CJ ENM’s streaming platform raises $209 mn to finance original content

TVing Co. is poised to sell 382,513 new shares to South Korean private equity fund JC Partner Co.’s affiliate to raise 250 billion won ($209 million), its parent company CJ ENM Co. said in a regulatory filing on Friday.

JC Growth Investment, JC & Partners’ affiliate, will make the payment through a special purpose acquisition company (SPAC) named Media Growth Capital Corp. by Feb. 25.

CJ ENM explained that the new investment is aimed at strengthening the competitiveness of the OTT platform and creating original content.

The online streaming service’s corporate value stands at 2 trillion won ($1.7 billion,) a sixfold jump in just seven months.

Originally a division within the entertainment juggernaut, TVing split off from CJ in October 2020. The over-the-top (OTT) media service is a joint venture of CJ ENM, Naver Corp. and JTBC. 

“The market has positively viewed the surge in number of new subscribers and the company’s global expansion plans,” a CJ ENM employee told The Korea Economic Daily.

TVing plans to use the fresh injection of funds to create more original content and to advance its IT infrastructure. 

“We are planning to do an initial public offering in two to three years,” CJ ENM co-CEO Yang Ji-eul said about its longer-term plans.

MONEY TALKS

In Dec. last year, CJ ENM and New York-based ViacomCBS announced a global content deal regarding co-productions of original content as well as licensing and distribution. 

Under the agreement, the two companies will launch Paramount Plus in South Korea sometime this year. 

A month prior to the ViacomCBS announcement, CJ ENM also said it will acquire an 80% stake in US-based global content studio Endeavor Content for $785 million. 

Separate from the global deals, CJ ENM allocated 860 billion won for content creation this year. Of that amount, more than 200 billion won will go directly to TVing.

Other CJ ENM channels like tvN will also create content, which will be available on TVing.

The OTT business requires a significant amount of financial investment up front as the number of subscribers directly links to revenue. 

To attain the user base, the companies need to provide popular content in a consistent manner. As it is hard to predict whether a soap opera or movie will be a hit or miss, only a company with enough financial backing can enter the market. 

South Korea’s e-commerce giant Coupang invested 100 billion won into Coupang Play. To create the first season of SNL Korea, the startup injected 12 billion won to produce the initial 10 episodes. 

Wavve by SK Telecom Co. plans to dole out 1 trillion won for content by 2025. 

KT Corp. announced it will invest more than 400 billion won in Seezn's content creation, also over the course of the next three years.

Write to Seon Hangyeol at always@hankyung.com
Jee Abbey Lee edited this article.