Content is best bet for growth of MNOs, it says
South Korean telecom giant KT Corp’s most successful launch recently has an unusual name: Extraordinary Attorney Woo. This is not a new type of social media, antenna or even a financial service. It’s a story about a rookie lawyer with autism spectrum disorder, which has become the latest global ‘K-drama sensation’. It is dominating local cable show ratings and topping Netflix’s viewership chart of non-English shows for multiple weeks, according to the Korean Yonhap News Agency.
Traditionally these K-dramas were strictly the domain of media companies like CJ ENM or the three terrestrial TV networks. KT is best known as the country’s largest fixed-line operator and No. 2 wireless carrier. However, in March 2021 it established KT Studio Genie, a content production subsidiary and threw its gauntlet into the content production arena. Korean intellectual property is in huge demand around the world, with K-Pop bands being welcomed to meet the US President and drama like Squid Games being used to prop up Netflix. But should telcos stick to what they know?
For KT, the establishment of KT Studio Genie is part of its overarching business strategy to diversify its future growth portfolio, which now includes an array of new areas, such as cloud storage, media and mobile platforms and even AI semiconductors. Many industry watchers see the transition as being unavoidable, says Yonhap. For the telco KT there is little room for growth in its traditional fixed-line, wireless communications and broadband service areas. KT’s 2021 sales in the three areas, although substantial in size at 9.34 trillion Korean won or €7.2, represent growth of 1.7% on-year.
KT has announced a three-year plan to invest 500 billion Korean won (€375 million) to produce over 30 new original drama series and 300 entertainment shows through 2025. KT Studio Genie plans to release 22 more original drama series by next year. “Starting this year, KT Studio Genie will showcase well-made dramas and expand both its distribution channels and production spectrum through partnerships with businesses from both home and abroad,” Kim Cheol-yeon, CEO of KT Studio Genie, said in a press conference in April.
KT is not alone when it comes to the introduction of content-oriented business models in the telecom industry. SK Telecom, the country’s No. 1 wireless carrier, holds a major stake in local video streaming service operator Content Wavve, which it established with the country’s three major broadcasters, KBS, MBC and SBS, in 2019. Wavve has promised to invest 1 trillion Korean won (€750 million) in content by 2025 to strengthen its portfolio amid growing competition from local and foreign rivals.
SK Telecom also recently opened a visual effects studio, named TEAM (Tech-driven Entertainment for Asian Movement), in Pangyo, south of Seoul, to strengthen its content production and expand partnerships with global media companies. Taking its cue from StageCraft, an on-set virtual visual effects system designed by US studio building specialist Industrial Light & Magic, SK Telecom’s studio spans 3,050 square meters, creating production environments across two different LED wall stages.
LG Uplus, South Korea’s third-largest wireless carrier, has also made recent commitments to strengthen its content-related businesses, with an emphasis on children’s content. The telco recently made an undisclosed amount of investment in SAMG Entertainment, a local children’s animation studio responsible for the popular series Catch! Teenieping. The two companies plan to cooperate in developing new content and even explore the possibility of building a children’s theme park.
Entertainment content is a tricky business however. Extraordinary Attorney Woo is the second original series of KT Studio Genie, following its debut project Never Give Up, starring Kwak Do-won, released in May to what Yonhap describes as a “largely lukewarm reception”.