Today, we are joined by CEO, Mr. Koo Chang-geun, and the heads of the respective business lines. Mr. Hwang Deuk-Soo, CFO and Head of the Management Support Office, Mr. Lee Woo-jin, EVP for Management Support, Mr. Kim Yoon-hong, CSO, Head of our Growth Strategy, Mr. Kim Jong-beok, Head of Media, Mr. Ko Kyung-beom, Head of Pictures, Mr. Oh Kyung-ju, Head of Music, also Mr. Steve Jung, Head of our Global Business, Ms. Kim Jae-hyun, CEO of Studio Dragon, Mr. Yang Ji-eul, CEO, excuse me, of TVING, and Mr. Ha Yong-soo, CEO of CJ ENM Studios. We will now begin with a presentation by the CEO on our business strategy. Yes. Greetings, this is Koo Chang-geun, CEO of CJ ENM. I believe this is the first time I am greeting you in this capacity. Very nice to meet you.
I would like to acknowledge that I understand that there are both a mix of expectations and concerns in the market regarding CJ ENM and myself. Today, I would like to take a few minutes to speak at a high level about the changed strategic directionality of our company. Because of the time and spatial constraint today, I think that we will have to reserve more detailed discussions for a later occasion. I'll try to share greater details with you at the next opportunity. As you know, CJ ENM is an integrated media and entertaining company that is engaged in a wide range of content-related businesses across the full value chain from planning, production to distribution. We are witnessing very rapid change in the business environment of our industry.
Certainly, due to changing viewership behavior shifting toward OTT, there is now declining demand for linear TV or film theater viewership, with the resulting slowdown in the broadcasting and advertising market weighing on CJ ENM as well as a source of crisis. That being said, as a media player with direct ownership over a D2C platform that includes OTT, I believe this presents major opportunities for us as we can interact directly with our consumers. From the context of consolidation across the global OTT media market, driven by OTT, I think that growing global demand for K-content also represent positive change for us in the evolving market environment. Let me briefly take you through our strategic directions to advance to a true global IP powerhouse, as we respond proactively to the changing environment. Yes.
First, in terms of content IP, we intend to build a robust system for content production and create a creative ecosystem that will allow us to produce content that has global competitiveness. Up to now, we have focused on strengthening our production facilities by working together with competent creators or by strengthening our production infrastructure. Going forward, we would like to evolve to create more compelling content with global competitiveness. Our focus will be on securing original mega content IP while also establishing a data-driven production system, expanding collaboration with a wider creator ecosystem, to again create compelling global content with appeal. We'll also look to strengthen globalization, not only of drama content, but unscripted variety show type content as well by introducing very diversified production system and environments.
두 번째는 TVING 플랫폼 기능 강화 전략입니다. TVING은 안정적으로 공급되는 콘텐츠 경쟁력을 기반으로 가입자 수를 양적으로 증가시킨다는 측면에서는 그동안 좀 성과가 없지는 않았지만은, 플랫폼 본연의 경쟁력인 UI, UX 같은 소비자 편의성, 그리고 우리가 보유한 콘텐츠들을 고객에게 효과적으로 전달하는 마케팅 역량, 이런 측면에서는 타 사업자에 비해 많이 열위에 있었다고 생각합니다. 이로 인해서 고객 리텐션 측면에서는 개선의 여지가 많이 있습니다. 이에 대한 본격적인 개선을 통해서 좋은 콘텐츠로 유입된 고객을 효과적으로 리텐션하고, 서비스 가격을 체계적으로 올림으로써 플랫폼 사업자로서의 경쟁력을 강화하겠습니다. 글로벌 스트리밍 사업자의 성장으로 인해서 사실은 플랫폼과 콘텐츠 간의 융합은 이제 피할 수 없는 추세고, 저희 CJ ENM도 기존 콘텐츠 사업 중심에서 벗어나서 TVING의 성장을 통해서 좀 더 플랫폼 역량들을 강화하고 플랫폼 사업자로 진화해서 D2C 플랫폼을 통해서 고객을 직접 만나고 고객 데이터를 축적할 수 있는 계기를 마련하겠습니다.
Yes. Second, we wish to strengthen the functionality of our TVING platform. Yes, it is true that in qualitative terms, the TVING platform did record a strong performance, mostly in subscriber gains. I believe that in terms of convenience of our UI, UX or in terms of the delivery of our contents to our customers in an effective manner, I think that there were many shortcomings relative to our peers and certainly room for improvement in terms of customer retention. We want to address this issue fully and again focus on improving retention of users who come to us while increasing or systematically increasing the price of our services and overall strengthen our competitiveness as a strong platform provider.
When we look at the growth paths of global streaming service providers, it does seem convergence between platform and content appear to be an unavoidable trend. At CJ ENM also, we wish to evolve beyond the current focus around existing content and transition into a platform business driven by TVING growth, led growth using our D2C platform as a direct interface to get to know our customers and accumulating customer data.
세 번째는 음악 사업에서의 시장 지위 강화입니다. 타사가 가지지 못한 Mnet 채널을 기반으로 음악 사업을 국내외로 지속 확대하겠습니다. 해외에서는 일본 라포네도 올해 아마 신규 아이돌 공개를 통해서 추가적인 성장 모멘텀을 마련할 수 있을 것으로 생각합니다. 중장기적으로는 아이돌뿐만 아니라 전면적으로 음악적인 진정성에 조구하는 추가적인 IP 개발을 통해서 음악 사업에서의 시장 지위를 지속 강화해 나가고, 자사 디지털 플랫폼인 Mnet Plus, 그리고 오프라인 플랫폼인 KCON MAMA를 수익 관점에서 조금 더 고도화해서 CJ ENM의 음악 생태계를 더욱 공고하게 만들도록 하겠습니다.
Third, is to strengthen our position within the music industry. So we have a very unique asset in the form of our Mnet channel, and we will be using that asset to build out our music business in and outside of Korea. For example, Japan, LAPONE will be introducing new idol groups this year. We'll be able to generate a lot of growth momentum, we expect. In the mid to longer term, we seek to solidify a leading position in the music sector, but not only through idol groups, as we wish to develop additional music IP with genuine musical appeal across different genre. We will also continue to advance our digital Mnet Plus platform and our KCON MAMA offline platform to further reinforce CJ ENM music ecosystem.
네 번째는 콘텐츠 유통 구조 진화를 통해서 수익을 좀 극대화하겠다는 부분입니다. 저희 CJ ENM은 국내 최고 수준의 제작 역량을 가지고 있습니다. 이를 활용해서 수익 극대화 관점에서 CJ ENM의 플랫폼 그리고 타 플랫폼 간의 유통 물량 비율을 잘 안분하고 최적화하겠습니다. 더불어서 글로벌 유통 판로를 조금 더 다변화해서 환가 체계를 고도화하고 글로벌에서 메이저급 유통 역량을 조속히 확보하도록 하겠습니다. 이와 함께 IP의 소유 그리고 주도권 관점에서도 영향력을 좀 더 강화해서 수익 극대화에 기여하도록 하겠습니다.
Fourth is to maximize earnings by changing the structure of our content distribution system. At CJ ENM, we have the strongest production capacity in Korea. By leveraging these strengths, we will seek an optimal mix in distribution volume between CJ ENM's own platform and third party platforms. Again, centered on maximizing profitability. We'll also diversify our global distribution channels, enhance our pricing scheme to build distribution capability that is on par with global majors in the near term. We'll also increase our influence in the industry from an IP ownership and hold perspective to contribute more to maximizing profitability.
네, 마지막은 수익 중심 경영인데요. 음, 과거에 CJ ENM 사업이 콘텐츠 제작 측면에서는 독보적인 경쟁력을 가지고 있었음에도 불구하고 어, 일부 사업적인 부실, 어, 조직이나 비용 관리 측면에서는 아쉬운 부분들이 좀 있었던 것으로 생각합니다. 네, 앞으로는 조직과 비용 관리를 좀 더 효율적으로 추진하고, 자원 투입 역시 수익 관점에서 조금 더 최적화하려고 합니다. 아, 금번 조직 개편에서 보셨겠지만, 각 비즈니스 유닛의 리더가 책임 경영을 할 수 있는 방향, 그리고 어, 주요 의사 결정들이 빠르게 진행되고 체계적으로 실행될 수 있는 방향으로 조직을 진화시키겠습니다. 더불어서 비핵심 자산 유동화를 통해서 재무 건전성을 확보하고, 어, 주주가치 극대화에도, 위해서도 노력하겠습니다.
Yes. Finally, is our profit-driven management. In the past, despite CJ ENM's unique competitiveness in content production, there were some shortcomings in terms of weaknesses in certain business areas, as well as issues in terms of management of costs or the organization. In the future, we will focus on more efficient management and optimize investment of resources, again, from a profit-oriented perspective. As you may have noticed from the recent restructure, we actually want to give more accountability and initiative to the respective leaders of our individual business units, to establish a very systematic process of moving quickly on decision making. Once decided, we want to really execute quickly as well. That is the direction in which I would like to evolve our organization towards.
We'll also achieve better financial soundness by securitizing non-core assets and also working to continue to deliver maximum shareholder value. I have again taken you through a high level strategic direction for CJ ENM. It was not intended to be detailed, but I hope to have more opportunity in the future to discuss further details about our strategy and also implementation actions later on. I would like to close by making two final comments. First is your understanding that CJ ENM is in a long tail business that requires longer time interval to build and to evolve. Creating content, for example, may take anything from a year to a year and a half. In fact, this year's content lineup was actually already decided when I joined and came over to CJ ENM.
While I understand that it is a very important task for us to respond very quickly to changing industry trends, I must say that the actual pace of change from CJ ENM may be slower versus market expectations. Again, I would like to remind you, this is just a characteristic inherent in our industry. Moreover, CJ ENM is in the business of investing capital and human resources, utilizing our production processes, to plan, produce, post-produce, and distribute market content to finally get viewers to enjoy our content. The output of this production process actually goes beyond simple accounting or financial money terms.
There are significant other output gains, such as a robust portfolio of content IP that we can accumulate as a content player, human resources that are fostered in the course of our business, also a collaboration with the outside ecosystem, and ultimately a more evolved content creation process. The sum and combination of all of these input factors then circle back and become inputs for the next fiscal year. Certain outputs like short-term earnings may be at a trade-off with other outputs like content IP or fostering of human resources. The strategic challenge that I face as the CEO in the mid to longer term is what exact mix of output factors we should choose to focus on and aspire to achieve.
Given the trade-off, maximizing short-term profits can undermine our mid to long-term sustainability, and therefore I have no choice but to be very prudent in choosing amongst our available options. Again, while I fully realize that the market may have quite high expectations for me and the company, I would appreciate if you could give these into account and take up a more balanced view as CJ ENM embarks on evolving our business strategy going forward. This concludes my comments for today, and I look forward to speaking you at my next opportunity. Next, we'll move on to a presentation from our CFO, Mr. Hwang Deuk-soo, to highlight our business management goal for 2023. Yes, this is Head of Management Support, Hwang Deuk-soo.
Moving into 2023, we will work to restore competitiveness of our business by reinforcing our lineup of premium IP and also enhancing the profitability of our distribution platform with a particular focus on profitability-based management. We aim to maximize our entertainment business earnings by strengthening global IP and our TVING platform while expanding distribution. On the excuse me, on the commerce side, we will improve the competitiveness of our product offerings and brands and expand GMV through our one platform strategy. TVING is enjoying enhanced status as a strong media platform, and our target this year is to achieve 5 million paid subscribers while seeking to demonstrate meaningfully improved margins based on the strength of our strong services which are built on our competitive content and also by advancing our marketing strategy.
Our goal is to achieve 40% plus growth in content sales as we ramp up our advancement into the global markets rather than being complacent and content with our number one position in the domestic market. For our music business, we are looking to deliver strong growth, primarily around Japan and the Asian markets, increasing the share of overseas sales to more than 50% of our total revenue mix and continuing earnings growth, driven by a strong pipeline of new artists scheduled to debut this year and also by growing our music album and concert business. On the commerce front, we seek to recover profitability driven by our one platform strategy. We'll also solidify our merchandise sales and brand competitiveness, not only in TV commerce, but also expand our digital and offline distribution as well as a brand play.
Lastly, in 2023, we would like to improve our cash flow through more efficient allocation of resources and tighter cost controls. We will also strengthen financial soundness by securitizing non-poor assets. Page 5 outlines our new content lineup. This year, program content such as Crash Course in Romance and Our Blooming Youth have been creating a big buzz among our viewers, and we are targeting a significant contribution in traffic from TVING original content like Island and also Duty After School. In 2023, we'll continue to grow our media platform on the strength of our overwhelming content capabilities. Thank you. We will move on to our financial results. Please be reminded that CJ ENM quarterly and full year financial statements are consolidated results based on K-IFRS.
We'll now report on our company-wide business performance for the fourth quarter 2022.
2022년 연간 매출액은 KRW 4,792.2 billion으로, 전년 比 34.9% 성장했으며, 영업이익은 KRW 137.4 billion으로 53.7% 감소했습니다. TVING 가입자의 견조한 성장 및 콘텐츠 판매, 글로벌 아티스트 활동 확대 등이 매출 성장을 견인했습니다. 영업이익 감소는 Fifth Season과 TVING의 영업손실 및 TV 광고 부진의 영향이 컸습니다.
Yes, this is Hwang Deuk-Soo from CJ ENM finance team. The fourth quarter consolidated revenue was KRW 1,464 billion, up 47.1% year-on-year, while our operating profit declined by 77.7%, recording KRW 6.6 billion. Full year revenue was KRW 4,792.2 billion, up 34.9% Y-o-Y, while operating profit for the full year was down 53.7% at KRW 137.4 billion. Drivers of top line growth include a solid rise in the number of TVING paid subscribers and also content sales, as well as stronger performance by global artists. In contrast, the biggest driver behind the drop in operating profit came from operating loss from Fifth Season and TVING's poor TV ad performance.
네, 2023년에는, TVING 가입자 확대와 제작비 효율을 통해서 미디어 부문 손익을 개선하고, 신규 아티스트 데뷔와 콘서트 확대를 통해 음악 사업의 이익 성장도 지속하겠습니다. 각 사업별 자세한 내용은 자료를 참고해 주시기 바랍니다. 이상입니다.
In 2023, we will be increasing our TVING subscriber base and achieving greater production cost efficiencies to improve our media earnings. We also want to increase new artist debuts and concerts to drive continued earnings growth in our music business. Please refer to the handout for further details by business area.
계속해서 Studio Dragon 실적 발표 드리겠습니다.
We will move on directly to the performance results for Studio Dragon.
안녕하십니까, 스튜디오 드래곤 김재현입니다. 22년 사분기 및 22년 연간 경영 성과에 대해 말씀드리겠습니다. 22년 사분기 매출은 글로벌 OTT 오리지널을 중심으로 전년 동기 대비 이십이점 팔 프로 증가한 천구백오억 원을 기록했고, 영업이익은 판권 상각비 상각, 인수 제작사 PPA로 인한 상각, 인센티브 등 일회성 비용을 다시 계상하면서 십이억 원을 기록했습니다.
Yes, this is CEO of Studio Dragon. My name is Kim Jae-hyun. I will take you through our management results for the fourth quarter 2022, as well as full year 2022 results. Fourth quarter revenue was KRW 190.5 billion, up 28.8% year-on-year, driven by global OTT original content. Operating profit recorded KRW 1.2 billion on rise in copyright amortization costs, as well as other non-recurring one-offs, including amortization of PPA, and also, this was from our production house acquisition, by the way, and also incentive payments.
2022년은 넷플릭스 글로벌 Top 10에 아홉 개 작품이 등 글로벌 레퍼런스를 강화하고 다양한 OTT로 플랫폼을 다각화해서 질적, 양적 성장을 이루었습니다. 그 결과 연간 매출은 사십삼 점 삼 프로 증가한 이천구백칠십구억 원을, 그중 해외 매출 비중이 오십이점 팔 퍼센트를 이루었고, 영업이익은 이십사 프로 증가한 육백오십이억 원을 기록했습니다.
In 2022, we strengthened our global reference base with nine of our works making it onto the Netflix Global Top 10 list, and achieved meaningful growth in both quality and quantity by diversifying our platform across multiple OTTs. As a result, our full year revenue was KRW 697.9 billion, up 43.4% year-on-year, with the share of overseas revenue growing to 52.8%. Operating profit was KRW 65.2 billion, up 24% year-on-year.
2023년은 경영 환경을 개선해서 Glocalization을 완성해 나가겠습니다. Netflix와의 재계약에서 콘텐츠 영향력을 발휘해서 강화된 협상을 완료하고, 새로운 OTT와의 볼륨 딜 또한 목전에 두고 있습니다.
Looking to 2023, we will focus on improving our business environment and completing our Glocalization initiatives. We demonstrated our better and improved bargaining power in renewing our contract with Netflix, thanks to the increased clout that our strong contents have given us. We're just about to sign a large volume contract with a new OTT.
'The Glory'로 시작한 Globalization은 다시 Premium IP와 시즌제 작품으로 그 열기를 이어갈 것입니다. 나아가 'The Big Door Prize'에 이어서 미국 드라마 성과를 안정적으로 보임과 동시에 일본 현지 프로젝트를 가시화해서 Localization에 힘쓰겠습니다. 2023년 Studio Dragon은 Globalization을 완성해서 고성장 궤도에 안착하겠습니다. 감사합니다.
Our globalization drive, which started off with The Glory, will be followed with numerous premium IP in the pipeline and also season-based programming to maintain a hot growth momentum. As a follow-on to The Big Door Prize, we will continue our localization efforts, focusing on our U.S. drama to deliver stable results, while also working hard on our local projects in Japan so that they can materialize. In 2023, this should be the year when Studio Dragon can come full circle and complete the globalization loop to anchor itself on a pathway for higher growth.
다음은 질의응답입니다. 질문은 핵심사항 위주로 부탁드리겠습니다.
Yes. Thank you very much. Next, we'll move on to the Q&A session, and we ask that you focus your questions on major issues.
그럼 지금부터 질의응답을 시작하겠습니다. 질문이 있으신 분들은 전화기 버튼의 별표와 일 번을 눌러주십시오. 신청하신 질문을 취소하시려면 별표와 이 번을 눌러주시면 됩니다.
Q&A session will begin. Please press asterisk 1, asterisk and 1. If you have any question for translation, please press asterisk 2 that is asterisk and 2 on your phone.
현재 질문을 요청하고 계신 분은 없습니다. 질문이 있으신 분들은 전화기 버튼의 별표와 1번을 눌러주십시오.
Currently there are no participants with question. Please press asterisk 1, asterisk and 1 to give your question.
처음으로 질문해 주실 분은 흥국증권의 황현진 님입니다. 질문해 주십시오.
The first question will be given by 황현진 from Heungkuk Securities. Please go ahead.
예, 안녕하세요. 저는 Daishin Securities의 김회재입니다. 일단 E&M 질문 먼저 하나 드릴 텐데요. 저희가 3분기 실적발표 하시면서 연간 어닝 가이던스를 주셨는데 4분기에 좀 미달한 게 일회성 요인인지 아니면은 4분기에 생각하셨던 거 대비 좀 시장 환경이 바뀐 부분이 있는지 이런 측면에서 설명 좀 부탁드리고요. 두 번째는 Studio Dragon도 하나 질문드리겠습니다. 지금 시트 페이지 보면은 평당 제작비 증감이 30% 이상이라고 되어 있는데 이게 올해 제작할 작품들 전부 다 이렇게 30%가 증가한다는 건지 아니면 주요 작품 위주로 30% 이상 증가할 수 있다라고 말씀하시는 건지 좀 다시 한번 부연설명 부탁드리고요. 탑 라인은 좀 좋게 지금 표현되어 있는데 혹시 수익성 전망에 대해서도 설명 가능하시면 설명 부탁드리겠습니다. 감사합니다.
This is actually Kim from Daishin Securities. I have a question first regarding E&M. I think during your conference call earlier at the third quarter, or during the third quarter last year, you provided full year earnings guidance. It does appear that you missed the guidance for the fourth quarter. Do you believe that this was due to mostly a one-off factor, or was there any change to the market environment that you had not expected or thought of? If you could explain that further, I would appreciate it. The second question has to go to Studio Dragon. I think somewhere on page 11, you suggested that per title production costs may increase by more than 30%. Does that apply to all titles that will be in the works this year?
Do you mean that that may be the case for some major works? Overall, your top line looks quite good. Could you provide your outlook in terms of the underlying profitability?
네, 먼저 첫 번째 질문 먼저 답변을 좀 드리겠습니다. 그 저희가 사 분기에 실적이 좀 예상보다는 좀 부진했던 이유는 실질적으로 저희 미디어 쪽에서 티빙 가입자가 확대되고 콘텐츠 판매가 성장세를 이어갔음에도 불구하고 이 대외환경 악화로 사실 고마진을 유지했던 TV 광고 시장이 많이 축소가 된 상황이고, 저희 콘텐츠 제작비가 증가해서 수익성은 예상보다, 당초 예상보다는 조금 부진한 상황이었습니다. 다만 이런 부분들을 음악은 저희가 콘서트 중심으로 외형 성장을 지속하면서 역대 최대 매출을 지금 기록하고 있고, 그 사 분기에 영화 같은 경우에도 해외 수출 그리고 부가 판권 등으로 매출 증가로 외형 및 수익성은 회복을 하고 있는 상황입니다. 커머스 역시 상품 경쟁력 강화 및 선수효과로 인해서 취급품이 증가하였고, 어 비용 절감으로 수익성은 개선된 상황입니다. 다만 이제 저희가 사실 예상보다 실적이 부진했던 이유는 미디어 쪽이 좀 그 영향이 좀 컸던 부분이어서 이 부분은 시장이 좀 개선되고 TV 광고 저희가 이 십삼 년에는 그 TV 광고 매출을 좀 공격적으로 늘리면서 사실 이 부지, 실적 부분 좀 다시 개선하겠다는...
네, 비용 절감, 실적 개선이 어떤 사업이었죠? 죄송합니다.
비용 절감? 네. 미디어. 미디어 부분입니다.
In the fourth quarter, it is true that we did see stock, or actually weaker performance than originally expected. Actually we saw a increase in the number of TVING subscribers and also saw an increase in content sales. Overall it was the downturn in the external environment that led to a contraction in the high margin TV advertising business. Also there was an increase in content production costs that weighed on our profitability in the fourth quarter. Overall, in other non-media businesses, we did very well for music, driven by concert growth. We saw really record high revenue in the fourth quarter also, very strong top line and bottom line performance in films as well, driven by overseas exports.
There were also cost savings measures that led to a profitability improvement in certain business units. Overall, it was mostly due to the factors that I mentioned specific to the media business. If we assume that the market, media market improves going forward, we can actually focus on growing our TV advertising sales more on a full-fledged basis in 2023. In that case, we would see our performance improve.
[Foreign language]
Regarding the expected increase in production costs, you are right in that would apply for the major works mostly. The large scale titles that we will provide to the OTT platform, for example, those are the ones that may or are expected to see perhaps over 30% increase in production costs.
[Foreign language]
[Foreign language]
Following question is by Kim Sunghwan from Credit Suisse Securities. Please go ahead.
So you are correct, as we do season-based work with every SQL season, it is true that we see improved margins for the later season. Also when we renewed our, or when we entered into new contracts with OTT players, we were able to negotiate better favorable terms than before. I would say that we expect continued growth in 2023, both in terms of quantity and quality.
[Foreign language].
The following question is by Choi Yonghyun from KB Securities. Please go ahead.
[Foreign language]
Yes. I actually have three questions for you. First, I would like to know about your CapEx plans in 2023 for the TVING platform. Second, you mentioned plans to liquidate or securitize some non-core assets. I understand that some of those assets were interest bearing, and you were incurring certain interest costs. Should you explain the plan further and the impact? I was not able to list, hear the third question very clearly, but I think the question was, will they be preparing or providing full year, next year, full year guidance?
예, 티빙 양지은입니다. 먼저 질문하셨던 콘텐츠 투자 규모에 대해서 답변드리겠습니다. 어, 22년 대비해서 티빙 오리지널 콘텐츠 투자는 어, 비슷한 규모로 어, 지탱을 어, 계획 중입니다. 저 조금 더 말씀드리면 글로벌 그 스튜디오들과의 공동 투자, 파라마운트 같은 글로벌 스튜디오들과의 공동 투자 등을 통해서 어, 규모는 좀 키우지만 제작비는 2022년 수준으로 유지가 가능할 것으로 예상됩니다.
Yes, this is Yang Ji-eul from TVING. I would like to take this question about how much we intend to invest in our TVING original content. The plan is to keep it similar to 2022 levels, while we'll be growing the scale of the content by working together with global studios like co-investment, we believe we will still be keep the production costs flat and similar to 2022 levels.
두 번째 질문에 대해서 좀 큰 틀에서 답변을 드려야 될 것 같은데요. 저희 2022년에 투자도 많았고 그러면서 이제 투자에 대해서 차입 조달을 했었습니다. 또 2022년 전체 이제 손익실적이 안 좋기 때문에 재무 부담이 늘어있는 건 사실이고요. 부채비율이 137% 정도 될 것 같고 그다음에 순차입금도 한 KRW 2 trillion이 넘어간 상태입니다. 분명히 재무구조 개선에 대한 상당한 필요성이 있고, 그 방안에 대해서는 저희가 상장 주식도 있고 그다음에 부동산도 있기 때문에 그 두 가지를 포함해서 좀 심도 있게 검토를 하고 있습니다. 검토하고 올해는 상당 부분 좀 실행을 할 것으로 그렇게 계획하고 있습니다.
Regarding the second question, I think I will be able to answer but just at a high level. It is true that over the course of last year, we did implement a lot of investments, and we incurred a lot of borrowing to fund those investments. Because our overall PNL results were not favorable in 2022, it is true that we do feel a very keen need to enforce stronger financial soundness. Our debt ratio is 137%. Our net borrowings is now over KRW 2 trillion. We do see definitely the need to make our financial position more stronger.
As to exactly how we will be implementing that, we are doing an in-depth examination of our various asset holdings, including listed securities and also real estate property as well. The plan at the moment is to execute on the initiative for the most part within this year.
예. 추가적으로 뭐 한 가지 부연을 좀 말씀을 드리면 저희가 뭐 주식이고 이게 있는데 특정 주식에 대해서 매각이 결정된 바는 없음을 말씀드리고 싶습니다.
Just to add, although we do hold, certain, securities, we have not made any decision in terms of the disposition of any specific stock holdings.
네, 저희 23년 가이던스 제시가 없는 부분들에 대해서 간단히 좀 말씀 좀 드리겠습니다. 어, 지금 저희가 사실은 대외 환경이 굉장히 불확실하고 사실상 변동성이 높은 상황이기 때문에 앞서 저희 대표이사께서 중장기 전략 방향에 대해서 설명을 해주신 것처럼 조직 개편과 함께 새로운 전략 방향에 맞춰서 중장기 전략 방향을 지금 조직이 수립 중에 있습니다. 그리고 사업부별로 경영 계획 역시 아직 그 전략 방향에 맞춰서 수립 중이다 보니 현 시점에서 손익 가이던스를 제공해 드리기는 좀 어려운 상황임을 좀 이해해 주시면 감사하겠습니다.
Let me briefly address your third question regarding why there's no guidance provided by the company for 2023. There is a persistent uncertainty in our external environment and also rising volatility still. You heard our CEO about our new strategic direction in the mid to long term. We had an organizational restructuring already, and the different business units are working on different business plans in line with the revised strategic direction of the company. At this point, we seek your kind understanding that we are not able to provide a firm guidance about 2023 earnings.
다음 질문 부탁드립니다.
현재 질문을 요청하고 계신 분은 없습니다. 질문 있으신 분들은 전화기 버튼의 별표와 1번을 눌러주십시오.
Currently there are no participants with questions. Please press asterisk one, asterisk and one to give your question.
다음으로 질문해 주실 분은 CLSA의 김동진 님입니다. 질문해 주십시오.
The following question is by Kim Dong-jin from CLSA. Please go ahead.
질문 기회 주셔서 감사합니다. 저 한 가지만 여쭈어보고 싶은데, 그 Studio Dragon 관련 질문입니다. 저희 지금 글로벌 OTT 환경을 봤을 때 지금 구독자 증가 추이라든지 이런 것들이 좀 앞으로는 향상이 좀 쉬워 보이지는 않는다는 생각이 좀 들거든요. 지금 저희가 어쨌든 Capa가 지금 35,000 뭐 36,000 이렇게 올라온 상황에서
Yes. Thank you for the opportunity to ask a question which is directed to Studio Dragon. Given the current global OTT environment, just in terms of subscriber increase or down or decrease trends, overall, it does not seem quite easy to expect further upside in terms of users. With your capacity already up to 35 or 36 titles, how much further upside do you see remaining in terms of how many works you can produce in a given year? Yes. Our understanding is that amongst the global OTT platforms, there still remains very significant need for Korean content. It was on the basis of that underlying need that we are able to negotiate and enter into new contractual terms.
I think there might be a separate movement between demand for global content versus demand for Korean content specifically. We do expect that there could be change amongst the global OTTs, which is why we will be observing the developments quite closely and having discussions with appropriate partners as required on the appropriate volume.
The following question is by Lee Kihoon from Hana Securities. Please go ahead.
Yes. Thank you. I have three questions. First regarding TVING. While you have achieved very strong operating profits, KRW 70 billion from drama, I think TVING continues to weigh on the total business, recording what I think you explained last year as intentional loss.
Do you think that it is suitable to condone or to accept that kind of loss from TVING on an ongoing basis? Second, I think you mentioned that you intend to improve the profitability of the TVING platform, but I don't think you ever specified exactly how much loss it made last year. If you could clarify that. I think I remember that compared to more serious dramas, it's the lighter, you know, light-hearted works like variety shows and non-scripted content that tends to perform well. When the CEO mentioned globalization of content, did you also mean globalization of the non-scripted type content as well? Was it mentioned in that kind of context? The third question has to do with the fixed season-based programming.
I think we're seeing from other content producers like JTBC, that what happens with the seasonal work is that performance that is achieved in a given year tends to be pushed out into the following year's performance. It's recognized in or deferred in the next year, which is typical, typically what happens in the US industry. Is that the same concept that we will be expecting for CJ ENM as well? In terms of making our projections, actually, there was a lack of visibility or clarity. Do you think you could provide more clear strategic guidance going forward for greater visibility in making our projections? Yeah. This is Kay Choi. Let me take your question first about TVING, and then pass it on to Mr.
Yang Ji-eul for further answers. Although the detailed numbers may be slightly different subject to external audits, I would like to share with you our last year performance figures for TVing on a full year basis. Full year TVing revenue was KRW 250 billion with operating loss of KRW 119 billion. I understand where you question whether that kind of loss it should be acceptable or not. Going forward, you heard that we will increase the paid subscriber base to 5 million. When we assume that ARPU is about KRW 7,000-KRW 8,000 per unit, on an annual basis, it's about KRW 100,000 in average ARPU.
Basically 1 million new subscribers translates into KRW 100 billion in added revenue. I think, since the PQR for TVING is quite clear, you can use that as a reference. Mr. Yang took the following question. You asked about the globalization of our non-scripted content business. Well, while that is an initiative for us, that is not in the TVING context, but it is for the entire company at the wider CJ ENM level. Original TVING content, such as Our Blooming Youth or EXchange actually did very well when streamed on the overseas OTT platforms. We want to build on those strengths to further develop our TVING content. Those developments will also include globalization efforts as well.
We also want to achieve greater balance between the non-scripted, and the scripted drama in terms of, overall scale as well.
이번에 이제 서진이를 저희가 그런 부분들을 다 그 사전에 좀 준비를 하면서 성공적으로 지금 launching을 좀 할 수 있는 계기가 되었습니다. 이런 부분들을 저희가 지속적으로 사전에 좀 준비를 하면서 이 예능의 globalization을 조금 더 그, 광적으로 확대할 수 있도록 그렇게 준비를 할 예정입니다.
Launching jaelonching), and 'yejeong' ?
네.
I would like to elaborate further on the question of whether we want to take our non-scripted format content global. Well, we have received quite good feedback from Netflix recently about how they believe variety shows like non-scripted content from us from Korea can potentially be quite successful. We're working on Jinny's Kitchen, which is a new, you know, non-scripted content that we want to try out on our global OTT platform. We are thinking hard to make this a success, because when you consider, you know, taking these types of non-scripted formats global, there are added considerations. For example, the copyrights, especially for the OST. There has to be more advanced system in place to enable successful release and launch.
We are working on the preparations. I think we have the conditions ready to go ahead with a successful launch of Jinny's Kitchen. We will, going forward, we do want to scale the globalization efforts for the non-scripted content as well.
Fifth Season 답변드리겠습니다.
On your question regarding Fifth Season.
Fifth Season 2023년 실적 전망에 대해서 간단히 좀 말씀을 드리면, 2022년 같은 경우는 저희가 전체 이제 딜리버리 작품 수가 한 13개의 작품 정도 되었고, 그로 인해서 탑라인이 크게 확대를 하였지만 아직까지는 고정비가 고정비 관련으로 인해서 수익성이 많이 개선되지는 못한 상황입니다. 2022년 실적 같은 경우에는 약 매출 KRW 700 billion 정도, 그다음에 손익은 마이너스 KRW 40 billion 정도를 달성을 했고, 다만 이제 2023년에는 앞서 말씀드린 대로 이제 가이던스를 저희가 드리기는 좀 어렵지만, 실제 총 한 24편에서 28편 정도의 작품을 딜리버리 할 목표를 잡고 있고, 이 부분은 시리즈물뿐만 아니라 영화, 다큐멘터리를 다 포함한 전체 작품입니다.
그래서 특히 이제 시리즈물 같은 경우에는, 어, 일부 작품들이 시리즈는 그 시퀄 작품들이 포함되면서 실질적으로 마진율이 좀 개선될 것으로 좀 기대를 하고 있고, 전년 대비해서 딜리버리 작품 수가 확대했다는 탑라인이 증가하는 부분, 그리고 추가적으로 고정비를 지속적으로 저희가 효율화하기 위한 비용 효율화 과정들을 통해서 손익 개선을 지도를 하고 있는 상황입니다.
Yeah. I would like to take you through our performance in 2022 and our outlook for 2023. Over last year, the number of titles delivered were 13 in total, which led top line growth. However, because of the high portion of fixed costs, we have not been able to improve our profitability yet. Last year revenue was KRW 700 billion, and we recorded loss of -KRW 40 billion. Going forward in 2023. Although we are not able to provide guidance for the reasons that we explained, we do aim to deliver 24-28 titles in 2023. This will include not only series, but films and documentaries as well.
Because a lot of the series will include sequels, we do think that the margin profile will improve. As the number of titles delivered increases versus the prior year, this will help drive top line growth. As we continue to make our fixed cost structure more efficient, we think that that will also contribute to better profitability.
시간이 70분 정도 되고 있기 때문에 현재 그 질문 요청하고 계시는 한 분만 더 진행을 하면 어떨까 합니다. 다음 질문 부탁드리겠습니다.
Yes, because we are almost at 70 minutes, we will accept the final question from the analyst that is on queue.
마지막으로 질문해 주실 분은 CLSA의 김동진 님입니다. 질문해 주십시오.
The final question is by Kim Dong-jin from CLSA. Please go ahead.
네. 질문해 주셔서 감사합니다. 아까 질문 드렸던 부분을 좀 연장선상에서 추가적으로 질문드리면, 저희가 그럼 제작할 수 있는 Capa 능력을 봤을 때는 여기서 혹시 몇 편 정도 제작을 더 할 수 있을까요? 향후 2-3년 안에. 저희가 도달할 수 있는 제작 편수에 대한 가이던스를 좀 주실 수 있으면 좋을 것 같고요. 여쭤보는 이유는 지금 저희가 제작비도 많이 올렸고 제작 편수도 많이 오르긴 했는데, 리콤률이나 지금 오리지널에 대해서 받는 그 개런티 마진 자체를 올리는 게 생각보다 좀 어려워 보이고, 이게 이제 OTT 환경이 좀 안 좋아지다 보니까 저희가 여기서 얼마만큼 올릴 수 있을지에 대한 좀 의구심이 생기는데. 솔직히 저희가 계속해서 이제 제작 편수를 늘려 나가야 되는 입장이라면 좀 어느 정도까지, 향후 2-3년 사이에 올릴 수 있을지 좀 러프하게라도 이제 제작사의 Capa 측면에서도 말씀해 주시면 좋을 것 같습니다. 감사합니다.
Yes. I would just like to ask a follow question as an extension to earlier question of mine. If you take into account your current production capacity, how many more titles do you think you could potentially deliver in a year when you look out the next 2-3 years? If you could provide some guidance on the total number of works that could be delivered, I think that would be quite helpful. I ask because there's been an increase in production costs, also number of titles have increased. Given the difficult OTT environment overall, it does appear to be very challenging to really increase the guarantee margins any further. There are some question marks regarding whether that would be possible.
If we assume that that is the case, and then you have to increase the number of titles, how much further upside do you see remaining? If you could provide just in rough terms how much more you could do, given your capacity, I would appreciate it. Yes. On a full year basis, given our capacity, the question was how many titles we could potentially produce. I would say it would be about 35 titles, give or take, or plus minus, alpha, on bank, on top. If you look at the individual dramas though, each actually have been growing in terms of scale.
Even if we don't grow on the number of titles beyond a certain number per se, we will be introducing larger scale premium content, which will increase our presence and market share on the market. We're talking about dramas that are not only produced out of Korea, but for example, Big Door Prize, which was produced in the U.S. last year and set for release in March this year. There are also productions that were conducted in Japan as well. Those overseas productions will also provide added volume to boost both top line and bottom line growth. Also, in terms of our margin structure, I think you had some questions about, you know, how much favorable margins we could increase with our OTT original works.
Actually, in terms of our negotiations with the major platforms recently, we have finished our negotiations with those platforms on much improved contractual terms. Especially when we negotiate directly with the U.S.-based platforms, we have been signing at much favorable terms. I think if anything, the market environment is quite favorable for us. AVOD,
Yeah.
I...
ID.
ID. I think you asked, or you mentioned some concerns over saturation of the OTT market. The market that we are looking at, we believe is still in the very early growth phase. Even when we say we're targeting 5 million paid users for the TVING platform, when you include the 22 million households in Korea, 45 million internet user base, overall, I think there's significant upside remaining for phase 2 of our growth in subscribers. Very low penetration across the Asian market as well that we can tap. Certainly, we are seeing signs of change in terms of the business models of the platforms moving toward, you know, cracking down on ID sharing or introducing AVOD, for example, which we believe can have an impact on subscriber trends.
We are of course, examining those types of developments closely. That is also precisely the reason that we have focused so much on our B2C platform.