[Company Insight] Studio Mir Secures Own IP to Offer Diverse Content

Netflix's 'Lookism' Producer Studio Mir Challenges KOSDAQ Listing
Expanding IP Through Collaboration with Game and Webtoon Companies... Efforts to Secure Sustainable Content

[Asia Economy Reporter Minji Lee] As the status of K-content rises, the native animation production company ‘Studio Mir,’ which entered the North American market early and established its position, is preparing for an initial public offering (IPO). Studio Mir is an animation production company launched in October 2010. It is a comprehensive animation production company capable of production across all areas, including pre-production, main production, and post-production. Recently, it released ‘Lookism’ on the online video service (OTT) platform Netflix, which impressively ranked 8th in the global overall rankings.

Animation Studio Capable of Pre-Production

Studio Mir’s strength lies in its ability to handle pre-production. Pre-production refers to a production system responsible for all processes from planning to directing. While existing domestic animation studios have focused mainly on main production, which involves filming, Studio Mir covers the entire production process from pre-production to main production, as well as post-production, which includes recording and final editing.

Compared to films or dramas, animation has a higher entry barrier, so the threat from latecomers is relatively low. Films and dramas have a wide range of editing possibilities through actors’ performances and camera techniques, but animation requires drawing the same scene multiple times, making revisions and edits less flexible. This means that high-quality work must be achieved in a single production. Especially in terms of pre-production capabilities, it is difficult for domestic animation studios that have focused on main production to quickly improve in a short period.

A Studio Mir representative explained, “We have experts in key pre-production areas such as storyboarding, scripting, and character design. With the emergence of various channels including OTT, the ability to create stories and develop universes, like Marvel Studios or DC Comics, is becoming increasingly important in pre-production.”

The company’s representative works include ‘The Legend of Korra,’ ‘Boondeoks,’ ‘Dota: Dragon’s Blood,’ ‘Voltron: Legendary Defender,’ ‘The Witcher: Nightmare of the Wolf,’ and ‘Lookism.’ These works mainly succeeded on American OTT platforms or TV programs. General productions where the company participated only in main and post-production include ‘Harley Quinn,’ starring the DC Universe character Harley Quinn, and ‘Super Sons,’ featuring Batman.

With increasing production inquiries from global OTT platforms, sales are expected to continue improving. As of the third quarter, the company’s sales reached 19.6 billion KRW, an increase of about 5 billion KRW compared to last year’s annual sales of 14.4 billion KRW. During the same period, operating profit turned from a 1.9 billion KRW operating loss last year due to increased expenses to a 2.7 billion KRW surplus. Projected sales are expected to jump to 33.3 billion KRW next year and 41.8 billion KRW in 2024.

However, the emerging global economic downturn is a concerning factor. The content market is highly correlated with consumers’ spending capacity. The recently released December U.S. University of Michigan Consumer Sentiment Index was 59.1, significantly below last year’s 70.4 for the same month. The Federal Reserve’s aggressive tightening has reduced consumers’ spending power, and if household interest burdens worsen, the consumer sentiment index is expected to decline further.

In this situation, Studio Mir’s breakthrough strategy is to secure intellectual property (IP) through collaboration with other industries. The goal is to provide diverse content by acquiring IP through mergers and acquisitions (M&A) or equity investments with companies in other sectors such as gaming, webtoons, and web novels. Previously, the company purchased the ‘Kozy’ IP from author Alexander Snow and signed a comic book publishing contract with a North American publisher, followed by developing a feature-length animation. The company also plans to actively secure its own IP. Utilizing its U.S. local subsidiary, which mainly handles post-production, it will sign contracts with famous North American authors to acquire new IP. This will be used to create comprehensive content that extends from animation to webtoons.

A Significant Portion of Funds Raised Through IPO Allocated to IP Acquisition Budget

A significant portion of the funds raised through the IPO has been allocated to the IP acquisition budget. To collaborate with companies in other industries, 6.8 billion KRW has been assigned for acquiring securities of other corporations, and 5 billion KRW will be used for IP purchases and in-house development.

Studio Mir plans to offer a total of 1 million shares in the IPO, consisting of 800,000 newly issued shares and 200,000 existing shares sold by current shareholders. The demand forecast for institutional investors is scheduled for the 16th to 17th of next month, and individual subscription will take place on the 26th and 27th. The offering size is between 15.3 billion and 19.5 billion KRW, with a desired offering price range of 15,300 to 19,500 KRW per share. Mirae Asset Securities is the lead underwriter. For valuation, Pan Entertainment, Studio Dragon, and Ace Story were selected as comparable companies. The average price-to-earnings ratio (PER) of these three companies is 27.6 times, and applying a 20?38% discount to the comparable value per share (24,603 KRW) resulted in the desired offering price.