Korean Film Studios Acquire Production Companies, Focus on In-House Productions
- Writerby Pierce Conran
Focusing on In-House Productions Korean Film Studios
With the rise of streaming services and in the face of rapid changes in the market amidst the global pandemic, the Korean content industry has found itself evolving at a furious pace. Korean content is more valuable than it’s ever been, and that means that creators have been in high demand.
Battling against the deep pockets and global resources of enterprises such as Netflix, Korean studios have been consolidating their production pipelines through a flurry of acquisitions. Recently, companies like CJ ENM, JTBC Studios, Kakao Entertainment and Next Entertainment World have bought dozen of production companies, particularly outfits with strong track records or those associated with known talent or bankable IP.
It isn’t a change that happened overnight, as companies like CJ ENM, in particular, have been making efforts to extend into production, in addition to financing, distribution and exhibition, for several years, but with the surging popularity of K-drama, an influx of investment-ready cash, and the threat of foreign competition, it’s a trend that has sharply accelerated over the last two years.
Confidential Assignment (2017)
CJ has been the top studio in the Korean film industry for years, and one of the reasons they have remained at the top is their ability to read and adapt to the market over time. Adding production capabilities to the range of their operations was a natural step in their evolution.
CJ Entertainment first appeared as a distributor in 1995, shortly after its parent CJ Group invested USD 300 million in Hollywood upstart DreamWorks SKG. CGV Cinemas followed in 1998, and CJ Entertainment claimed several key hits as an investor and distributor of local productions, such as Swiri (1999) and Joint Security Area / JSA (2000).
Among CJ Entertainment’s early ventures into production was its 2006 merger with Cinema Service, the film company founded by director Kang Woosuk. In its modern form, as CJ ENM (CJ Entertainment and Merchandising), the company started to explore production more aggressively starting in 2013, when it acquired a 70% stake in the hit drama production company JS Pictures, which recently made the popular show Mine.
In 2016, CJ acquired a 51% stake in JK Film, the production company headed by director JK Youn, which has been responsible for a slew of smash hits, including Ode to My Father (2014), The Himalayas (2015), and Confidential Assignment (2017). Youn and CJ are now developing a K-pop-themed road movie in America destined for the international market.
That same year, CJ bought controlling interests in several high-profile TV drama production companies associated with hit drama writers, including Hwa&Dam Ent. (Kim Eunsook, Mr. Sunshine), Culture Depot (Park Jieun, Crash Landing on You), and KPJ (Kim Younghyun, Arthdal Chronicles). Even more significant was the establishment of Studio Dragon, CJ’s in-house drama production unit that these days plays a hand in a dominant share of Korea’s major TV dramas. In 2019, CJ also bought the drama production house GTist (Hotel Del Luna).
Through Studio Dragon and its acquired drama production companies, CJ now supplies a steady stream of original programming to populate the cable channels it owns, which include tvN, OCN and Mnet, as well as its fledgling streaming service TVING, which is aiming to sign up eight million global subscribers by 2023.
Yet while dramas are hogging a lot of the spotlight these days, CJ remains committed to film production. Earlier this summer, CJ purchased a 51% share of the newly formed production company MMakers, a partnership between hit directors Kang Jekyu (TaeGukGi: Brotherhood of War, 2004), Kim Hyunsuk (I Can Speak, 2017), Cho Uiseok (Master, 2016) and Lee Byoungheon (Extreme Job, 2019).
CJ also has minority stakes in several other major companies, including the VFX and production house Dexter Studios, known for the Along with the Gods films, and the Hollywood production outfit Skydance Media, responsible for the Mission: Impossible series.
By comparison, JTBC Studios is a relatively new player in the market. It is a subsidiary of the cable channel JTBC, which itself only began operations in 2011 and has spent the last couple of years aggressively beefing up its production pipeline, both for drama and film content. Ahead of a planned launch on the Korean stock market in the next few years, JTBC Studios has been able to induce significant investment to allow it to grow its portfolio and establish its presence before its IPO.
Against a current estimated value of KRW 1.3 trillion (USD 1.11 billion), it received KRW 300 billion (USD 257.17 million) from the private equity firm Praxis Capital. With that cash injection, it has bought up a dozen high-profile companies in the space of two years, positioning it as one of the major players on a new horizon for the Korean content market.
JTBC kicked off its acquisitions streak with Film Monster in 2019, the company behind Intimate Strangers (2018), and the upcoming Netflix series All of Us Are Dead. Other film companies snatched up by JTBC include BA Entertainment (THE OUTLAWS, 2017) and Perfect Storm Film (ASHFALL, 2019), while it has also acquired drama production entities such as Dramahouse (The World of the Married) and Studio Phoenix (Law School).
In 2020, JTBC made big waves by purchasing a 100% stake in Anthology, a new production outfit set up by director Kim Jeewoon, global star Song Kangho and producer Choi Jaewon, previously the head of Warner Bros Korea, for KRW 20 billion (USD 17.14 million), who all worked together on The Age of Shadows (2016).
This year has seen them make even more aggressive strides after they purchased a controlling share of the Hollywood company Wiip, the former CAA subsidiary which produced the recent HBO series Mare of Easttown. During the summer, it was announced that JTBC had also claimed stakes in drama companies Production H (Love Alarm season 2) and Zium Content (Itaewon Class), as well as Climax Studio, one of the hottest young companies in the industry. Climax, which was spun off from the IP powerhouse Lezhin Studios, sold a 95% share to JTBC for KRW 45 billion (USD 38.57 million). The company is run by Byun Seungmin and is behind major Netflix shows such as D.P. and Hellbound, as well as a range of high-profile upcoming films like Concrete Utopia with Lee Byunghun.
The Spy Gone North (2018)
Kakao Entertainment, a subsidiary under the major Kakao corporation which merged the former entities Kakao M and Kakao Pages and is also known as M Company, has quietly been buying up production companies, as well as a large number of talent agencies. Among their major acquisitions have been director Yoon Jongbin’s company Moonlight Film (The Spy Gone North, 2018), of which they have a 41% share, and producer Han Jaedeok’s Sanai Pictures (New World, 2013), of which they own an 81% stake and which has often worked with Moonlight.
Also in Kakao Entertainment’s portfolio are the drama production houses Baram Pictures (My Mister), Logos Film (Vincenzo), and Story & Pictures Media (Voice season 4), as well as Kross Pictures, a company that specializes in remaking films in different markets, notably Korean films for the Indian market. The management companies that Kakao owns include Management SOOP, which represents Gong Yoo, and Lee Byunghun’s company BH Entertainment.
The Great Battle (2018)
Next Entertainment World (NEW)
Next Entertainment World (NEW), the studio behind the global hit Train to Busan (2016), is another company that got into production early. The studio formed the subsidiary Studio&NEW, which debuted with the hit drama Descendants of the Sun in 2016, and produced its first film, The Great Battle, in 2018. Studio&NEW recently inked a five-year deal with Disney+, which is entering the Korean market later this year. Among their upcoming productions is the big-budget series Moving.
NEW has also established ties with production companies, such as Goldmoon, the company led by director Park Hoonjung, known for New World and The Witch: Part 1 - The Subversion (2018). Among their planned projects are a prequel series to New World.