THE PRODUCTION company behind Netflix, Inc.’s teen zombie series All of Us Are Dead is seeking to go public by the second half of next year as it looks to increase production in what has been a hot market for South Korean movies and TV shows.
SLL JoongAng Co., an affiliate of the JoongAng media group, is considering an initial public offering in Seoul or another market, Chief Executive Officer Jung Kyung-moon said in an interview. He is looking to raise capital and more than double the company’s sales to around two trillion won ($1.5 billion) in 2025 by producing 40 to 50 TV shows a year.
“We want to be a top-tier global studio,” Mr. Jung said. “It’s not an impossible mission.”
A global boom in the popularity of Korean entertainment has helped SLL expand its offerings, which also include the Netflix romantic comedy King the Land and the Disney+ series Big Bet, as well as films, and nonscripted shows popular on YouTube. Its US studio wiip Productions, acquired in 2021, produced the miniseries White House Plumbers for HBO. SLL also operates an office in Japan.
The company already has powerful backing by parent Contentree JoongAng Corp. and Tencent Holdings Ltd. It began by producing TV dramas for the JoongAng group’s TV channel. Currently it’s South Korea’s No. 2 producer behind CJ ENM Co.’s Studio Dragon.
Two big challenges stand in Jung’s way right now. The average cost of producing a Korean drama has tripled over the last five years to about $2 million an episode. More elaborate productions can run to $4 million or more.
With most of that budget going to the stars, directors, and writers, profit margins on streaming TV series have remained stagnant at around 10%.
While margins can improve if a series gets renewed, like Squid Game and All of Us Are Dead, companies like SLL continue to incur costs on less-successful shows that fade from public awareness a few weeks after release.
“The Korean content market is facing a tougher environment,” Mr. Jung said, citing rising costs and smaller content budgets from buyers. “We are in a crisis, but people don’t feel it yet.”
For SLL, the key to profitability will be to diversify geographically, Mr. Jung said. The purchase of wiip, the US studio, has so far weighed on earnings, however, in part due to the months-long Hollywood strikes.
Mr. Jung expects that the US studio’s results will improve once actors and writers return to work, something that could happen in coming weeks. (The writers’ strike ended this week but the actors strike is ongoing. — Ed.) The company is also setting up overseas offices in cities such as Tokyo to produce local content with creators there.
SLL is seeking partnerships with global streaming platforms, such as Hong-Kong based Viu International Ltd. and Amazon.com, Inc.’s Prime Video, for more overseas distribution. Such deals would reduce SLL’s dependence on streaming TV’s biggest player, Netflix, Mr. Jung said.
“K-drama has always found a path through crises to bigger growth,” he said. — Bloomberg
