[K-Content Era] Targeting the Second Ojingeo Game... Production Investment Competition Heats Up

Korean Works Stay Over 10 Weeks in Netflix Global Top 10
Get Married, Cha Cha Cha, Alchemy of Souls, Yeonmo, etc.

IP Competition Heats Up with Continued Pre-Sales
Netflix and Other OTT Giants Explore Investments
Competition for Mergers and Acquisitions Among Small and Medium Producers

Over the past year, numerous works, including Netflix Korean series, have been included in the global top 10 of Netflix TV shows. Photo by the drama 'Gaetmaeul Chachacha'

[Asia Economy Reporter Cha Min-young] Leading the global trend in K-content is "Squid Game," which won six Emmy Awards, known as the "Oscars of the broadcasting world." Not only large blockbuster-type works set in zombie or third-world settings but also dramas and films imbued with Korean sensibilities are gaining attention, bringing big smiles to domestic production investment companies.

According to the industry on the 15th, over the past year, many works have been included in the global top 10 Netflix TV shows, including the Netflix Korean series Squid Game, "All of Us Are Dead," "Hellbound," "Suriname," "Juvenile Justice," and "Money Heist: Korea ? Joint Economic Area." In addition, Korean-themed works such as "Extraordinary Attorney Woo," "Hometown Cha-Cha-Cha," "The King's Affection," "Our Blues," and "My Liberation Notes" also ranked within the top positions.

The reason global viewers are enthusiastic about Korean content is that universal emotions underlie the works. Adam Steinman, Vice President of Warner Bros., said, "Korean content deals with realistically possible issues such as family, people, social problems, healthcare, and dementia through entertainment and dramas," adding, "Thanks to this, it seems to resonate worldwide."

As the popularity of K-content rises, those who have invested in production have also benefited. SkyTV, the operator of the ENA channel that invested in the drama Extraordinary Attorney Woo, recorded advertising revenue of 15.3 billion KRW in the second quarter, achieving the highest quarterly revenue ever. This was thanks to the increased advertising rates following the drama's word-of-mouth success. SkyTV plans to raise the ENA channel brand value to around 1 trillion KRW by 2025. Production company AStory is also generating additional revenue by presenting the Naver Webtoon version of Extraordinary Attorney Woo using intellectual property (IP) in a one-source multi-use (OSMU) approach.

Drama 'Hwanhon'

As the formula "OTT competitiveness = original works" became official, competition for IP within the OTT industry has intensified. Content Wave, the operator of the domestic OTT "Wavve," has also established Studio Wave under its umbrella and is directly presenting original works. An industry insider said, "Because competition in the industry has become so fierce, a huge amount of funds is being invested in this area. While it is burdensome, I think it is a positive thing that Korean content is gaining recognition for its competitiveness and moving forward."

The behind-the-scenes competition to secure the IP of popular dramas and films first has also become fierce. The "International Broadcasting Video Market," once considered a gateway for domestic video sales, has rather faded as OTTs compete fiercely for IP. A representative from an overseas business team of a production company hinted, "Now, popular works are first sought out by global OTTs, who sign exclusive contracts, so Netflix doesn't even show up at these events. Apart from bundled sales of older IPs, there aren't many cases of selling new IPs."

Drama 'Sanae Matseon'

The changes that started with OTT have also triggered a chain reaction in the production industry. The method of mergers and acquisitions (M&A) of small and medium-sized production companies is becoming common. It is effective because it allows transferring writers and PDs affiliated with the production company all at once despite huge investments. Studio Dragon, affiliated with CJ ENM, is a representative case that has grown by acquiring small and medium-sized drama production companies since its inception. Imageneus, led by Choi Jin-hee, the first CEO of Studio Dragon, is also expected to adopt a similar strategy. Imageneus secured 50 billion KRW in investment from J&PE in June. Studio LuluLala JoongAng (formerly JTBC Studio·SLL) also has more than 10 production companies under its umbrella.