Here with us, we have our CEO, Ho-sung Kang, and Heads of different business divisions. With us is Mr. Chun Kyu Park, CFO, Woojin Lee, EVP, Yoonhong Kim, CSO, Ki-sung Hong, IT Business, Sungkak Lee, Content Solutions, Sung-bae Park, Commerce, and Ms. Si Yeon-jae from Pictures, and Hyunsoo Kim from Music. We also have Co-CEOs, Kim Jey-hyun and Kim Young-kyu from Studio Dragon. We also have Yang Ji-eul from TVING. From Endeavor Content, we have two CEOs, Chris Rice and Graham Taylor.
먼저 CEO 강호성 님의 주요 성과 및 전략 발표가 있겠습니다.
First, our CEO, Ho-sung Kang, will deliver our major results and strategies.
안녕하십니까? CJ ENM 대표 강호성입니다. 2022년 상반기 CJ ENM은 글로벌 사업 경쟁력을 크게 강화했습니다. Studio Dragon과 Endeavor Content 등 Studio 자회사들은 글로벌 콘텐츠 IP를 확대했습니다. 특히 미국을 포함한 글로벌 시장에서 콘텐츠 영향력을 지속적으로 확대했으며, 음악 사업 역시 일본 라포네를 중심으로 아티스트 해외 사업을 강화했습니다.
Good afternoon. This is CEO Ho-sung Kang of CJ ENM. CJ ENM greatly enhanced its global business competitiveness in the first half of 2022. Our studio subsidiaries, including Studio Dragon and Endeavor Content, increased their global content IP. Our content influence expanded in global markets, including the US, and our music business also was fortified centering around Japan's Lapone.
디지털 콘텐츠와 OTT 플랫폼 성장 전략을 강화해서 변화하는 미디어 환경에서 사업 주도권을 확대해 나가고 있습니다. 디지털 채널의 트래픽 고성장과 광고 매출 확대도 지속하고 있습니다. TVING 역시 콘텐츠 라이브러리 확대는 물론 가입자 확대를 위한 사업 제휴도 성공적으로 진행했습니다.
The company continues to expand business leadership in the changing media environment with a strengthened digital content and OTT platform growth strategy. The rapid expansion of digital channel traffic and ad revenue continues too. TVING has successfully increased its content library and business alliance formation to increase subscriber bases.
하반기에는 독보적인 콘텐츠 경쟁력과 사업 포트폴리오 강화에 기반한 수익성 제고에 집중하겠습니다. 콘텐츠의 hit ratio를 더욱 높이고, TVING의 가입자 및 시장 점유율도 압도적으로 확대하겠습니다. Commerce 역시 브랜드 및 GMV를 강화해서 수익성을 높이겠습니다.
In the second half, the company will focus on profitability improvement based on stellar content competitiveness and stronger business portfolio. CJ ENM will further improve content hit ratio and exponentially increase TVING subscriber bases and market share. Our commerce business will also improve profitability with enhanced brands and GMV.
그동안 CJ ENM은 국내 사업 우위에 안주하지 않고 꾸준하게 글로벌 사업 확장을 위한 전략 실행을 지속했습니다. 이제 해외 시장 확대의 성과들이 하나씩 구체화되고 있는 만큼 하반기에는 보다 뚜렷한 사업 성장을 보여드리도록 임직원 모두 최선을 다하겠습니다. 항상 CJ ENM의 성장을 지지해 주시는 주주 여러분께 깊은 감사 말씀드리며 마치겠습니다. 감사합니다.
CJ ENM was not complacent with our dominant domestic position and continued our global expansion strategy. Now, we are seeing our efforts reach fruition. The staff and management at CJ ENM will do our best to see more concrete business growth in the second half. In concluding, I thank the shareholders for always supporting our growth. Thank you.
다음은 Endeavor Content CEO Mr. Chris Rice와 Mr. Graham Taylor의 사업 전략 설명이 있겠습니다. 페이지는 4 페이지입니다.
Next, we will be moving on to page four. We will be hearing an address by our CEOs, Chris Rice and Graham Taylor, from Endeavor Content.
Hello, my name is Graham Taylor, Co-CEO of Endeavor Content, and along with my fellow Co-CEO, Chris Rice, I would like to thank all of you for listening today. We're thrilled to be here and to join the incredible CJ ENM family. Chris and I share a deep conviction that the synergies and strategic advantages of combining CJ ENM's Asian footprint and Endeavor Content's US and growing European footprint will create great value over the coming years.
안녕하십니까? 저는 Endeavor Content의 공동 CEO Graham Taylor입니다. 공동 대표 Chris Rice와 더불어 오늘 시간 내주신 것 감사드립니다. 훌륭한 CJ ENM의 가족 일원이 된 것과 이 자리에 같이 하게 됨에 정말 기쁩니다. 저와 Chris는 CJ ENM의 아시아에서의 존재감과 Endeavor Content의 미국과 유럽 내에서의 역할을 결합함으로써 생기는 시너지와 전략적 장점이 향후 큰 가치를 창출할 것을 굳게 믿습니다.
In the process of spinning out our business from our former parent company, we were blessed to have many options, and we truly believe CJ ENM was the best strategic owner for us. The synergy of global projects and sharing our collective IPs presents a great market opportunity, and we've already begun with more than a dozen synergy projects across film and television and development between the Endeavor Content and CJ ENM teams.
우리의 옛 모회사로부터 사업을 분리하는 과정에 저희한테 주어진 많은 옵션이 있었고, CJ가 우리의 최적의 전략 파트너였다는 것을 믿었습니다. Global Project의 시너지와 양사의 IP 공유는 엄청난 시장 기회를 만들어 줄 것이고, Endeavor Content와 CJ ENM 팀은 이미 영화와 텔레비전 분야에서 열 개 이상의 시너지 프로젝트 개발을 시작했습니다.
Thanks, Graham. Together, Graham, myself, and our team have built a scaled studio from scratch. Our core business is television and film production and ownership, as well as third-party television distribution. We also have growing businesses in documentary, music soundtrack, music publishing, and events. We recently financed and launched production businesses in the UK, Canada, Australia and Scandinavia, with more to come.
As a scaled independent, our model is to supply content to all the premium global platforms as well as to local single-territory linear networks, local single territory streaming networks, and traditional theatrical distributors. Because of our scale, we're generally able to retain the underlying ownership of our IP as well as many downstream rights. In addition to shorter term production margins, this also allows us to create a long-term valuable library, both for Endeavor Content and CJ ENM.
예, Graham 씨 감사합니다. 우리는 무에서 규모의 스튜디오를 세웠습니다. 우리의 핵심 비즈니스는 TV와 필름 제작과 오너십, 그리고 제삼자 TV 배급입니다만, 다큐, 사운드트랙, 음악 퍼블리싱과 이벤트 쪽으로도 사업이 커가고 있습니다. 최근 영국, 캐나다, 호주 그리고 스칸디나비아에서 제작 사업을 시작하고 파이낸싱 했으며 추가적으로 일을 진행할 것입니다. 저희는 규모 있는 인디펜던스로서 우리 모델은 모두 국제적 플랫폼과 싱글 테리토리 리니어 네트워크, 스트리밍 네트워크, 그리고 전통적인 극장 배급업자들에게 콘텐츠를 제공하는 것입니다. 우리의 규모 덕에 IP와 다운스트림 권리를 다수 유지할 수 있었습니다. 단기적 제작 마진 외에도 이 구조 덕에 Endeavor Content와 CJ ENM을 위한 귀중한 라이브러리를 구성할 수 있습니다.
Over the last several months, we've had a historic first for Endeavor Content, with seven movies being in production at the same time after having just received three Oscar nominations early in the year for our title, The Lost Daughter. A few weeks ago, we received an EC record-breaking 27 Emmy nominations across our production, distribution and documentary groups, which is more than any independent media company, including Sony, our number one independent TV studio competitor.
Across the five-television series that we premiered in 2022 so far, four out of the five have been picked up for a second season. We also had a limited series, which is a show that is only ever intended to be one season, extended to make a sequel.
While last year's Omicron surge delayed productions across the industry, impacting our deliveries for this year, we've had an incredible pipeline of shows and films, either in production or in preparation for production for 2023 delivery.
지난 몇 달 동안 최초로 동시에 일곱 편의 영화 제작에 들어갔고, 또 얼마 전 연초에 The Lost Daughter로 세 개의 오스카상에 호명되었습니다. 몇 주 전 제작 배급 그리고 다큐 그룹이 우리 역사상 최고인 스물일곱 건의 에미상의 후보로 올랐습니다. 이는 인디펜던트 미디어 회사로서 우리의 가장 강력한 인디 TV 스튜디오 경쟁자인 일위 Sony사보다 많은 숫자입니다. 2022년에 첫 방송한 다섯 개의 TV 시리즈 중 네 편이 이미 시즌 2가 정해졌습니다. 또한 한 시즌만 계획되는 리미티드 시리즈를 연장해 후편을 만들게 되었습니다. Omicron 때문에 업계 전반의 제작이 지연되어 딜리버리에 영향이 있었지만, 제작 중이거나 2023년 딜리버리 계획으로 제작 준비 중인 엄청난 쇼와 영화의 파이프라인이 준비되어 있습니다.
Few companies have assembled a slate with the level of movie star and brand name directors for all the major platforms in the way that Endeavor Content has. With the continued need for star-driven US and global content, and the recent massive increase in global audience engagement around Korean language content, we truly believe that as part of CJ ENM, we are best positioned to both grow organically and build inorganically through acquisition, the largest scaled global independent studio over the coming years. Thank you for your time.
소수의 회사만이 모든 주요 플랫폼에서 높은 수준의 배우와 유명한 감독들을 모을 수 있습니다. 스타 위주의 미국과 글로벌 콘텐츠 니드, 그리고 또 최근 들어 글로벌 시청자가 대폭 늘어난 한국어 콘텐츠의 위상을 보면, Endeavor Content는 CJ ENM의 일원으로서 유기적 성장 그리고 인수를 통한 성장으로 향후 몇 년 안에 최대 규모의 인디 스튜디오가 될 수 있는 최적의 입지에 놓인 회사라고 생각합니다. 경청 감사합니다.
다음은 실적 발표입니다. CJ ENM 분기 및 연간 실적 발표의 주 재무제표는 K-IFRS 기준 연결 실적임을 참고해 주시기 바랍니다. 그럼 2022년 2분기 경영 성과 발표가 있겠습니다.
Now, the results presentation. CJ ENM's quarterly and yearly result numbers are K-IFRS consolidated numbers. Now, 2022 second quarter results presentation.
네, 안녕하십니까? CJ ENM 재무담당 황장묵입니다. 2분기에 CJ ENM의 연결 매출액은 1조 1,925억 원으로 전년 대비 31.3% 성장했으나, 영업이익은 556억 원으로 35.2% 감소했습니다. Entertainment 부문은 콘텐츠 판매 매출 고성장에 힘입어 매출 8,408억 원, 영업이익 361억 원을 기록했으며, Commerce 부문은 매출액 3,517억 원, 영업이익 195억 원을 기록했습니다.
Good afternoon. This is Changmuk Hwang from CJ ENM's Finance team. Our consolidated revenue in second quarter stood at KRW 1.1952 trillion, which is a 31.3% growth year-over-year, but our OP saw a decrease of 35.2% at KRW 55.6 billion. Thanks to the rapid growth of content sales, Entertainment recorded a revenue of KRW 840.8 billion with operating profit of KRW 36.1 billion. Revenue for Commerce stood at KRW 351.7 billion with operating profit of KRW 19.5 billion.
하반기에는 콘텐츠 제작 및 글로벌 유통 확대를 통한 성장을 목표하겠습니다. 미디어는 콘텐츠 hit ratio 및 original content를 강화하고 있습니다. 커머스는 상품 포트폴리오를 통한 수익성 회복을 목표하고 있으며, 영화 사업의 극장 뮤지컬 라인업 강화 그리고 음악은 자체 아티스트 음반 출시와 콘서트 매출을 확대할 계획입니다.
In the second half, the company will aim for growth driven by content production and increased global distribution. Our Media business is working on the improvement of content hit ratio and original content enhancement. Commerce aims to see a recovery of profitability through product portfolio. Our Pictures and Musical businesses will strengthen lineup, and Music business has plans to increase in-house artist album release and concert revenue.
다음 육 페이지, Media입니다.
Page six, Media.
이 분기에 Media BU 매출액은 7,228억 원으로 전년 대비 58.4% 증가해 탑라인 성장을 지속했습니다. 콘텐츠 경쟁력에 기반한 TV 광고 성장과 TVING 매출 성장을 비롯해 콘텐츠 판매 매출도 고성장을 기록했습니다. 반면, 영업이익은 254억 원으로 전년 대비 56% 감소했습니다. 글로벌 및 OTT 사업 성장 과정에서 일시적으로 수익성은 감소했으나 Endeavor Content의 글로벌 콘텐츠 판매 매출 증가 및 손익 개선 등 사업 펀더멘털을 강화했습니다.
Second quarter Media business recorded a revenue of KRW 722.8 billion, which is a 58.4% growth year-over-year, continuing its top line growth. Content sales revenue also grew fast based on strong TV ad sales that came with content competitiveness and also with TVING revenue. However, operating profit decreased 56.0% year-over-year at KRW 25.4 billion. Profitability saw some temporary erosion with global and OTT business expansion, but the business fortified its fundamentals with increased global content sales revenue from Endeavor Content and profit structure improvement.
하반기에는 프리미엄 IP 확대를 통해 수익성 강화를 목표하겠습니다. 채널 및 OTT 그리고 디지털 채널을 강화하고 있으며, TVING 역시 Paramount+, Endeavor Content 그리고 Original Library 강화를 통해 가입자 확대에 집중할 계획입니다.
The business will aim to strengthen profitability through premium IP expansion in the second half. We continue to enhance channel, OTT, and digital channels. TVING will focus on subscriber increase with Paramount+, Endeavor Content, and original library fortification.
다음 칠 페이지, Commerce입니다.
Page seven, Commerce.
이 분기에 Commerce BU 매출액은 3,517억 원으로 전년 대비 1.6% 감소했으며, 영업이익은 195억 원으로 34.7% 감소했습니다. 오프라인 활동 증가 등의 영향으로 Live TV 트래픽은 감소했으나 자체 브랜드 중심으로 디지털 매출은 증가했습니다. 전년 대비 이익률 감소가 불가피했으나 하반기에 고마진 상품을 통한 수익성 회복에 집중할 계획입니다.
Commerce business unit revenue for second quarter stood at KRW 351.7 billion, which is a decrease by 1.6% year-over-year. OP at KRW 19.5 billion saw a decrease of 34.7% over the same period. With more offline activities, Live TV traffic decreased. However, digital revenue increased centering on private brands. Profit rate decreased over the previous year, and it was inevitable that the business will focus on profitability recovery with high margin products in the second half.
하반기에는 뷰티, 건강기능식품 등 고마진 상품군을 강화하고 자체 브랜드에 집중할 계획입니다. CELEBSHOP과 펀샵 등 브랜드 디지털 샵을 통해 자체 브랜드의 유통 채널을 확대하고, 취급군을 강화해 수익성 회복을 목표하겠습니다.
The business will strengthen high margin products including beauty and health supplements and focus on private brands. Distribution channels for PBs will expand through brand digital shops such as CELEBSHOP and Fun Shop. The business will aim to restore profitability with stronger GMV as well.
다음 팔 페이지, 영화입니다.
Page eight, Pictures.
이 분기에 영화 BU 매출액은 256억 원으로 11% 감소했습니다. 브로커, 헤어질 결심의 개봉에도 불구하고 국내 박스오피스 부진에 따른 영업손실 41억 원을 기록했습니다. 하반기에는 추석 시즌에 공조2: 인터내셔널 개봉을 비롯해 극장 및 뮤지컬 라인업을 강화하고 수익성 회복에 집중하겠습니다.
Pictures business revenue decreased 11% to KRW 25.6 billion. Despite the release of Broker and Decision to Leave, with lackluster domestic box office, the business recorded an operating loss of KRW 4.1 billion. The business will focus on profitability recovery with the release of Confidential Assignment 2: International, timed for the Lunar Thanksgiving holidays, and also a musical lineup. Next, page nine, Music. Music business recorded a revenue of KRW 92.4 billion in second quarter, which is an increase of 41.3% year-over-year.
Operating profit also saw healthy growth at KRW 14.8 billion. Japan's Lapone's profit contribution was notable, and the healthy sales of INI and JO1's album led revenue and profit growth. In-house artists' overseas album releases and concert tour in Japan will further enhance our global business.
KCON in US and JO1's Japan arena tour is planned as is ENHYPEN's world tour. The business will sustain its growth momentum through more global concerts. Next, we will be hearing the presentation from Studio Dragon.
Good afternoon, CEO Kim Jey-hyun from Studio Dragon. I will brief you on second quarter 2022 management results. Revenue in second quarter recorded KRW 157.5 billion. The number of titles aired increased by seven to 13 titles. The results were good for dramas, including Our Blues, that also led to good overseas sales.
With that, our revenue grew by 48.5% year-over-year. Our operating profit recorded KRW 27 billion. Based on stronger bargaining power, we were able to improve the sales conditions of our new and library titles.
With sales to new OTT platform services, we were able to grow our OP by 95.7% year-over-year, recording the best ever number with good growth. The company will continue platform expansion both home and abroad in the second half. We will continue to expand the number of titles centering on global OTT originals and pre-buys. In particular, things are becoming more concrete with our first Hollywood drama, The Big Door Prize. With this, our localization strategy centering around US will roll out in earnest.
Our first half focus on digital and global will add more substance in the second half and lead our growth going forward. Thank you. Now, we will be moving on to our Q&A session. Given the time constraints, please limit your questions to three each, centering around core issues. Now, Q&A session will begin.
Please press star and one, star sign and one, if you have any question. For translation, please press star two, that is star and two, on your phone. The first question will be given by Yoo In-cheol from Citi Securities. Please go ahead.
안녕하세요, 씨티증권의 유인철입니다. 질문 기회 주셔서 감사합니다. 저는 두 가지 질문이 있는데요, 모두 Endeavor하고 관련된 질문입니다. 첫째로, 이 분기에 Endeavor 매출액이랑 OP 어느 정도 기여했는지 궁금합니다.
Yes, I have two questions for Endeavor Content. Well, what is the level of revenue and operating profit contribution to CJ ENM in the second quarter by Endeavor Content? I heard that there were some influences to your business because of COVID in the first quarter. So, what was your contribution like for the second quarter? And how do you foresee your revenue and profit numbers in the second half? This was the first question that goes to EC. Now my second question also goes to EC.
In your presentation, you've mentioned that you have already embarked on dozen or more IP sharing projects with CJ ENM. Could you please elaborate more on these projects and how is your expectation for the above-mentioned projects? And are you working together with any other OTTs on these projects?
So I would like to ask CFO Park to address the first part of your question, and then we will also be inviting the CEOs from EC to give their forecast on the second half of this year and also on their plans. On the second question, well, we would also like to hear from Studio Dragon, followed by EC.
Yes. Now on the revenue numbers, it stood at KRW 224.6 billion. Compared to the KRW 117.1 billion in first quarter, it's an improvement by 91%. As for operating profit, it's a negative KRW 6.2 billion. But compared to the previous period of minus KRW 17.8 billion, it's an improvement by KRW 11.6 billion.
So far, the contribution is not that big, but as was mentioned by Chris in his presentation, well, Endeavor Content has an excellent delivery lineup planned, and the plan is going well without any glitches. As was mentioned in the first quarter, the lineup, the number of titles, it's somewhere between 13 to 15. When all these projects are delivered, we do foresee a good profit contribution from Endeavor Content in the second half. Yes. We would also like to hear some comments from EC.
Sure. Yeah. I mean pipeline. You know, as we mentioned, you know, we obviously recognize, you know, revenue and profit on delivery of shows. The timing of shows is crucial for that. The delays created by COVID last year, you know, impacted that, but we have a robust and growing pipeline, both for now and certainly for the future. We've got, you know, some phenomenal projects going into production and in prep for next year.
So, you know, feeling good about the pipeline. On your second question in terms of the synergy CJ, these are all development projects at the moment. You know, typically, development projects will take maybe 12 to 18 months in that cycle. We're feeling great about, you know, both about the way the teams are working together, but also about the prospects.
The combination of the fact that, you know, both Korean language setting the audiences on fire, as we would say, around the world, you know, that trend combined with, you know, some of our work in being able to blend languages in shows, I mean, for example, Tokyo Vice, which we released earlier this year on HBO Max in the US and networks around the world, is a kind of perfect example of a high budget premium show. In that case, you know, it was 50% English language, 50% Japanese language, approximately.
You know, certainly the largest television production to take place in, you know, in East Asia by budget size. You know, it's the sort of confluence of all of these trends and, you know, that gives us a huge amount of optimism for, you know, what CJ ENM and Endeavor Content can do, both on the premium end, but also just on the volume end, you know, over the next two to five years.
아까 말씀드렸다시피 저희의 매출 인식은 딜리버리 시에 인식이 되고 있습니다. 아까 말씀드렸던 코로나의 영향으로 인해서 딜레이가 있어서 이와 관련돼서 저희 수치가 영향받은 것은 사실입니다. 이렇게 말씀드렸지만 아까도 말씀드렸다시피 저희 파이프라인이 굉장히 훌륭하고, 현재 파이프라인도 그렇지만 미래에 저희가 기대하는 작품들도 훌륭한 작품들이 예정이 되어 있습니다. 엄청난 프로젝트들이 제작 단계에 있거나 아니면 제작 전 단계에 있고, 2022년, 2023년에 걸쳐서 딜리버리가 될 것입니다. 저희 CJ ENM과 같이 하고 있는 시너지가 어떤 게 있나. 아까 디벨롭먼트 프로젝트에 대해서 말씀을 드렸던 거고, 이 디벨롭먼트 프로젝트는 통상적으로 12개월에서 18개월의 사이클을 따르고 있습니다. 이렇게 말씀드렸는데 지금까지 저희가 우리 양사의 팀이 협업하는 방식을 보면은 굉장히 긍정적이고 고무적인 징조를 많이 보고 있고, 우리 팀들이 만들어낼 콘텐츠에 대해서도 저희 전망이 굉장히 좋습니다. 전 세계적으로 한국어로 된 콘텐츠에 대한 니드가 엄청나게 증가하고 있고, 열광적으로 사람들이 원하고 있습니다.
그리고 또 과거 우리의 도쿄 바이스와 같은 타이틀을 보신다 하면 저희가 HBO 맥스랑 같이 일했던 그 타이틀인데, 우리가 양국의 언어를 블렌딩하는 탁월한 역량을 가지고 있다라는 것이 이미 증명이 되었고, 그리고 또 이 두 개의 언어 이상을 블렌딩한 콘텐츠가 전 세계적으로도 잘 통한다라는 것이 도쿄 바이스를 통해서 잘 증명이 되었습니다. 고예산이 들어갔던 타이틀이었고, 그리고 또 프리미엄 쇼였고, 그리고 또 영어와 일본어의 비율이 반반 정도로 사용되었던 그런 콘텐츠인데, 예산 면으로 보자면은 동아시아권에서 최고, 최대의 예산으로 TV 제작에 들어갔던 타이틀이라고 말씀드릴 수 있습니다. 따라서 저희가 CJ ENM과 같이 협업하는 분야에 대해서도 저희가 굉장히 크게 낙관을 하고 있습니다. 프리미엄 콘텐츠이다. 그리고 또 볼륨 면에서도 저희가 대단히 큰 기대를 하고 있는 게 사실입니다.
네, 공동 제작까지 답변을 주셨기 때문에 Studio Dragon에서 추가적인 공동 제작 관련해서 설명 부탁드리겠습니다.
I would like to hear more from Studio Dragon on the co-production side of things.
네, 이미 Chris님이 충분히 답을 해주시긴 했는데 조금 더 저희가 협업하는 구조에 대해서 설명을 드리면, Endeavor가 갖고 있는 IP를 저희가 어댑트해서 제작하는 방식도 있고요. 그리고 Studio Dragon이나 저희 ENM이 만들어 놓은 영화나 드라마의 IP를 이제 미국 드라마로 아예 리메이크하는 이런 방식의 협업도 지금 진행하고 있고요. 그 외에 원작 소설이나 아니면 핵심적인 크리에이터를 놓고 아예 그냥 원작 그 기반으로 혹은 이제 기획 개발 아이템을 양사가 공동으로 개발하는 방식으로 아예 그 초기 단계부터 같이 기획 개발 형태로 해서 한 세 가지의 트랙을 놓고 지금 활발하게 기획 개발을 하고 있습니다. 특히 Studio Dragon이나 ENM 영화 부분 다 같이 지금 미국에서 저희가 본격적인 드라마를 제작하는 데 있어서 Endeavor와의 시너지 부분에 있어서 굉장한 기대를 가지고 있습니다.
Yes. Chris has already well covered the way we collaborate with each other, and there are mainly three tracks that we go by. First, Studio Dragon can bring in IP of Endeavor Content and use it here in the domestic market. Secondly, well, we have our drama and also movie IPs, which Endeavor could use in their territory. The two companies can both. The two studios can work from scratch with new IPs and with new works from our creators, starting with novels or other IP sources.
We could from scratch co-develop and co-plan new titles going forward. Well, Studio Dragon and CJ ENM's pictures business, we've been embarking in earnest on drama creation in the US territory. In the process, we could really enlist the help and enjoy the synergy that we do have with Endeavor Content.
네, 다음 질문 부탁드리겠습니다.
Next question, please.
다음으로 질문해 주실 분은 대신증권의 김혜재님입니다. 질문해 주십시오.
The following question is by Kim Hoi-jae from Daishin Securities. Please go ahead.
네, 안녕하세요. 대신증권 김회재입니다. 저도 Endeavor Content 추가로 좀 질문드리면, 공동 제작하는 형태를 세 가지 방향으로 말씀해 주셨는데 그래도 구체적으로 어떤 작품을 지금 준비하고 있다라는 게 하나 사례가 있으면 좀 더 와 닿을 것 같은데, 공개 가능하시면 설명 부탁드리고요. 그리고 Endeavor Content가 올해 12개에서 15개 정도 라인업 준비한다고 해주셨는데 좀 더 길게 한 3에서 5년 정도 목표로 중장기 라인업 수랑 뭐 매출 전망해 주시면 상당히 도움이 될 것 같습니다. 그리고 두 번째는 오늘 그 실적 전망 공시에서 매출 전망은 4,800억으로 상향하셨는데 영업이익은 2,700억으로 유지하시는 거에 대해서 설명 부탁드리고요. 그다음에 마지막으로 Studio Dragon 관련해서 질문이 있습니다. 올해 그 Netflix랑 3년 계약이 종료되는데 재계약을 하실 건지, 뭐 하신다면 어떤 식으로 추진하실지가 좀 궁금하고. 저희 PT 자료에 보면은 뭐 2분기 실적 관련해서 협상력이 강화됐다라는 표현이 있는데 이건 어떤 건지도 궁금하고요.
그다음에 그 페이지에 저희 OTT 공급하는 그 상대방 중에 Amazon Prime이 있는데, 혹시 계약된 작품이 있으면 공개 좀 가능하시면 설명 부탁드리겠습니다. 감사합니다.
Yes. Once again, question goes to Endeavor Content. Studio Dragon now has mentioned the three types of joint works that you could engage in or the three tracks. If you can elaborate on these tracks, and if you could give us any concrete examples, that would much be appreciated. The pipeline, the number of 13, 15 was mentioned during the presentation and during the answer. What is the projected mid to long run lineup number of titles, perhaps in three to five years? And what is the expected revenue generation from these projects?
Now, the question goes to CJ ENM. You have upward adjusted the revenue outlook, but the operating profit guideline or projection, it remains the same at KRW 27 billion. Why is that so? That was my second question.
Now my other follow-up question goes to Studio Dragon. I know that your contract with Netflix is nearing this closure. Do you have any plans to renegotiate a contract with Netflix? And if so, on what terms and conditions? Once again, question to Studio Dragon. In your presentation, you've mentioned about a stronger bargaining power with platforms. Could you please elaborate on what you mean by stronger bargaining power? On page nine of your presentation, I think there was some contract mentioned with OTTs, Amazon Prime, I think it is. Could you please give us more color on that contract as well?
I would like to ask Endeavor Content to address the first question, and I would like to ask CJ ENM CFO to address the second question, followed by the third answer, which will be addressed by Studio Dragon.
Sure. This is Chris again. You know, not gonna get into much detail on this, I'm afraid. Just, you know, it's very early on in the development cycle and certainly not gonna get into revenue projections on these shows at this stage. You know, what we can say is, you know, we've acquired together with either Studio Dragon or CJ ENM Studios, you know, multiple bits of IP, books, et cetera, that we have bought together and, you know, are starting to develop in script stage.
You know, we've taken multiple existing film and television titles where we are either sort of treating them as a format and readapting them, you know, for a different market or where we're kind of taking an extension of you know of what that existing film or television title is. There are quite a few different lanes and you know feeling really good about you know about that pipeline.
Now to the second part of your question, which was on our guidance revision. As you've mentioned in our disclosure, we have upward adjusted our revenue guidance by 11.8% at KRW 4.8 trillion. Was mainly due to consolidation of Endeavor Content numbers. However, having said that, our operating profit guidance remains the same at KRW 27 billion. As was mentioned during the presentation, the contribution, profit contribution from Endeavor Content in the first half is yet limited.
So that is the reasoning behind us maintaining our previous position when it comes to our OP projection. However, in 2023, we will see more contribution in terms of profit from TVING and EC. With that, we will be seeing an adjustment to OP guidance as well. Third answer, please. Yes.
Well, it's true that Netflix and other global OTTs do want our content, and we are, as you've mentioned, negotiating with the various OTTs in our supply of content to the OTT platforms. As for the details, I'm afraid I cannot disclose them today. As was mentioned, there are more platforms nowadays that wishes to get from us our content. With that, we're seeing, as contracts work favorably for us. We're working together with Netflix so that we end up in a win-win situation. I believe that more details will be added in the third quarter, and we hope to finalize our contract then.
As for our negotiations with Amazon Prime or our contract with Amazon Prime, we are currently working on it, and it would be new titles plus library titles that Amazon will be getting from us. But we have yet to add more details to this contract as well. Once the things are more finalized and become more concrete, we will be officially disclosing that back to the market.
Next question, please.
The following question is by Ahn Ji-na from EBEST Investment & Securities. Please go ahead.
전체 이 정도 규모 중에서 일단 한 백억 정도는 일회성 항목이고, 그다음에 한 이백억, 백오십에서 이백억 정도는 다음 사분기에도 발생할 수 있는 항목이다라고 볼 수 있겠습니다.
Now, on non-operating losses. In second quarter, the number, I believe, is somewhere around negative KRW 39 billion. Of that, 20 billion is related to impairment of our copyright. Every half year, we re-evaluate the value of our copyright and reflect it on our books. That amount this time stood at somewhere around KRW 20 billion. About KRW 10 billion was to do with our M&A or investment in Endeavor Content.
The deal has been completed in the first quarter, so with that, M&A related expense of KRW 10 billion has been reflected in our second quarter numbers. This is one of the things that would not occur again. Other, you know, loss numbers are related to more current items, such as donations and non-distributable related losses.
Once again, the KRW 10 billion related to M&A is a one-off thing that you won't be seeing a recurrence of. In the fourth quarter, once again, with the copyright impairment, you know, reflection in our books, you would see a similar level of, negative numbers in, or negative influences for our numbers amounting to somewhere around KRW 15 to 20 billion.
네, 음악 사업 부탁드립니다.
Now, answer from the music business.
안녕하세요. 음악 사업 맡고 있는 김현수입니다. 우선 음악 사업에 관심을 가지고 질문을 해주셔서 감사합니다. 답변을 드리겠습니다. 음악이 저희가 이제 호실적이 지속되고 있고요. 하반기에 질문 주신 ENHYPEN 및 라폰의 소속인 JO1, INI도 아레나급 투어를 일본 내에서 20회 이상 저희가 계획하고 있고 지금 실행 예정에 있습니다. 그리고 질문 주신 ENHYPEN은 첫 월드 투어인 Manifesto를 지금 성황리에 진행이 되고 있고요. 그렇게 했을 때 수익 정산이나 배분 부분은 지금 저희가 세부적인 내용이고, 첫 투어다 보니까 지금 협의 중에 있습니다. 협의가 완료되는 대로 저희가 공유할 수 있도록 하겠습니다. 그리고 내년 및 향후 신인 그룹 확대 전망에 대해서 말씀을 드리면, 저희가 질문 주신 ENHYPEN처럼 I-LAND 2를 계획하고 있고, ENHYPEN 후속 가수들을 I-LAND 2를 통해서 내년에 데뷔시킬 예정에 있습니다. 그리고 올해 진행한 Girls Planet 999를 통해서 탄생한 Kep1er와 같은 가수들을 내년에는 남성 가수들을 계획하고 있습니다.
그래서 Boys Planet 999를 저희가 런칭을 하고 내년도에 남자 그룹들을 저희가 IP들을 지속해서 생산할 예정입니다. 그뿐만 아니라 국내뿐만 아니라 글로벌은 HBO Max와 그 라틴아메리카 저희가 가수들을 발굴하는 그 프로그램들을 저희가 준비 중에 있습니다. 그래서 이제 음악 쪽은 저희가 그 신인뿐만 아니라 새로운 보이 밴드, 그다음에 여자 밴드, 그리고 글로벌리 저희가 활동할 수 있는 현지 라틴아메리카 가수 플러스 그 Produce 101 미국판 가수들 개발을 위해서 지금 현지 파트너들과 지속 협의하고 있습니다.
Yes, this is Hyunsoo Kim from Music Business. First of all, thank you for taking interest in the music business and for your questions. Well, as you rightly mentioned in your question, we are seeing back-to-back results, good results, for our music business. We have an arena tour for JO1 and INI with Japan's Lapone Entertainment, and there will be more than 20 rounds of concert or arena tours by these two groups. Yes, it's true that ENHYPEN has a global tour currently going on.
The global tour is titled Manifesto, so it's an ongoing thing. It's the first global tour by ENHYPEN. Because it's the first time ever, we are currently still in discussion on how to share profit. Once things are finalized, we will be delivering the information to the market.
As for our pipeline with our music business, yes, we do have plans for a new boy band girls group debut in 2023. ENHYPEN was discovered through I-LAND season 1, and we have plans for I-LAND season 2. Through I-LAND season 2, we'll be discovering and promoting a new girl group that will be making its debut in 2023. We have also seen the birth of Kep1er through Girls Planet 999. Likewise, we are readying ourselves for Boys Planet 999.
With Boys Planet 999, we're going to launch a boy band. We're currently in discussions and working together with HBO Max to discover Latin American singers as well. We do have this program currently being readied.
With all these programs being planned, we will be seeing debut of boy bands and girl groups and also global, singing groups, from Latin America and other regions. We also currently are in discussion and negotiation for a US version Produce 101 as well.
네, 시간은 좀 됐지만 현재 한 네 분 정도가 질문을 더 대기하고 계시기 때문에 이분들까지 좀 진행을 하는 게 맞을 것 같고요. 대신에 질문과 답변 조금만 컴팩트하게 부탁을 드리겠습니다. 다음 질문 부탁드립니다.
Next question, please.
다음으로 질문해 주실 분은 크레디트 스위스 증권의 김성환 님입니다. 질문해 주십시오.
The following question is by Kim Sunghwan from Credit Suisse Securities. Please go ahead.
Yes, I've got three questions. First is on TVING and Seezn merger. Will you be just simply merging with them to get more subscriber bases from KT? Or do you have any other strategy ready with the planned merger? Your projection for a subscriber base stand at 4 to 5 million by the end of this year. When you close the deal with Seezn, will this number see a change?
That was my first question related to a possible merger between TVING and Seezn. My second question and third question go to Studio Dragon. The sales revenue, while you projected a growth by about 60%, and I do realize that you have shown a solid result in second quarter.
However, my calculation gives the number growth number at 40%. How will you be able to meet the 60% goal that you have stated? Will you be stepping up your efforts even further to promote more sales in the second quarter? This is my second question that goes to Studio Dragon. My third question also goes to Studio Dragon. Well, in the PowerPoint presentation, I do not see numbers of asset under construction. What is the number?
This is CEO Yang Ji-eul from TVING addressing your question. Well, CJ ENM and KT, we are looking at various other strategic agenda items, including our works with TVING. Well, we are looking at collaboration with KT not only to increase our OTT subscriber bases or dominance, but we do have hopes for other synergy effects as well. As for the number of subscribers, we will be maintaining our goal of over 4 million by the end of this year.
In order to meet this target, we are thinking of various strategic directions, including our works with Paramount+ and various telecommunication companies and also with Seezn. However, there is toughened competition out in the market as well. There is rapid consolidation now ongoing, and there could be other unseen variables that pop up during our move toward the end of this year. The subscriber goal, I think we could make it, and we will be keeping a keen, active watch on the market to make things happen.
Now Studio Dragon.
Yes, our target 60% in terms of sales revenue. This year, our current level is somewhere around 40% for the first half. In the second half, we will be in earnest applying to external OTT the original contents for these OTTs. Active supply will begin in the coming fall. We also have a Hollywood project in place, The Big Door Prize. With that, I think we'll be meeting the goal set at the earlier part of this year at 60%. As for our asset under construction, last quarter number was at KRW 221.3 billion. In the second quarter, the number is more or less similar at somewhere around KRW 220 billion.
Next question.
The following question is by Yoon Chang-h ee from My First Asset Management. Please go ahead.
Yes. My question goes to Studio Dragon. Well, congratulations on your good outstanding revenue numbers. Along with the improvement in the revenue numbers, I also see that your production costs have rise. Is it because you pay more the actors, or is it because of raw material price increases and other elements? Or is it because you have more concentration on original content?
Yes, it's natural that the production cost rises with our revenue increase. Well, however, having said that, our cost number, it has seen good positive movem ent. Our profit rate, it has turned good or better. The production cost has seen a rise because of the increase in the number of titles that we produce.
Next question, please.
Currently, there are no participants with question. Please press star and one, star and one to give your question. The following question is by Park Kyung Min from KB Investment & Securities. Please go ahead.
Yes. There are concerns over the ad market in the second half. Could you give us your projection on the second half ad market? Now my second question is related to Endeavor Content and their PPA, purchase price allocation. I would like to know more about the PPA. Now, my third question goes to Studio Dragon. You've mentioned your US project, Big Door Prize, but are there any other pending US projects that you could talk about?
The Content Solutions team will be providing you with the answer for advertisement, and our finance team will be addressing your PPA question. Studio Dragon will be addressing your Studio Dragon question.
네, 안녕하세요. 저 광고 관련된 답변드릴 콘텐츠 솔루션 총괄의 Sungkak Lee라고 합니다.
Yes, this is Sungkak Lee from Content Solutions.
질문 주신 내용을 보면 일단은 전체적으로 올해 광고 시장을 좀 짚어볼 필요가 있는데요. 주요 방송 광고 시장이 상반기에는 그나마 전년 대비 약 5% 정도 성장하는 모습을 보였고요. 하반기에는 여러분들 잘 아시다시피 현재 코로나하고 그다음에 전쟁의 장기화에 따라서 환율, 그다음에 고금리, 국제 원재료값 상승 등으로 인한 삼중고로 인해서 경제 성장 둔화가 본격화하고 있습니다. 이에 따라서 지금 기업들의 마케팅 활동이 크게 위축이 되고 있는데요. 그러면서 하반기 방송 광고 시장이 상반기처럼 어떤 성장세를 이어나가지 못하고, 전년 동기 대비 약 -2% 정도의 역신장이 예상되고 있습니다.
Yes. Well, frankly, we saw 5% growth while year-over-year in the first half our broadcasting advertisement. In the second half, we believe things will turn more sour. As you're well aware, COVID still continues to be, and war is prolonged. With that, we're seeing a negative move when it comes to a foreign currency exchange rate, and the interest rate is also on the rise. We also see a lot of pressure when it comes to raw materials.
Globally, we'll be facing dire economic situation. With that, many companies will hesitate in their marketing spend. All things being said, we expect the broadcasting ad market to see a negative growth of -2% on a year-over-year basis.
따라서 이런 상반기하고 현재의 이러한 경기 상황을 보면, 연간으로 보면 방송 광고 시장은 한 +2% 정도의 소폭 신장이 전망되고요. 이런 방송 시장 환경하에서 저희는 지금 시장 환경 변화에 맞는 전략적 영업을 통해서 광고주들의 방송, 디지털 마케팅 예산을 확보하고요. 주요 대행사에 대해서 매출 프로모션을 통해서 경쟁사 대비 우위에 있는 매출 확보, 그다음에 시장의 MS 확대를 추진할 예정입니다.
Given the situation to date, we do expect to see the broadcasting ad market to show a very limited growth of 1% for the year as a whole. Given the current broadcasting advertisement market situation, we are going to strategically engage in ad slot sales. We're going to procure more share of wallet. All of our advertisers, when it comes to digital and broadcasting advertisement, and we also will launch various promotion activities with the agencies in order to procure our ad revenue and also to get more market share.
구체적으로 저희들의 상품 전략을 좀 설명을 드리면요. 먼저 퍼포먼스 상품인데요. 현재 좀 경기가 둔화되고 있기 때문에 기존 브랜드 광고보다는 광고주들의 매출에 직접적인 영향을 미칠 수 있는 효율 성과 중심의 상품들을 지금 저희가 시장에 선보이고 있고요. 좀 더 구체적으로 말씀드리면 i-AD라든지, 즉 소비자가 광고를 보고 직접 기업들의 포털이나 사이트에 들어가서 직접 상품 구매할 수 있는 상품인 i-AD, 그다음에 DIA TV의 라이브 커머스, 그다음에 CJ 유튜브, 저희들이 콘텐츠를 유튜브 계정에 올리고 있는데, 이러한 디지털 상품들을 강화하면서 저희 ENM 광고 매출의 시너지를 좀 확보할 거고요. 그다음에 저희들의 디지털 자회사들이 있습니다. 이러한 디지털 자회사와의 협력으로 퍼포먼스 광고 수주를 확대를 추진하고 있고, 방송 부분은 계속 말씀드린 바와 같이 저희들의 Anchor IP를 활용해서 일반 광고는 유지 확보하고요.
그다음에 맞춤형 광고 캠페인과 그다음에 저희들의 제작 조직들과의 협업을 통해서 광고주들의 브랜디드 콘텐츠를 많이 선보임으로써 콘텐츠 시청률에 크게 의존하지 않고도 안정적으로 매출을 확보할 수 있는 전략을 추진 중입니다.
If I may brief you more on our ad offerings strategy, we're going to concentrate more on performance ad offering because of the given bad or sour economic situation. Rather than focusing on brand advertisement, we're going to really promote the actual sales generation of our advertisers through i-ADs, which will give you a link to the company's portal and also through live commerce, through DIA TV, and also through the usage of YouTube.
We have a lot of digital subsidiaries under CJ ENM, and we would be also enlisting their help. For our Anchor IP, it would be maybe the general ads that are aired or when Anchor IPs are shown on the televisions. For more tailored ads, it would be more of a branded content approach. Yeah.
네, 이제 결론을 좀 말씀드리면요. 좀 전에 서두에 말씀드린 대로 올해 전체 방송 광고 시장은 +1% 내외의 성장이 전망되는데요. 저희 CJ ENM은 좀 전에 설명드린 그러한 상품 전략으로
As was mentioned, we do expect the overall industry or the market to see a limited growth of somewhere around 1%. With the above-mentioned strategies, we will be outperforming this number. We do expect to see a high single-digit growth number here. As for our market share, we believe that we will be going beyond the 22% mentioned.
Yes. Now to address your PPA related question. We have evaluated the PPA numbers, and we have yet to be delivered the final conclusion from the auditors, external auditors. However, since many people are quite interested in this subject, I will give you preliminary number. The amount that will remain as goodwill, it stands at KRW 420 billion, and we've begun amortization on PPA.
In the first half, the reflected amount stands at KRW 3.4 billion. Compared to our operating profit numbers, this is not a big amount, not a concerning number. In the second half, EC will begin in earnest with the delivery of the projects, and that will continue well into the future, starting from year 2023. The profit contribution from Endeavor Content will more than offset what we have spent on PPA.
Last question for Studio Dragon.
Yes. There are contents that were created and produced in Korea that was applied to the global OTTs, but others as well. We also have projects that will actually be produced in the US to be delivered to the audience there.
We have Soo Hugh, who starred in Pachinko, work with us together in a project, and currently we are in discussion with a platform for that project. We have begun planning and development of this project, and we are in various negotiation stages. There are other titles that we plan to pitch next, in the coming few weeks and in the coming few months.