CJ ENM Entertainment Organizational Restructuring, Largest Since Inception
From 1 General Headquarters and 9 Business Divisions to 5 Core Business Divisions
[Asia Economy Reporter Lim Hye-seon] CJ ENM's Entertainment Division has carried out the largest organizational restructuring since its founding. This is the first reorganization since Gu Chang-geun was appointed as the head of CJ ENM's Entertainment Division (photo).
On the 9th, CJ ENM announced that it will reorganize its existing structure of one general division and nine business headquarters into five core business headquarters. The main point is to integrate overlapping functions and simplify the business system around core functions to increase productivity and efficiency. Accordingly, the structure was reorganized from the Content Solution General Division, Film and Drama Business Headquarters, Content Production Headquarters, Digital Content Business Headquarters, Intellectual Property (IP) Business Headquarters, Music Content Headquarters, Chief Growth Officer (CGO), Chief Operating Officer (COO), Media Solution Headquarters, and Digital Solution Headquarters into five headquarters: Film and Drama Business Headquarters, Entertainment and Culture Business Headquarters, Music Content Business Headquarters, Media Platform Business Headquarters, and Global Business Headquarters. The Content Solution (advertising management) organization was reorganized into the Advertising Business Division and integrated into the Media Platform Business Headquarters. The organization responsible for content IP distribution was separated into a distinct 'Content Distribution Business Division' apart from the five headquarters. Additionally, the organization responsible for overall overseas business was promoted to the 'Global Business Headquarters.' CJ ENM has strengthened its business capabilities in line with the increasing demand for K-content in overseas markets by establishing CJ ENM Studios, acquiring the U.S. production company 'Fifth Season' (formerly Endeavor Content), and partnering with Paramount+. The overseas sales ratio, which was 20% in 2021, increased to 37.3% in the third quarter of last year.
CJ ENM divided its media division, which was previously centered on broadcast content, and its film division, which focused on video content, based on the proportion of 'scripts (screenplay for screening).' Drama and film are handled by the 'Film and Drama Business Headquarters,' while entertainment and cultural content are managed by the 'Entertainment and Culture Business Headquarters.'
The decision-making system was also simplified. The previous director-level position was eliminated, and the structure was simplified into three levels: 'Business Headquarters Head - Business Division Head - Team Leader.' Small teams of 4-5 members were reorganized into larger team units. Kim Seung-hyun, head of CJ ENM's Digital Division, was appointed as CEO of Mezzomedia, CJ ENM's digital marketing solutions company. CEO Lee Seong-hak stepped down to become an advisor.
CEO Gu Chang-geun emphasized 'streamlining and normalization of the organization.' This is to respond quickly to rapidly changing internal and external environments and to strengthen sound management. Gu is regarded as an expert in restructuring and organizational reorganization. During his tenure at CJ Foodville, Gu withdrew Bibigo from the Southeast Asian market. In the case of Twosome Place, he prepared the groundwork for its sale through a physical spin-off. While CEO of CJ Olive Young, he wound down the struggling Chinese business. It is reported that Gu received a special mission from CJ Chairman Lee Jae-hyun to 'revive CJ ENM.' CJ ENM's Entertainment Division recorded an operating profit of 92.6 billion KRW from the first to third quarters last year, a 47% decrease compared to the same period the previous year. The media division, which accounts for 80% of the Entertainment Division's total sales, posted a loss of 14.1 billion KRW in the third quarter.
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