CJ ENM is set to rebound significantly, leveraging its content intellectual property (IP) and platform competitiveness. Tving has achieved its first quarterly profit since its launch, marking a recovery in its advertising business and diversification of content and music IP, which could lead to improved long-term profitability.
On August 7, CJ ENM announced its second-quarter results, reporting sales of 1.2033 trillion won and an operating profit of 33.4 billion won. The company aims to strengthen its IP competitiveness and accelerate growth in its digital platform.
The standout achievement is Tving, the online video service (OTT), which recorded an operating profit of 6 billion won in the second quarter, marking its first profitable quarter since becoming an independent entity in 2020. This success is attributed to the broadcasting of the Korea Baseball Organization (KBO) league and original content. Subscribers increased by 24.7% compared to the same period last year, with monthly active users (MAU) surpassing 9.7 million.
Notably, advertising revenue has also seen a significant increase, rising 52% during the same period, underscoring growth potential. Choi Min-ha, a researcher at Samsung Securities, stated, "Tving's first quarterly profit confirms the potential for improved profitability and financial strength. In the second half of the year, we plan to focus on expanding integrated advertising products that can offer combined proposals for broadcasting, digital, and outdoor advertising." He added that advertising revenue is expected to improve compared to the first half of the year.
Lee Hyun-ji, a researcher at Eugene Investment & Securities, also projected that TV advertising revenue would improve by 30% in the second half compared to the first half. She assessed that the expansion of integrated advertising products covering broadcasting, digital, and outdoor advertising could lead to a return to net growth in TV advertising revenue in the latter half of the year.
The monetization of content IP is also diversifying. A prime example is the original content "The Legend of the Cook Soldier." CJ ENM utilized artificial intelligence (AI) and virtual product placement (VPPL) technology during the production process to reduce costs. Additionally, the derivative IP "Taste Boys" has been expanded into music, food and beverage (F&B), and award show performances.
In the music sector, the company is recycling existing IP while also securing new IP. Through projects like "Produce 101 Japan: New World," "Koi Kids Planet C: Home Race," and "Modi Say," CJ ENM aims to attract new fan bases. Mnet Plus is also working to strengthen its global fandom base by expanding original content and digitizing fan clubs for Japanese artists.
The securities industry views Tving's first profitable quarter as a turning point, indicating that CJ ENM's investments in content IP and digital platforms are gradually translating into revenue. With the recovery of the advertising market and the expansion of new IP in the second half, profitability is expected to continue improving.
Hwang Seong-jin, a researcher at Heungkuk Life, remarked, "This is seen as a success in diversifying revenue sources through the reboot of past IPs. We anticipate that the company will expand its long-term revenue base through the enhancement of its IP portfolio."
* This article has been translated by AI.
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