[K Changers]⑫ Ace Story on the Verge of a Big Hit as the 'American Version of Woo Young-woo'

Season 2 Confirmed and US Remake Imminent
Partnering with KT's ENA to Secure IP Rights
Ongoing Efforts to Secure the 'Second Woo Young-woo'

Recently, news that the production of season 2 of 'Extraordinary Attorney Woo (Woo Young-woo)' has been virtually confirmed became a hot topic. Writer Moon Ji-won signed a contract with AStory to write season 2 following season 1. Although there is still a long way to go, such as casting, the fact that the first step has been taken has attracted the attention of K-drama fans.

The Strange Lawyer Woo Young-woo, who gained sensational popularity last year. (Photo by Ace Story)

Woo Young-woo was at the center of the K-drama craze last year. It ranked first in non-English TV series viewing hours on Netflix for 9 consecutive weeks. This is the highest record in K-drama history, matching the number of weeks 'Squid Game' held the top spot. ENA, which aired Woo Young-woo in real-time, also hit a jackpot. The viewership rating started at 0.9% for episode 1 and ended with a finale rating of 17.5%. It is a 'national drama'-level syndrome rarely seen these days.

The production company behind Woo Young-woo is AStory. Riding on Woo Young-woo's overwhelming success, it posted its best-ever performance last year. Sales reached 71.6 billion KRW, and operating profit was 8.4 billion KRW. The company, which had fallen after the box office failure of 'Jirisan' two years ago despite investing about 30 billion KRW in production costs, made a dramatic turnaround. In 2020, it recorded sales of 22 billion KRW and an operating loss of 800 million KRW. However, AStory turned a profit in 2021 (sales of 58.8 billion KRW and operating profit of 6.9 billion KRW) and succeeded in 'scaling up' last year.

The outlook is also bright. Sojung Lee, a researcher at Sangsangin Securities, said, "In 2023, through the production of 4 to 5 dramas, sales are expected to reach 105.5 billion KRW and operating profit 14.8 billion KRW," adding, "The number and scale of drama productions will continue to expand based on references such as Kingdom and Woo Young-woo." Sales in the four-digit billion KRW range is a 'dream sales' figure for a small to medium-sized production company, not a large corporation affiliate. According to the 2022 Video White Paper, among 732 independent broadcasting video production companies, only 4 companies had sales exceeding 100 billion KRW. Meanwhile, 659 companies (90%) had sales below 10 billion KRW.

A Path to Show Talent and Make Money

In the past, foreign media such as Bloomberg reported that Squid Game generated more than 1 trillion KRW in revenue, about 40 times its production cost (approximately 25 billion KRW). However, the profit left to the Squid Game production company was less than 10 billion KRW. This is because it was produced as a 'Netflix Original' series, where Netflix fully funds the production costs but owns the intellectual property (IP). Netflix exclusively holds all rights to create additional value from Squid Game, including remakes, royalties for the work, game services, merchandise, product placement (PPL), and original soundtracks (OST).

Woo Young-woo was different. From the production company's perspective, Netflix Originals are a way to recover production costs and reliably earn a margin of several tens of percent, but AStory chose a different path to secure the IP. Woo Young-woo only sold broadcasting rights. Overseas rights went to Netflix, and domestic rights to ENA, a channel under KT. ENA invested in production costs but accepted the condition that AStory would retain the IP. This was a groundbreaking deal, unlike the usual transactions where the broadcasting company that invests in production costs owns the IP. As a result, AStory became the first small to medium-sized production company to secure the IP of a globally successful drama. ENA also recorded a 67% growth last year with sales of 110 billion KRW, smiling broadly.

'Second Jackpot' Ahead with Remakes

Han Se-min, President (CSO) leading negotiations for the 'American version of Woo Young-woo'. (Photo by Ace Story)

Woo Young-woo is on the verge of a 'second jackpot' through remakes. Due to confidentiality clauses, details cannot yet be disclosed, but a local co-production with a U.S. company has been agreed upon. The broad framework has been finalized, and detailed terms are being negotiated. If the contract is completed within this year, production of the 'American version of Woo Young-woo' will begin. Remakes typically receive a certain portion of production costs as royalties. In addition, since AStory will directly participate in production locally, additional revenue based on the work's sales will be generated.

Discussions for remakes are underway not only in the U.S. but also in more than 10 countries including Japan and Europe. AStory plans to sequentially sign contracts with companies in other countries once the U.S. deal is finalized. Han Se-min, CEO (CSO) and former SM Entertainment executive, is leading overseas business. He led overseas business at SM for 17 years, laying the foundation for global expansion. He possesses proficient English skills and a network in the overseas entertainment industry. Additionally, Woo Young-woo has expanded into Naver Webtoon and is negotiating with EMK Musical Company for a musical performance. Merchandise such as mugs is also very popular. Considering the upcoming season 2, it is expected that the Woo Young-woo IP will generate profits exceeding 200 billion KRW, more than 10 times the production cost.

Steady Efforts to Create a 'Second Woo Young-woo'

AStory is continuously making efforts to discover new writers to create a 'second Woo Young-woo.' After all, it is the writers who create IP. In partnership with the Korea Creative Content Agency, they hold an annual debut contest for new writers. Writers selected through the contest receive support for debut through 8 months of mentoring and lectures from active writers, directors, and PDs. For example, writer Won Yoo-jung, discovered through this program, is currently writing 'Flowers Bloom Even in Sand,' which AStory is producing as a drama. This year's contest schedule will start next month.

Lee Sang-baek, CEO of AStory, said, "Since establishing the drama production company, we have continuously strived to secure IP, and starting with 'Cinderella's Sister' and 'The Miracle We Met,' we have developed IP businesses in various ways." For example, the company is working on Japanese and Chinese remakes of the drama 'Signal' and game adaptations of the Netflix Original 'Kingdom.' Based on these past experiences, 'Extraordinary Attorney Woo' is continuously reborn as a webtoon, musical, and overseas drama, meeting new consumers.