rating of 'Arthdal Chronicles' was in the 7% range. The low ratings led to a decrease in domestic video-on-demand (VOD) sales. Domestic distribution sales showed the lowest level since the first quarter of 2018. The fourth quarter results last year recorded sales of 97.4 billion KRW and an operating loss of 4 billion KRW. Sales decreased by 4% compared to the previous year, and operating profit turned into a deficit.

This year, the situation has changed. 'Crash Landing on You' surpassed a 17% viewership rating, following the successful path of hits like 'Goblin' and 'Mr. Sunshine.' Sales related to 'Crash Landing on You' are expected to be reflected in the first quarter, leading to a rise in stock price.

A lineup of major productions awaits in the future. In the first half of the year, there are dramas such as 'The King' starring Lee Minho and 'It's Okay to Not Be Okay' featuring Kim Soo-hyun, and in the second half, 'Record of Youth' starring Park Bogum is scheduled. Additionally, 'Memorist' and 'Stranger 2' are planned. Hong Sejong, a researcher at Shinhan Financial Investment, analyzed, "If 'The King' by writer Kim Eun-sook is scheduled, domestic and international copyright sales will be maximized, aiming for profits around 20 billion KRW for the first time since the third quarter of 2018."

They are also accelerating preparations to become a global player, reportedly starting co-production of dramas with the U.S. HBO. Since they have formed a strategic partnership with Netflix, it is expected to be easier to establish a foothold in the U.S. market. Expectations for the lifting of the 'Hanhanryeong (Korean Wave ban)' still remain. Lee Kihoon, a researcher at Hana Financial Investment, explained, "Assuming that eight Netflix pre-sold works by Studio Dragon can be sold to China, easing of the Hanhanryeong would soon turn sales to China into operating profit."