![[IT돋보기] There is no other failure of’KT Media Hub’… ‘KT Studio Genie’ re-challenge](http://img.lb.inews24.com/facebookexternalhit/face/626x352/image_gisa/202101/1603864732909_1_164005.jpg "[IT돋보기] There is no other failure of’KT Media Hub’… ‘KT Studio Genie’ re-challenge")
We pause and take a deeper look at the pouring information and communication technology (ICT) issues. Through the’IT Magnifying Glass’, we will analyze more in-depth as much as the steps stopped, but make it easier to understand. [편집자주]
[아이뉴스24 김문기 기자] “From next year, we will make full-scale investment in content, and lead the change of home based on media platforms such as education, rest, and care.”
KT CEO Sue Su-mo (President) announced that he will focus on four areas at the first press conference after taking office following the’Digital-X Summit’ held at Grand Intercontinental Seoul Parnas Hotel in October last year. Was the first in the list.
At that time, next year, when a full-fledged investment in content was declared, has already arrived. As the first start, KT decided to establish a new’KT Studio Genie’ that will serve as a control tower based on the KT group media platform capabilities. It means that it is going to re-challenge six years after the failure of’KT Media Hub’, which was launched with the dream of a Korean version of Paramount in the past. It is an aspiration to take a second leap forward by taking the failure of that time as a mirror.
On the 28th, KT announced that it will establish’KT Studio Genie’, a content specialized company that encompasses investment, planning, production, and distribution. As the first CEO, Yong-pil Yoon, who is known as a content expert within the KT Group, will be the CEO of SkyTV. Following the receipt of corporate registration on the 28th, the company plans to start a full-fledged business in the first half of the year.
KT said, “Based on the strong media platform possessed by KT Group, KT Studio Genie will grow into the best content provider in Korea by strengthening collaboration with leading domestic production companies.” -We will take the lead in fostering content and expanding the ecosystem, and make content a new growth engine for KT Group.” KT’s representative media platform, IPTV’Olleh TV’, is expected to grow from 700 billion won in 2014 to 1.8 trillion won last year. Together with KT Skylife, a satellite broadcasting company that embraces cable TV operator Hyundai HCN, the total sales volume is about KRW 2.8 trillion. If the online video service (OTT) season and the realistic media (IM) are added together, it will reign as the overwhelming No. 1 operator, approaching 3 trillion won.
However, it is too early to be relieved. We are facing repeated internal and external challenges. A new type of OTT is driving disruptive innovation in the media market, centered on Netflix. Netflix is raging enough to rank second among domestic network traffic.
In addition, it is also a time of urgent need for a rapid shift in posture to cope with the content market, which is continuing across all fields regardless of field.
SK Telecom has formed a blood alliance with Kakao, and content cooperation between Wave and Kakao TV is taking place, and Kakao has decided to merge Kakao Page and Kakao M to promote global expansion based on its original IP, and Kakao Entertainment is launched. CJ ENM, which spun off a joint venture with JTBC, Teabing, is increasing its tax in cooperation with Naver. NC, a game company, is also working on the entertainment business.
◆ KT Media Hub collapsed in 2 years… Only risk left
This is not the first time that KT has established a subsidiary to promote the media business.
KT Media Hub, established at the end of 2012 by former KT chairman Seok-chae Lee with the ambition to achieve the Korean version of Paramount, is a representative example. KT Media Hub is recorded as an exceptional case that was spun off even in the process of mergers and acquisitions to create a media industry that could not spread its wings inside the telecommunications company.
At that time, KT continued aggressively. Kim Joo-sung, former CEO of CJ Entertainment, was recruited as KT Media & Contents (M&C) division head, and later appointed as the first representative of KT Media Hub. With the ambition to support content distribution, production and distribution in a turnkey manner, it has set an ambitious goal to enter the global market.
While starting a content fund raising business worth 100 billion won, it has fostered content producers by investing directly in small and medium media companies. With its strengths in service development and content distribution, it strived to enhance IPTV service and create new added value. Beyond simple investment, it aimed to become a content platform by gathering media infrastructures such as Sidus, Genie, and Ustream.
However, this ambitious goal broke its wings in two years. He declared that he would play the role of controlling the media business, but the actual role was only half.
KT’s paid broadcasting business had a head office in charge of IPTV sales and marketing, and KT Skylife in charge of satellite broadcasting. In other words, it was at the level of acting on behalf of the supply and demand of contents. In addition, its low presence compared to other related subsidiaries such as KTH also affected.
In addition, Kim Joo-sung, the former CEO of KT Media Hub, who had been leading KT Media Hub for one year, decided to resign in 2014 and lost the captain.
In the meantime, the discord within the group also adversely affected the business promotion. Internal dissatisfaction exploded as key personnel who were in charge of the media business at KT headquarters were converted to and incorporated into the KT Media Hub. The personnel who refused to switch to the end were scattered, but due to the nature of the media, when they returned to the KT media business-related department, unfamiliar situations occurred one after another. In addition, the decision-making proceeded smoothly, and the conflict amplified.
Accordingly, the former KT Chairman Hwang Chang-gyu, who was inaugurated as the next chairman, came to merge with KT Media Hub into the headquarters in 2015 to improve management efficiency and enhance synergy effects between businesses and increase sales.
A KT official said, “In the process of branching and integrating, many of the unfortunate talents left, but the remaining employees also experienced aggravated difficulties as the awkward accompaniment between large-scale employees continued with the launch of the new company at the time.” It was positive about the experimental challenge, but in conclusion, it was a failed business.”
◆ KT’s internal IPTV crash within 3 years… ‘Green light’ to boost stock prices by completing content value chain
Unlike KT Media Hub, KT Studio Genie has a different role from the form.
Although it is in the planning stage prior to its launch, it is not generally dividing KT’s related organizations to allocate roles, but rather establishing a completely new subsidiary to support KT Group’s media content business. In other words, like KT Media Hub, it is possible to minimize risks such as division of the organization or relocation of personnel.
As a platform business, IPTV’Olleh TV’, satellite broadcasting’KT Skylife’, OTT’Season’, music service’Gini Music’, as well as’StoryWiz’ as a source IP,’Sky TV’ with content production capability, content distribution And commerce-related’KTH’, advertisement solutions’Nasmedia’ and’Playdy’ are all supported to play their roles.
On this basis, KT Studio Genie focuses on content planning and production, distribution and content fund creation and operation, external cooperation and alliances, external investment attraction, and seeking and deriving a synergy proposal between group companies.
In other words, it gains advantages such as improving platform capabilities through original content, strengthening bargaining power related to partnerships with content producers, and activating content external investment.
Chang-hee Noh, Vice Center Director of the Broadcasting and Communications Policy Center, Media Future Research Center, said, “In the streaming service industry that is being read in the current trend, the fundamental competitiveness is the content, and the expansion potential is a core competency.” Explained.
From KT’s perspective, securing original IP content is the first step to complete a vertically integrated value chain. It is an advantageous structure to have a virtuous cycle of content investment because it already has a platform advantage with 12 million subscribers.
However, it is not possible to present only platform advantage. It is the appearance of a major transformation into content in the media market that was dominated by the platform in the past. The fact that KT has a sense of crisis, such as limiting the future of the IPTV business to three years, is also interpreted as the background for this challenge.
Moreover, in many cases where the content capabilities of each platform operator have a great influence on the stock price, KT, which has set a core goal of stimulating the stock price, is the key that the content business must hold. This is an example of content that preceded it as an indicator of future growth potential, which is read by Tesla as well as Netflix.
Kim Yong-hee, professor of business administration at Soongsil University, said, “It is possible to say that platform operators in various fields such as Netflix, Disney, Tesla, etc. are leading the innovation because their content capabilities support this.” In that sense, managing IP and producing unique content is a natural step,” he analyzed.
He added, “However, due to the nature of the media content business, large-scale investment must be preceded, and the authenticity of the actual business will be proved by the initial investment cost.”
In particular, it is important to attract external investment and cooperate with global operators. Sky TV is the previous example. Industry analysis is that if Sky TV had not had its own content production capabilities, it would not have been able to move forward with the establishment of a studio discovery joint venture with Discovery. It is expected that KT can become a foothold to create various cooperative relationships through’KT Studio Genie’.
On the other hand, KT Studio Genie plans to start a full-fledged business in the first half of the year after a preparation process for corporate operation. We are also actively seeking to recruit talent to reinforce expertise in content planning and production.
Reporter Moonki Kim [email protected]