[K Changers]⑩ CJ ENM Creating the K-Content Ecosystem

Providing Stages for K-pop Artists through Convention Business
Discovering Numerous Original IPs via Audition Programs
"Becoming a Global IP House" as the Vision

Last month, the ‘KCON Japan 2023’ event attracted a crowd of 123,000 people. It was the largest scale since KCON was first held in 2012. Japanese attendees at the venue experienced Korean products such as ramen during the day and immersed themselves in Korean culture by watching artists’ performances in the evening.

The company organizing KCON is CJ ENM. It is a company that practices CJ Group’s philosophy of ‘Cultural Patriotism (文化保國),’ which means ‘Without culture, there is no country.’ CJ ENM is creating an ecosystem at the forefront of K-content. While continuously running so-called ‘K-convention’ businesses such as KCON and the ‘MAMA Awards,’ it is also constructing CJ LiveCity, Korea’s first K-pop dedicated performance venue. Mnet’s audition programs have served as a ‘fountain of youth’ for K-pop. Singers produced through these programs are actively working both domestically and internationally.

CJ ENM posted sales of 4.7922 trillion KRW and an operating profit of 137.3 billion KRW last year. It is a content company operating in music, commerce, film and drama, and media sectors. The music division recorded sales of 585 billion KRW last year, growing more than fivefold compared to 110.8 billion KRW in 2018. Overseas sales accounted for 202.5 billion KRW, or 34.6%, of this amount. CJ ENM has built a ‘value chain’ encompassing intellectual property (IP) planning, platforms, and management. This is called the IP ecosystem expansion system (Music Creative ecoSystem·MCS). The company is advancing toward the vision of becoming a ‘global IP house.’

Planting a Flag in a Barren Land

KCON, which plays a leading role in spreading K-content, is the culmination of CJ ENM’s unique know-how. KCON is a festival where people can enjoy a country’s culture centered on music content (performances). During the period when KCON is held, the entire area is dyed in Korean culture. For this year’s event in Japan, 259 convention booths were set up, including K-pop, K-food, K-lifestyle, K-beauty, and K-fashion. Many companies hoping to enter the Japanese market participated.

Of course, the core is the performances. KCON is a global stage where K-pop artists can showcase their talents. It was especially an opportunity for small and medium-sized agencies to promote their artists. RM, leader of BTS, who performed on the LA KCON stage in 2014, said, “It was the first time performing in front of such a large audience,” and “I think it was the starting point for gaining American fans.” At that time, BTS was a rookie group in their second year since debut, and their agency was also small in scale.

KCON started in 2012 in California, USA. It was the time when K-pop was just beginning to rise, with ‘Gangnam Style’ becoming a hit. Over the past 11 years, it has attracted 1.486 million spectators in 12 cities worldwide, including the Middle East, Europe, Latin America, and Oceania. Kim Hyun-soo, head of the Convention Live Business Division at CJ ENM’s Music Content Headquarters, said, “We have identified rapidly changing Hallyu market trends and reflected them in KCON to present differentiated content,” adding, “By continuously facilitating communication between global K-pop fans and artists, we have established KCON as an irreplaceable global number one K-culture festival.”

Another flagship of the convention business is the MAMA Awards. Starting in 1999 as the Mnet Video Music Awards, the ceremony has grown alongside the domestic music industry. It has expanded its venues to various locations such as Macau, Singapore, Hong Kong, Vietnam, and Japan, showcasing spectacular stages and grand scale. Collaborations with global artists have always been a hot topic. The 2011 Singapore stage, which invited American hip-hop legends Snoop Dogg and Dr. Dre, is still talked about.

The planning expertise accumulated over more than 20 years is also reflected in performance results. Last year, sales generated from performances and convention businesses amounted to 122.4 billion KRW. CJ ENM also acts as a performance agent for artists from other companies, trusted for its capabilities. It has handled BTS concerts and managed the world tour of ATEEZ and the nationwide tour of Lim Young-woong last year.

‘K-pop Fountain of Youth’ That Sowed the Seeds

CJ ENM’s broadcasting platform Mnet can be called a ‘K-pop fountain of youth.’ It has produced numerous artists active domestically and internationally through audition programs such as ‘Superstar K,’ ‘Show Me the Money,’ and ‘Boys Planet.’ Representative examples include Jang Won-young and Ahn Yu-jin of IVE, and Kim Chae-won and Sakura of LE SSERAFIM. They are the leaders of the so-called ‘4th generation idols.’ Solo singers who have established their positions, such as Chungha, Kang Daniel, Lee Chae-yeon, Kwon Eun-bi, Jo Yu-ri, and Choi Ye-na, also all come from audition programs.

Until a few years ago, CJ ENM hardly had its own artists. Currently, it is focusing on ‘IP development’ and increasing its roster of artists. The core is audition programs and the subsidiary label ‘Wake One.’ Wake One was formed by merging four existing labels. Artists from audition programs such as Jo Yu-ri, TO1, Kep1er, and Zerobaseone are affiliated with this company.

Various collaborations are also underway to expand IP. Partnering with Japanese company Lapone Entertainment, CJ ENM debuted groups ‘JO1’ and ‘INI.’ These groups were produced through Korea-Japan joint audition programs. ‘ENHYPEN,’ debuted through the joint label ‘Belift Lab’ with HYBE, also originated from CJ ENM audition programs. ENHYPEN recently increased its popularity by recording first-week sales of 1.32 million copies for their newly released mini-album.

The most focused IP currently is Zerobaseone. It is a team preparing to debut through CJ ENM’s recent audition program ‘Boys Planet.’ The final vote during the audition attracted 9.4 million votes from 184 countries, making it a hot topic. The team surpassed 1 million Instagram followers within six days of opening their account, rapidly expanding their fandom. Zerobaseone is the core of CJ ENM’s dream of a ‘global IP house.’

At the ‘Q4 2022 Earnings Conference Call,’ Koo Chang-geun, CEO of CJ ENM, stated, “We will continue to expand our music business domestically and internationally through Mnet’s MCS-based content, which other companies do not have,” adding, “In the mid to long term, we aim to strengthen our market position in the music business by developing additional IPs that appeal to musical authenticity across genres, not just idols. We will further advance CJ ENM’s music ecosystem by enhancing our online K-pop culture platform Mnet Plus and offline platforms KCON and MAMA AWARDS.”