On the 30th of last month, Jcontentree rose 7.96%, showing an upward trend... Web drama D.P. success impact
Studio Dragon relatively quiet
Disney Plus to launch in Korea this November... Drama producers with expanding sales channels
[Asia Economy Reporter Gong Byung-sun] The stock prices of domestic drama production companies are being influenced by their performance on online video streaming services (OTT). Securities analysts predict that the future entry of global OTT platforms into the domestic market will serve as an upward momentum for Korean drama production companies.
As of 9:27 a.m. on the 1st, Jcontentree recorded a price of 42,600 KRW, up 1.67% (700 KRW) from the previous day. It has shown a sharp upward trend recently, including a 7.96% increase on the 30th of last month. Competitor Studio Dragon's stock price has been relatively stable. At the same time on the same day, it rose by 1.26%, but did not show as much growth as Jcontentree. Since the 24th of last month, its fluctuations have remained within about 1%.
The reason behind Jcontentree's rise is its content. The web drama "D.P.," released on the OTT platform Netflix on the 27th of last month, has become a hot topic, ranking first in domestic content popularity. The timing coincided with recent incidents of sexual assault within the military, drawing even more attention.
On the other hand, Studio Dragon has not released any recent hit works. Thanks to the success of the web drama "Sweet Home," released on Netflix last year, it rose to 9th place in the KOSDAQ market capitalization rankings in the first half of this year, but has not generated significant impact since then.
As such, drama production companies are being influenced by their success on OTT platforms. In fact, their revenue structures are increasingly relying on OTT. For Studio Dragon, sales related to OTT accounted for 54% of total sales in the first quarter of this year, increasing to about 64% in the second quarter. Similarly, Jcontentree's distribution sales related to OTT in the broadcasting sector rose from 60% in the first quarter to 64% in the second quarter.
The growing influence of OTT is because it guarantees stable profits for drama production companies. Securities firms estimate that the margin on production costs for the Netflix original drama D.P., which must be aired exclusively on Netflix, exceeds 15%. In contrast, broadcasters must consider time and costs, so they cannot schedule as many broadcasts as drama producers want. Lee Ki-hoon, a researcher at Hana Financial Investment, explained, "Due to recent cost-efficiency measures by major broadcasters, drama production companies' scheduling has been delayed."
Global OTT platforms set to enter the market in the future are also positive factors for drama production companies. Disney's OTT platform Disney+ is officially set to enter Korea in November, which is expected to intensify competition in the domestic OTT market. Shin Soo-yeon, a researcher at Shin Young Securities, said, "From Disney+'s perspective, which aims at the domestic market, Korean drama content is necessary," adding, "For drama production companies like Jcontentree and Studio Dragon, this means more sales channels."
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