TBI Weekly: What CJ ENM’s deal for Endeavor says about Korea’s burning ambition

Crash Landing On You

South Korea’s CJ ENM said earlier this year that it wanted to become a global media powerhouse and now it has snapped up Endeavor Content. TBI’s Richard Middleton explores what’s next.

Hollywood-based Normal People and Killing Eve coproducer Endeavor Content has grown rapidly since its formation in 2017 to become a sought after gem in the scripted world.

In fact, it probably grew too quickly and became too successful, with the Writers Guild of America (WGA) stand-off then leading to a series of confrontations largely around the potential conflict of interests between Endeavor’s production side and its agency activities.

That is certainly one element of the sale story that broke this week, which saw CJ ENM forking out $755m for an 80% stake in the company. Yet while the US side of the story certainly throws up its own topics for discussion, it is the acquisitor that suggests there is more to come.

Parasite

Rewinding & reflecting

Before we go any further, it’s worth taking a quick look at how the Korean media industry has shifted over recent years.

Back in the balmy days of June, TBI suggested that the Korean wave of content – be it CJ ENM’s Oscar-winning film Parasite or iconic formats such as King Of Masked Singer and I Can See Your Voice – was turning into something quite different.

IP from Korea had long been sought after, initially by buyers across Asia. Over the past decade or so, the rest of the world got involved, with NBC in the US ordering its version of reality format Grandpas Over Flowers and companies such as ITV Studios and Endemol Shine Group (now owned by Banijay) striking numerous development pacts with the country’s talented creatives.

That was all well and good, but for the companies creating content such as CJ ENM, there always seemed a slight disconnect. The deals tended to be largely focused on a format sale, be it a hit entertainment show or a scripted effort, such as ABC’s hit remake of KBS2 drama Good Doctor.

It was certainly good business and represented the latest incarnation of the format evolution – indeed, it is almost impossible to discuss the world’s best formats of recent years and not talk about a show that originated in Korea.

Going direct

Yet while format sale after format sale was being struck, the world was changing – driven by streamers that are as keen to go direct with the shows they are producing as the way they deliver them to viewers.

HBO Max has looked to make the most of the K-pop phenomenon by striking a deal with CJ ENM and Mexico-based Endemol Shine Boomdog to form a new band in Latin America, while MGM partnered with a local producer for its own singing format.

And never to be outdone, Netflix earlier this year unveiled a $500m investment plan in February with a content strategy designed to attract local and global viewers alike.

Now, it seems Korea’s major players are looking to make similar moves. The Endeavor Content acquisition, set to close early 2022, is the largest M&A deal struck by the Seoul-based firm, despite having previously invested in Skydance Media and DreamWorks.

CJ ENM has also more recently bought Nordic distributor Eccho Rights and in June said it would invest more than ₩5tn ($4.5bn) in content creation over the next five years – with a specific focus on fuelling global growth.

Killing Eve

Opening new doors

Several things are worth noting. Firstly, commenting on the $775m acquisition, CJ ENM said the deal will allow it to “further accelerate its penetration into the global content market by making full use of Endeavor Content’s extensive network across various distribution channels.”

This, it enthused, will create “a full value chain for CJ ENM to distribute its top-notch dramas, movies, and entertainment programs to the world. New doors will open for the creative pool, including producers, writers, etc., that will be able to collaborate on multiple levels to create global mega-hit contents.”

It is a far cry from selling format rights.

There was also a notable plug for TVING, the streaming service that CJ ENM spun off recently and which is now going global. CJ ENM said it would leverage Endeavor’s original IP portfolio to support this roll-out, using the “library and portfolio” of both companies.

Endeavor Content’s slate ranges from Killing Eve and the forthcoming Severance, alongside Apple TV’s Roar and Wolf Like Me for NBCUniversal’s Peacock. The company also owns a stake in The Night Manager prodco, The Ink Factory.

CJ ENM, meanwhile, is best known for its Oscar-winning film Parasite, as well as films such as Snowpiercer and Miss Granny, while its TV credits include Crash Landing On You, Goblin: The Lonely And Great God and Hospital Playlist. With some canny rights negotiations, it is a line-up that starts to make a globally appealing streamer look like a possibility.

Lastly, CJ ENM is not the only Korean firm looking to take a hop, skip and jump into the global content business by making some hefty investments.

The Good Doctor

Internet giant Naver’s $600m acquisition of Wattpad, which was completed in May, is another case in point, while Korean streamer Wavve – launched by local broadcasters KBS, MBC and SBS with the backing of SK Telecom – announced in March that it would be spending ₩1tn ($884m) on expanding the service’s original content.

And again, the SF8 and M Topia streamer is eyeing direct access to the global market. It will launch content from the three broadcasters as well as its own originals via the streamer on an international basis, with talks on partnership deals already taking place.

Last, but by no means least, was news that JTBC Studios had taken a majority stake in Mare Of Easttown producer Wiip, marking the entry of the South Korean pay TV firm’s production division in the US.

Not dissimilar to CJENM’s acquisition of Endeavor, JTBC bought its majority stake from Creative Artists Agency (CAA). The Korea firm now owns Wiip’s expansive slate – ranging from Dickinson for Apple TV+, The White House Plumbers for HBO, Pistol for FX and Toast Of Tinseltown for the BBC.

At the time of that deal, JTBC Studios CEO, Si Kyoo Kim, said he expected the acquisition “to bring a significant opportunity… to make our first step into this dynamic market, for which we have yearned for a long time.”

Echoing those thoughts, Kang Ho-Sung, CEO at CJ ENM, said this week: “At the end of the day, CJ ENM strives to become a major global studio that encompasses content that appeals to a global audience – like this deal with Endeavor Content, we will continue to expand our presence in the global market.”