Chorokbaem Media Invests in Entotech: "Expanding Drama Production Network, Responding to OTT Demand Increase"

[Asia Economy Reporter Yoo Hyun-seok] Chorokbaem Media is expanding its drama production network by utilizing its cash reserves. The strategy is to pool the capabilities of production companies to target K-drama exports in response to the explosive demand for content from global online video services (OTT).

Chorokbaem Media (hereafter Chorokbaem) announced on the 12th that it invested in the 15th series of 10 billion KRW unnamed private convertible bonds issued by N2Tech for operational funds. This investment aims to create synergy with Ace Factory, an entertainment management and drama production company merged by N2Tech last year.

Actors such as Kim Ah-joong and Lee Si-young, totaling 39, belong to Ace Factory, a business division of N2Tech. They produced works including ‘Confession’ and ‘Birthday Letter’ in 2019, and ‘When the Weather Is Fine’ and ‘Stranger’ in 2020. Following a 16 billion KRW drama production contract with Arc Media in June, N2Tech signed a 14.4 billion KRW drama production contract for ‘Insider’ with JTBC on the 1st, achieving a total of 30 billion KRW in drama production contracts within two months.

Chorokbaem plans to build an alliance with domestic listed drama production companies starting with its investment in N2Tech. Recently, as OTT content supply has become active in the drama market, the importance of production capabilities that can produce a large volume of works has been highlighted.

A company official stated, “Global OTT platforms want various genres of content including dramas, movies, sitcoms, and animations. Chorokbaem plans to reduce content production risks and secure diverse and extensive global-oriented content not only through in-house production but also through joint planning and investment.” He added, “Due to the rapid increase in content market demand, production companies are attempting large-scale pre-production, and securing funds is key for pre-production. Chorokbaem has already secured over 100 billion KRW in funds, giving it an advantage.”

Chorokbaem currently holds 63 billion KRW in cash and separately owns assets worth about 100 billion KRW that can be quickly liquidated. On September 30, the largest shareholder, Chorokbaem Company, plans to make an additional investment through a 20 billion KRW paid-in capital increase. Leveraging this strong financial power, Chorokbaem plans to increase the proportion of pre-production in both in-house and joint productions.

Won Young-sik, Chairman of Chorokbaem Group, said, “In addition to N2Tech, we are discussing investments with several small and medium-sized entertainment agencies and drama production companies with which we can form partnerships. We plan to maximize synergy by utilizing cash reserves to strengthen intellectual property (IP) acquisition and content business.”