이 기사는 2022년 03월 31일 08:08 thebell 에 표출된 기사입니다.

CJ ENM, one of South Korea’s major entertainment companies, is gearing up to create a new production studio as it seeks to expand its content production capacity.

On March 24, the Seoul-based company’s board decided to create another studio subsidiary through cash contribution, according to a filing.

Kosdaq-listed CJ ENM had initially planned to split off a production business unit within the company into its wholly owned subsidiary. But its minority shareholders strongly opposed the plan due to concerns about a potential decline in the company’s value, while the country’s lawmakers have come in for tighter regulations.

This led the company to scrap the original plan and create a new entity through cash distribution instead.

“We’re going to create a new production studio as planned,” an official at CJ ENM, adding that further details such as where its office will be located have not determined yet.

CJ ENM already has its own drama production studio, Studio Dragon, which was established in May 2016 after being separated into its parent company’s wholly owned subsidiary. Studio Dragon has grown rapidly, with revenue increasing fivefold over the past five years. It also went public on Kosdaq in November 2017, diversifying its financing sources.

CJ ENM intends to grow its newly created studio as big as Studio Dragon through acquisitions. “CJ ENM is exploring acquisition opportunities behind the scenes to grow its new studio’s asset base,” an industry insider said.

CJ ENM wants to be Asia’s Walt Disney, which is known for its massive slate of content produced from various studios under its belt.

The company’s new studio will work on producing various genres of media content such as TV shows, movies and animations. Geographically, Hollywood studio Endeavor Content – in which CJ ENM acquired an 80% stake last year – will produce content for overseas viewers, while Studio Dragon and the new studio will focus on the domestic market.

CJ ENM also announced a 10 billion won ($82.6 million) equity investment in KT Studio Genie, an assembly of telco KT’s media and content businesses. They will collaborate with each other in various areas in media, such as TV dramas and music.

“We will be able to more focus on developing intellectual property and distributing content by separating our production studio business,” a CJ ENM official said. (Reporting by Nuri Moon)