The Future of CJ ENM Presented by CEO Gu Chang-geun: "Crisis is Opportunity"

Gu Chang-geun, CEO of CJ ENM, Holds Town Hall Meeting with Employees
Lack of Proactive Competition Response for IP Acquisition, Focus on Overseas Markets

Gu Chang-geun, CEO of CJ ENM Entertainment Division (50·photo), is known within the group as an alchemist who turns 'crisis' into 'opportunity.' He stepped in as a savior for CJ Foodville, which was on the brink of capital erosion, and improved profitability within a year. Then, he moved to CJ Olive Young to establish a sustainable growth strategy. Now, it is CJ ENM's turn. Since his appointment in October last year, CEO Gu has coldly analyzed the company's current situation and presented a direction. The future he envisions for CJ ENM is a 'Global Intellectual Property (IP) Powerhouse.' The 'IP Powerhouse' means strengthening 'IP holding.'

The Meaning of 'IP Powerhouse'

At a town hall meeting held on the 22nd for employees, CEO Gu said, "We have not been able to respond quickly to global trends." He judged that CJ ENM is falling behind in the competition to secure IP in a media industry environment where borders between countries and industries have disappeared. CEO Gu diagnosed that sustainable growth has become difficult due to stagnation in the broadcast advertising market, competitive disadvantages of the TVING platform, and external sales of IP. As media consumption habits rapidly change, the global media industry is moving around global Over-The-Top (OTT) service providers. The proportion of Netflix original IP has increased, and last year, based on domestic dramas, the number of IPs owned by Netflix surpassed the number of IPs owned by CJ ENM. CJ ENM recorded an operating profit of 137.4 billion KRW on a consolidated basis last year, a 53.7% decrease from the previous year.

CEO Gu explained, "We need to produce content that can appeal globally," adding, "We must make efforts to retain IPs that can generate additional revenue through licensing and can be utilized 360 degrees, rather than selling them to others." This means that while creating content, they must attract users through their content platform and monetize it. CEO Gu said, "A sustainable business model must be created to generate growth opportunities." CJ ENM will build a content production system and creator ecosystem with global competitiveness. It will enhance TVING customers' convenience and refine marketing strategies to secure the No. 1 position in the domestic OTT market.

CJ ENM has sufficient potential to stand tall in the global market. On the 22nd, six K-content titles ranked in Netflix's 'Weekly Top 10 Non-English Series' chart. Four of these were planned and produced by CJ ENM. The outstanding competitiveness of K-content production in the global market is clear. It also means that opportunities for monetization can be found in the global market. CEO Gu pointed out, "There are growth opportunities as a platform operator," adding, "If TVING's platform capabilities are enhanced and it settles in overseas markets, revenue can increase."

Changes in Work Methods and Intensive Structural Reform

To make the organization more agile, CEO Gu reorganized it. The structure was changed from nine divisions to five divisions. The director-level position was abolished, and the decision-making process was simplified to 'team leader - business division head - division head.' Regarding the reorganization, CEO Gu emphasized that it was a painful but inevitable choice for survival. He said, "Ten years ago, CJ Chairman Lee Jae-hyun stated, 'I am confident that the media content industry will become a new national key industry following shipbuilding, semiconductors, and automobiles,'" adding, "It actually happened, and we were the first to discover that opportunity." He continued, "For us, this is the last remaining opportunity, and there is not much time left before that door closes," adding, "At this point, we need to reset our strategic direction and redefine 'what needs to be done' and 'each person's role.' He also said, "If a support system that transparently shares information and enables quick decision-making is established, there should be attempts to break the mold a little more," adding, "There may be failures, but if there is a process of accumulating 'lessons,' it will be accumulated as capabilities within our organization."

CEO Gu graduated from Seoul National University with a degree in economics and worked as an analyst in the distribution sector in securities for over 10 years. After moving to CJ Group in 2010, he served as planning team leader and head of Strategy Office 1 at the holding company CJ. He was CEO of CJ Foodville in 2017 and CEO of CJ Olive Networks' Olive Young division in 2018.