[Asia Economy Reporter Myunghwan Lee] Nasmedia is recently bucking the downward trend in the weak market. This comes as Netflix, the global No. 1 online video service (OTT), announced plans to launch a subscription plan that includes advertisements. Securities firms unanimously expect that Nasmedia, a media rep company that handles ad sales, will benefit from this.
According to the Korea Exchange on the 12th, Nasmedia closed trading at 29,400 KRW, up 8.29% (2,250 KRW) from the previous trading day. On the 11th, the domestic stock market showed weakness and closed down 8.12%, but Nasmedia recovered all losses in just one day.
Nasmedia's recent stock price trend shows an opposite movement to the stock index. While the domestic stock market has been hitting new lows daily over the past month due to the strong dollar and recession concerns, Nasmedia has shown a rebound. Nasmedia's stock price rose 4.63% over the past month (September 8 to October 12). Compared to the KOSPI's 7.29% decline during the same period, this is a remarkable increase. Nasmedia also rose more than 3% on the 30th of last month, when the KOSPI hit a new yearly low, settling in the 32,000 KRW range. Compared to the low point of 21,650 KRW on July 4, the lowest in the past six months, it has risen 35.80%.
The background of this reversal is the news of Netflix introducing an ad-supported subscription plan. According to major foreign media reports, Netflix plans to launch an ad-supported subscription plan as early as November, which lowers the subscription fee but displays ads before content playback. Industry sources say Netflix has already held explanatory sessions related to ad products domestically.
User preference for the ad-supported plan also appears to be high. According to a survey conducted by the Korea Press Foundation of 1,000 citizens on whether they would use Netflix if it launched an ad-supported plan, 72.2% of respondents said they would be willing to use it. Among them, 3.3% said they would definitely use the ad-supported plan, and 68.9% said they would decide based on conditions such as ad volume and subscription fees.
Accordingly, the dominant outlook is that media rep companies like Nasmedia will benefit. Media rep companies act as intermediaries between media outlets such as TV and advertisers to handle ad sales. Netflix is reportedly currently selecting advertising partners, including media rep companies.
The securities industry expects that if the global OTT giant Netflix introduces ads, Nasmedia's handled volume will increase. KB Securities researcher Yonghyun Choi said, "Nasmedia is expected to experience high growth as a new front market opens, so the current valuation level is considered undervalued," adding, "I recommend Nasmedia as the top stock in the advertising industry."
Experts also forecast that Nasmedia's performance will grow as the OTT advertising market opens up. Eugene Investment & Securities researcher Jongseon Park said, "The platform business segment has recovered from negative growth in 2020 and turned to an 11.2% sales increase last year, and double-digit sales growth compared to the previous year is expected to continue this year," adding, "The OTT advertising market is expected to be fully formed in 2023, which will contribute to Nasmedia's performance growth."
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