CJ ENM to spend $4.5 bn to become Asia's Marvel Studios

South Korean media company CJ ENM Co. on Monday announced a plan to spend 5 trillion won ($4.5 billion) to produce original content over the next five years, with an aim to boost its over-the-top media services.

The planned spending is the largest amount announced by a South Korean content maker so far, underscoring the fierce competition among OTT streaming providers including Netflix.

Aiming to become the Marvel Studios of Asia, CJ ENM will produce around 100 pieces of original content through its OTT platform TVing by 2023.

This year alone, CJ ENM will pump 800 billion won into producing original content, more than Netflix's planned 2021 investment of 550 billion won in Korean original content.

"Now we will be able to release around four pieces of original content to viewers every day," CJ ENM Chief Operating Officer Lim Sang-yup said at the company's media event, CJ Vision Stream, on May 31.

The investment amount is 10 times more than its smaller rival Wavve's 80 billion won earmarked for this year. Wavve was jointly created in 2019 by South Korea's top mobile carrier SK Telecom Co. and three domestic broadcasting networks. 

Through aggressive investment, TVing aims to almost treble the number of its subscribers to 8 million by 2023, higher than its earlier goal of 5 million announced in January of this year.

OTT PLATFORM

TVing has been rapidly growing since it was spun off from CJ ENM in October 2020. From then until April of this year, its number of paid subscribers has surged 63%.

App downloads were up 67% during the same period. TVing is also expanding into sports broadcasting -- it obtained exclusive rights to cover UEFA Euro 2020 matches from Korea.

South Korea’s OTT market has been exploding, growing at an average annual rate of 26.3% from 2012 to 2020, when it reached 780.1 billion won.

Netflix Korea is the market leader with just over 10 million subscribers, followed by SK Telecom Co.’s Wavve with almost 4 million, CJ ENM Co.’s TVing with 2.65 million and KT Corp.’s Seezen with 1.68 million.

GLOBAL EXPANSION, MUSIC

TVing will join hands with foreign strategic partners in the second half of this year to offer its original content to the US, Japan and Southeast Asia as early as next year.

"Our priority is on becoming Asia's Marvel Studios," said COO Lee. "More than half of our original content to be produced will be based on our own intellectual property content."

CJ ENM Chief Executive Kang Ho-sung said during the media event that the company will produce transmedia content covering all formats and genres. 

CJ ENM's music business is also taking off. The boy band Enhypen debuted last year through the K-pop audition program I-Land produced by CJ's cable channel Mnet. The group made it onto the Billboard 200 albums chart last month.

Now the media company is co-producing an audition program to select a K-pop group member from South America in partnership with HBO Max, a streaming service provider of WarnerMedia.

"We will grow the value of K-pop-related IPs and their fandom, utilizing all our music platforms, such as Mnet, KCON and MAMA," CEO Kang said.

KCON is the culture festival hosted by CJ ENM. MAMA stands for the Mnet Asian Music Awards, a major South Korean music awards ceremony presented annually by CJ ENM's Mnet channel.

To facilitate offline performances, CJ ENM will be opening the country's largest content studio measuring 65,000 pyeong, or 214,500 square meters, in Paju, north of Seoul. It will also build CJ LiveCity, a K-pop entertainment complex in the same vein as Universal Studios, in Goyang, near Paju.

The spending announcement comes after CJ ENM joined forces with South Korea’s platform giant Naver Corp. to acquire the country's leading web novel platform Munpia Inc. in a deal valued at around 240 billion won ($215 million).

Last week, the country's dominant mobile app provider Kakao Corp. announced its foray into the OTT streaming market by acquiring domestic video streaming technology company, INISOFT Co., for 25 billion won.

Write to Hee-kyung Kim at hkkim@hankyung.com
Yeonhee Kim edited this article.