Sales of 949 Billion KRW, Operating Loss of 50.3 Billion KRW
Media Platform Hit Hard by Advertising Market Contraction
Commerce Improves Profitability with 'One Platform' Strategy
CJ ENM recorded an operating loss of 50.3 billion KRW in the first quarter of this year, turning to a deficit due to the contraction of the advertising market caused by the downturn in the entertainment business. Although the commerce business improved profitability through the 'One Platform Strategy,' the base effect from last year's poor performance also had an impact.
CJ ENM announced on the 4th that its consolidated operating loss for the first quarter of this year was 50.3 billion KRW, turning to a deficit compared to the previous year. Sales during the same period increased by 0.9% to 949 billion KRW.
The media platform recorded an operating loss of 34.3 billion KRW in the first quarter. Sales were 277.9 billion KRW, down 16.6% from the previous year. CJ ENM explained that sales were directly hit by the seasonal off-season and the contraction of the advertising market. Although production costs increased due to content expansion, operating losses also grew as the profit contribution from the advertising sector decreased.
The film and drama division recorded an operating loss of 40.7 billion KRW. Sales increased by 9.2% year-on-year to 236.1 billion KRW. Sales rose as premium intellectual properties (IP) such as the drama "Island" and the variety show "Seojin's Family" were actively distributed overseas, but operating losses expanded due to poor performance of films like "Ghost" and "Count," according to analysis.
The music division posted an operating profit of 8.1 billion KRW, down 43.2% from the previous year. Sales increased by 31.2% to 119 billion KRW. Live sales expanded significantly through events like "KCON 2023 Thailand" and "Street Man Fighter," and music label achievements stood out with strong sales of Kepler's second Japanese single "Fly-By."
The commerce division improved to an operating profit of 17.5 billion KRW compared to the previous year. Sales also increased to 316.1 billion KRW. Profitability improved as the high-margin product portfolio, including health foods, travel, and fashion, expanded through the 'One Platform' strategy, which organically combines TV, e-commerce, and mobile live commerce.
CJ ENM plans to focus on improving profitability in the second quarter by ▲ securing platform competitiveness through expanded synergy between linear and OTT ▲ acquiring mega IPs and strengthening global partnerships ▲ expanding the music industry value chain. The media platform division will recover TV advertising sales and strengthen TVING’s growth based on content competitiveness, while the film and drama division will secure premium IPs targeting the global market and expand partnerships with global OTT platforms. The music division will focus on profitability recovery by emphasizing the global achievements of its own artists. The commerce division will continue the One Platform strategy framework and foster planned mobile live commerce.
CJ ENM stated, "We are focusing on strengthening business competitiveness and enhancing business sustainability through organizational restructuring and strategic direction realignment," adding, "From a mid- to long-term perspective, we will concentrate on strengthening profitability through securing strong content competitiveness, building advanced platforms, and diversifying premium IP distribution."
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