South Korean entertainment powerhouse CJ ENM Co. said on Monday it will invest 100 billion won ($82.3 million) in KT Studio Genie, a content production subsidiary of telecommunications giant KT Corp. to strengthen their partnership in original content production and distribution.
The investment will grant CJ, the producer of the Oscar-winning film Parasite, preferred rights to most of the original content created by KT Studio Genie and use it for distribution via CJ’s platforms.
CJ ENM currently runs around 16 cable TV channels, including drama channel tvN and music channel Mnet as well as an over-the-top (OTT) platform TVing.
The two companies also agreed to set up a joint investment fund to explore business opportunities in the virtual media business arena using virtual reality and augmented reality technologies.
Music streaming is another potential area where each side could share its strengths, they said.
“The cooperation with KT, a leading media platform operator, will be a big boost to CJ’s efforts to become a global entertainment company,” said CJ ENM Chief Executive Kang Ho-sung after signing a memorandum of understanding with Yoon Kyung-lim, head of KT’s group transformation division.
With the 100 billion won investment, CJ is expected to own about 10% of KT Studio Genie via a rights offering within the next three months.
CJ ENM aims to become Asia's Marvel Studios KT TO WIDEN DISTRIBUTION CHANNELS
For KT, the deal is expected to widen its content distribution channels by utilizing CJ ENM’s network.
KT Studio Genie, established in January of last year, creates drama, film and entertainment content based on the original intellectual property owned by Storywiz, another KT affiliate focusing on webtoons and web novels.
Studio Genie distributes content on the KT group’s platforms, including SkyTV, Olleh TV and KT SkyLife channel. It also uses KT’s mobile-oriented platforms such as KTH and Seezn.
The company said at the time it aims to secure an extensive library of more than 1,000 original intellectual property content and more than 100 drama content by 2023. KT will also create more than 30 original series in the next three years through KT Studio Genie, it said.
KT Studio Genie is spending heavily to widen its content distribution channels
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CJ ENM has been aggressively pursuing acquisitions, aiming to capitalize on the global success of K-content ranging from TV series and movies to pop music groups, while competing at home with Netflix as well as Disney Plus, which landed in Korea last year.
In mid-November, CJ said it is buying an 80% stake in Endeavor Content Parent LLC, a US-based entertainment and talent agency behind the production of Oscar-winning film La La Land, for $775 million. CJ said the purchase would strengthen its content creation and efforts to grow its business globally.
CJ Group Chairman Lee Jay-hyun also said in November CN ENM will seek to establish additional production houses by genre to ride on the global popularity of Hallyu or the Korean Wave, as part of the conglomerate’s 10 trillion won investment plan to focus on four growth areas, including culture and platforms.
On Monday, shares of Genie Music, majority-owned by KT Studio Genie, finished up 16.1% at 5,900 won, on expectations that the KT-CJ deal would boost its music streaming business.
KT SkyLife Co. closed up 2% at 8,780 won, while KT Corp. ended up 0.6% at 33,100 won. CJ ENM finished 1.6% higher at 132,400 won.
Write to Han-Gyeol Seon at always@hankyung.com In-Soo Nam edited this article.
