CJ ENM, the media and entertainment affiliate of CJ Group, is accelerating its push into overseas markets by forging back-to-back strategic partnerships with global OTT platforms such as Warner Bros. Discovery (WBD) and Disney+.
On the 5th, CJ ENM entered a strategic partnership with Disney+ and launched the Tving brand shop "Tving Collection" within Disney+ in Japan. In Oct., it signed a strategic partnership with Warner Bros. to expand K-content globally and strengthen competitiveness.
The two companies agreed not only to co-plan and co-produce K-content but also to launch a "Tving brand shop" within Warner Bros.' global OTT HBO Max in 17 Asia-Pacific regions, including Hong Kong, Taiwan, and Southeast Asia.
Analysts say CJ ENM has shifted to a "platform within a platform" strategy and a "supply-led model" in which it directly plans content and presents it to viewers worldwide. It no longer intends to do business where global OTT platforms select and release only what they want from its content.
Lee Mie-kyung, vice chair of CJ Group, who led CJ ENM's overseas business strategy this time, said it will be "a turning point that further elevates the global stature of K-content."
The start is good. "Dear X," which CJ ENM released on the 6th together with HBO Max and Disney+ in Japan, is gaining strong popularity overseas. It ranked in the top three of Disney+ Japan's daily chart and was cited as one of the best-performing Asian titles among Asian content across 17 HBO Max Asia-Pacific countries. The market is already building expectations for content to be released after Dear X.
There are roughly three reasons behind CJ ENM's change in overseas content distribution strategy.
First, there are limits to entering overseas markets through its own platform Tving, which has weak brand competitiveness. By partnering with global OTT platforms such as HBO Max and Disney+, it can minimize market entry risks and gain a foothold.
Second is an "anti-Netflix alliance." Analysts say it has skillfully leveraged the current market situation to check Netflix, the world's No. 1 OTT. By joining forces with global OTT platforms, it aims to bolster competitiveness in producing and distributing its own content. CJ ENM is also considering solo overseas expansion of its own platforms, including Tving, depending on how the market evolves.
Third is profitability. The industry views CJ ENM as taking more than 50% of the revenue in collaborations with HBO Max, Disney+, and others.
Some warn that if CJ ENM becomes overly dependent on global OTT platforms, its revenue structure could deteriorate and the competitiveness of its own platform Tving could weaken.
Depending on policy changes by global OTT platforms, the revenue-sharing structure could be altered to CJ ENM's disadvantage.
An Jeong-sang, chair of the Korea OTT Forum, said, "A brand shop strategy within global OTT platforms can be effective for CJ ENM's overseas distribution and expansion of content, but if dependence becomes excessive, its bargaining power may decline," adding, "How CJ ENM balances the competitiveness of its own platform with global partnerships over the mid to long term will be key to strengthening its overseas business."