However, CJ is further developing a new concept business called 'Media Commerce'. In the commerce part, it is strongly intended to combine the product sourcing capability of O Shopping with the content power of ENM, which will bring about synergy effects such as ultimate sales increase. On the other hand, the entertainment business is dominated by the fact that aggressive business expansion is possible compared to other companies through stable funding.
According to the report of CEO Score Daily (April 20, 2017), CJ O Shopping had a stable financial power to hold more than 640 billion won in in-house reserves as of 2016. In the position of CJ Group, the entertainment business, which is strengthening its capabilities in the group owner's family, is a field where such funds can be invested. (Note: Lee Kyung-hoo, the eldest daughter of Lee Jae-hyun, has recently been put into CJ ENM.) In addition, it is also worth noting that the company created an environment where funds can be injected immediately without going through a complicated borrowing process through Merger among affiliates.
Joint venture with Big Hit... to strengthen overseas capabilities vs. Minimize risk burden
One of the news that made the music industry buzz last week was the establishment of a joint venture between CJ ENM and Big Hit. It has already submitted a business combination report to the Fair Trade Commission for the establishment of a joint venture, and it is expected to launch as early as this month.
Until now, it has been reported that CJ ENM plans to discover the next generation Korean Wave artist by combining the know-how and production system of big hit overseas market that produced contents production ability + BTS. In addition, it is said that there is a plan to promote a global audition program.
CJ ENM, which has been strengthening its business not only in broadcasting but also in the music sector in recent years, is intended to fill the weak overseas market with the help of big hit compared to competitors such as SM, YG and JYP. In this process, the existing project of creating an idol audition program and forming a project group represented by the ProDeuce series is expected to expand beyond the domestic market to overseas markets.
Io Ai and Wanna One have enjoyed the popularity and topic of overwhelming the existing group, but they have a structural problem that they have to distribute the sales generated during the activity process to many places because they have selected trainees from the frontline agency. Due to the short period of activity and the limit of the team already set until the end, it was disadvantageous in overseas market.
In order to solve this problem, it is suggested that the company chose Big Hit as a partner to catch two rabbits, the Top Model of its overseas market, and the birth of its group that can be stable for a long time. In particular, it seems to have influenced the production ability of BTS that shook the world and the success of Top Model in overseas market, which they thought was reckless as they headed to the ground.
On the other hand, there are many opinions that Big Hit's successive joint ventures have been Choicesed to reduce the risk of raising the company independently. This is because SKT - SM - JYP alliance was formed in February and netmarble invested 2014 billion won in April, followed by a consistent trend of Choices CJ ENM as a partner. For reference, CJ ENM has already indirectly participated in big hit investments in that it is Netmarble's second largest shareholder (with 22% stock holdings following Chairman Bang Joon-seok, who owns 24%.
The company, which has been attracting attention from the public since its name was created last year, is also growing its size by managing the group Intuit and PromisNine, which were created through audition programs such as Mnet <Boy 24> <Idol School>.
Recently, there has been an attempt to reinforce the music production ability through the takeover of the stake in Pledis, a mid-sized agency. According to major economic media in June, CJ ENM takes over 51% of Pledis' stake. Officials of the company said, "There is nothing yet to be confirmed," but the prospect that CJ ENM and Pledis will take hands in any form is still dominant.
This is supported by the fact that Pledis personnel were involved in Promis Nine's debut and that Han Sung-soo Pledis is participating in the production of ProDeuce48, which is being aired recently, and that he is constantly collaborating with CJ ENM.
On the other hand, in the negative view, it also expresses concerns about the vertical integration of large corporations and the contraction of small and medium-sized companies. SM alone is growing up with various takeover Mergers as well as music as well as video business. Kakao is also well known for years, and the size of the company is also growing through M & A, a variety of entertainment agencies.
On the other hand, it is difficult to do business more in the position of small and medium-sized companies with relatively small size and low capital capacity. Although it is positive that ProDeuce101 caused syndrome, there were many criticisms that it actually reduced small-scale agencies to the level of manpower supply for audition programs. In this situation, there is a pessimistic prospect that if CJ ENM and other large companies continue to attack, there will be few small companies that have overcome it.
In fact, since 2016, when ProDeuce101 began, it has become more difficult for new groups of small and medium-sized companies to settle in the market. It is not easy to predict what CJ ENM will achieve. However, it seems clear that it will be the eye of the typhoon in the future.
CJ ENM, Big Hit - A wide-ranging move with Pledis .. Will it be the eye of a typhoon?