Content Stocks That Had a Warm Year-End... Expectations for Next Year's 'K-Content Battle'

Disney+, Apple TV+, HBO Max... OTT Accelerates Entry into Korea
Competition for K-Content Acquisition Rises... Expectation of Revenue Growth through Direct Overseas Expansion

[Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] Major content stocks closed the last week of the year on an upward trend in the stock market. This is interpreted as growing expectations as the competition for Korean content among domestic and international online video service (OTT) platforms is expected to intensify next year.

According to the Korea Exchange on the 31st, J Contentree rose 9.9% during this week (27th-30th), closing the year at 54,600 KRW. During the same period, SBS and Studio Dragon also rose by 7.5% and 2.9%, respectively. These returns outperformed the KOSPI and KOSDAQ returns (-1.15%, 2.64%, respectively) during the same period. The upward trend that began in late this month continued until the end of the year, marking a smooth finish to the year.

This reflects expectations that the value of Korean content will rise as competition intensifies, fueled by the global success of domestic content such as Squid Game and Hellbound on Netflix this year. At the end of the year, Disney Plus (+) and Apple’s Apple TV Plus entered the domestic market, signaling a 'content battle.' Additionally, the U.S. 'HBO Max (MAX),' which has secured 60 million subscribers worldwide, is preparing to enter the Korean market. It began hiring staff for its Korean branch at the end of October. It is expected to launch as early as the first half of next year.

Based on this popularity, content companies directly entering China and the U.S. are also expected to emerge next year. It is analyzed that as overseas sales begin in earnest, performance could improve significantly. In the case of Studio Dragon, having already entered the U.S. and Chinese markets first, its performance is expected to surge starting next year. According to financial information analysis firm FnGuide, Studio Dragon’s consensus forecast for next year is 606.9 billion KRW in sales and 80.7 billion KRW in operating profit. This represents increases of 24.4% and 33.4%, respectively, compared to this year’s estimates. Sales are expected to increase by about 80 billion KRW compared to last year’s record high of 525.7 billion KRW.

Kim Hoejae, a researcher at Daishin Securities, said, "As global OTTs enter Korea one after another, the country’s competition to secure content will enter a full-fledged 'fourth wave.' As competitiveness is proven domestically, cases of direct entry into China and the U.S. led by Studio Dragon will also increase," he predicted.