K-Content Learns the Language of Capital [K, to Hollywood]

Exclusive IP Demands and Revenue Sharing Ratios Pose Challenges
AI Technology Is Transforming the Investment Structure
Tangible Results Emerge: MOFAC Secures 6 Billion Won Investment

On-site at 'U-KNOCK 2025 in USA'

'U-KNOCK 2025 in USA,' jointly hosted by the Ministry of Culture, Sports and Tourism and the Korea Creative Content Agency, is more than just a venue for cultural exchange. It serves as a testing ground where the content industry is directly linked to finance.

Fifteen domestic companies, including The Pinkfong Company, MOFAC Studio, Studio Realive, MBC, and FunnyFlux, participated, while major local investors such as WIIP, CAA Media Finance, and Atwater Capital attended the event. They engaged in negotiations on practical investment structures, focusing on intellectual property (IP) and production technology.

According to the '2024 Content Industry Statistics' published by the Korea Creative Content Agency, Korea's export volume in 2023 reached $1.334 billion (approximately 1.9383 trillion won). Of this, the video and gaming sectors accounted for more than 40 percent. As export competitiveness has risen, content is increasingly being recognized as an investable industrial asset.

Reflecting this trend, U-KNOCK was designed as an "investment-validated IR (Investor Relations) event." Companies focused their pitches not on introducing works, but on marketability, IP revenue structures, and exit scenarios. Paul Lee, CEO of WIIP, emphasized, "The goal is not just co-production, but genuine co-creation."

Tensions Over IP Control

Studio W BABA, a participant in U-KNOCK, presented a project financing (PF) strategy for 'Robot Doctor Theo' during a one-on-one meeting with investors. CEO Park Inchan explained, "The typical investment model delays the production company's profit recovery until after distribution," adding, "PF allows for a clearly designed structure of phased investment, production, and profit distribution."

He further stated, "The main revenue streams are from broadcasting the main animation, selling OTT rights, expanding the IP into toys, publishing, and audiobooks, as well as licensing programs in collaboration with global STEAM (Science, Technology, Engineering, Arts, Mathematics) education institutions and local governments." He added, "We have structured our portfolio with the goal of reaching break-even (BEP) through overseas distribution within three years."

The issue lies in IP control. In reality, it is difficult for Korean companies to secure a favorable position. A local industry insider, who requested anonymity, commented, "The demand for IP control by overseas investors is not a matter of individual negotiations, but rather a structural characteristic of the Hollywood business model."

On-site at 'U-KNOCK 2025 in USA'

CEO Park said, "The greatest burden comes from demands for exclusive IP rights and the profit-sharing ratio. Some OTT platforms or distributors propose global exclusive streaming conditions, which can limit secondary business expansions such as toys and publishing." He added, "During negotiations, we respond by adjusting to 'territory-limited exclusivity' or 'non-exclusivity by segment' to protect the long-term scalability of the IP."

A representative from a major U.S. investment firm commented on animation investment, saying, "Production typically takes three to five years. Because the investment is tied up for so long, profitability declines." However, he added, "If the production period can be shortened, it could become viable." He emphasized, "If AI technology can reduce production time by 25 to 30 percent, that would not be just a technological innovation, but a game-changer that transforms the investment structure itself."

Signs of Change: MOFAC Raises 6 Billion Won Investment

Concrete results have begun to emerge amid these developments. MOFAC Studio recently secured an investment of approximately 6 billion won from Altos Ventures.

This achievement did not occur at the U-KNOCK event itself. However, it is notable as it demonstrates that global capital’s interest in Korean content companies is translating into actual investment. As government-led IR events act as a catalyst, Korean companies with technological prowess are beginning to achieve tangible results in the investment market.

MOFAC Studio’s founder and CEO, Jang Sungho, is a first-generation visual effects (VFX) expert in Korea. He was responsible for CG work in films such as 'Haeundae,' 'The Admiral: Roaring Currents,' and 'Sweet Home.' On April 10, he unveiled the feature-length animation 'King of Kings,' which he planned and produced over more than a decade. The film, inspired by a novel by the renowned British author Charles Dickens about the life of Jesus, was released in North America and recorded cumulative box office revenue of about 27.2 billion won ($19.1 million). It surpassed the record set by 'The Prince of Egypt' 27 years ago in the biblical animation genre. The film also received the highest CinemaScore grade of 'A+' from North American audiences, earning critical acclaim. In Korea, as of its fifth week of release, it ranked as the second highest-grossing Korean animated film in history.

It is extremely rare for an external studio to break into the North American feature animation market, which is dominated by Hollywood’s Big Five (Disney, Pixar, Sony, DreamWorks, Illumination). 'King of Kings' even secured additional screenings at the Kennedy Center in Washington, D.C.-a symbolic venue for conservatism and culture-marking an unprecedented case of a Korean small-to-mid-sized studio entering the American mainstream.

MOFAC Studio’s strength lies in its technological capabilities. By integrating Unreal Engine, which was developed in the gaming industry, into its film production pipeline, the studio has established a production environment that allows for real-time simulation and review. This has enabled cost and time savings while enhancing quality. Even major Hollywood studios have yet to fully implement such innovations, highlighting MOFAC’s pioneering role.

An Altos Ventures representative praised, "Korea is a globally competitive market in content production and planning. MOFAC Studio has built its growth strategy on technological innovation, a global IP approach, and proven box office potential in North America."

On-site at 'U-KNOCK 2025 in USA'

CEO Jang Sungho stated, "With this investment, we plan to expand the planning and production of our next feature-length animation. We will strengthen R&D based on AI and virtual production, and accelerate the expansion of our global distribution network, focusing on North America."

Government: From Subsidies to Investment

The government is also reforming its support methods. Moving away from a focus on production subsidies, it has introduced a performance-linked investment model. Under this system, follow-up support is provided only to companies that have actually secured contracts or attracted investment.

The government also operates a "content value assessment" system. A representative example is the establishment of the "K-Value Fund" (Value Assessment-Linked Fund No. 4 and 5) in the second half of 2023, with a scale of about 33.3 billion won.

The Korea Trade-Investment Promotion Agency (KOTRA), PwC, and Deloitte all identify AI-based production, immersive content, and augmented reality (AR) and virtual reality (VR) entertainment as next-generation growth sectors. U-KNOCK’s U.S. strategy is also aligned with this direction. Collaborative and investment-focused models, led by AI video production, virtual production, and IP expansion platforms, are becoming mainstream.

Woo Sungbae, Head of Content Finance Support at the Korea Creative Content Agency, explained, "Overseas investors highly value Korea’s growth, but without a reliable verification system, they inevitably remain cautious about new investments. Government-led IR events serve as verification platforms based on public trust, thereby reducing fundamental risks."

U-KNOCK is a clear milestone. It is a real turning point for the Korean content industry as it moves from the "Korean Wave of emotion" to the "Korean Wave of capital."