A Returner’s Successful Investment Method - Chapter 606



Only Krnovel

Episode 606 Netplay (2)

A meeting co-hosted by Netplay and the Contents Association was held at the Five Seasons Hotel.

CEO Rad Herrington attended the event and met content creators and reporters.

At this event, CEO Herrington expressed his love for Korean content.

“I believe that good stories have the power to transcend times and borders. Korea is a place that has proven that belief. Korean content has tremendous power. The beautiful scenes and excellent storytelling captured the hearts of people around the world. Also, Korea has many great actors and great directors. “I’m already excited to see what kind of content will capture my heart in the future.”

The reason Netplay initially invested in Korean content was to target the Asian market.

However, Korean content was popular not only in the Asian market, but also in North America, South America, and Europe.

In particular, the global success of Seven Rounds led to increased interest in and viewing time for Korean content in general.

Now Korea has become a country that cannot be overlooked when it comes to content production.

The biggest advantage is the low production cost.

The cost to produce a drama or movie is one-tenth of that in the US or UK, making it very cost-effective.

CEO Herrington also announced future investment plans.

“Netplay has grown together with Korean production companies, and we plan to continue to grow together in the future. “We will invest more than $3 billion over the next five years.”

$3 billion is more than double the amount Netplay has invested in the Korean market so far, and is the largest content investment by a single company.

The stock prices of entertainment companies expected to benefit from the news of large-scale investment fluctuated.

The political world was quick to throw in the towel.

The New Politics Party praised President Geum Yang-seop for attracting the investment, while the Our People’s Party gave credit to each party, claiming that the investment had already been scheduled when Namgoong-seok was president.

But not long after, a new article was posted.

[Continue Capital announces investment of $5 billion in Korean content production!]

(strategy)

Production companies expressed both expectations and concerns about Netplay’s $3 billion investment plan.

An official from a drama production company expressed concern about this.

“If you receive investment from Netplay, the IP will permanently belong to Netplay. No matter how successful the content is, the profits the production company receives are not large. Additionally, the production of Season 2 or spin-offs must all follow Netplay’s decisions. “If we do something wrong, the Korean content industry could be reduced to a subcontract base for Netplay.”

In fact, Netplay has long been at the forefront of the global content market.

Since Netplay provides services worldwide and already has economies of scale, there is virtually no risk of loss.

On the other hand, most domestic OTTs are recording losses.

As a result, movies and dramas with large production costs are only looking at Netplay investment and have no choice but to unconditionally follow the conditions set by Netplay.

Korean content is very popular around the world, and there is no law preventing another work like Seven Round from being released.

The $3 billion investment in Netplay may be due to confidence that it can generate that much profit.

However, one day after Netplay’s investment announcement, Continue Capital’s Korean branch also announced its content investment plan.

The plan is to invest $5 billion over the next five years.

Continue Capital has already invested in a number of Korean entertainment companies and is a leader in the CG production field.

Surrill Screen, created based on Legend Games’ game engine Surrill Engine 5, significantly reduced CG costs and time, contributing greatly to improving the production environment.

Currently, surround screens are rapidly replacing green screens.

Director Tak Dong-sik welcomed Continue Capital’s expansion of investment.

“When producing Seven Rounds, we received investment proposals from both Netplay and Continue Capital. The reason we chose Continue Capital was because we could jointly own the IP. Additionally, the production company has priority over the use of IP, so they can use it in any direction they want. If the IP had been handed over to Netplay at this time, it would not have made the same amount of profit as it does now. IP is the source technology of the cultural industry. In the case of France, the IP monopoly of OTT investment content is limited to three years and the IP is forced to return to the production company at the end of the period, but Korea has no related laws.”

The market was excited again by this news.

-LOL It’s been less than a day since there was talk of Netplay investing $3 billion, and Continue Capital is talking about $5 billion.

-You’re crazy. Continu Capital really has a lot of money.

-$5 billion is a penny for Continue Capital.

-Production companies are welcoming the creation of an investment company that can compete with Netplay.

-Receiving investment from Continue Capital is much more advantageous because you don’t have to hand over the IP.

-If Seven Rounds had been a netplay exclusive, director Tak Dong-sik wouldn’t have made a single penny. However, thanks to securing the IP, they earned over 100 billion won.

-Is it a competition for content investment from now on?

-I think I need to ride the netplay shit a little more.

* * *

I spoke with director Tak Dong-sik on the phone.

“What is the reaction?”

[The atmosphere is welcoming to everyone. This opens the way to escape dependence on Netplay. Above all, I think the best thing is that there is no need to hand over the IP.]

Seven Rounds showed how far a drama can go if it is successful. Watching this, everyone must have realized the importance of IP.

“Have you heard CEO Herrington’s proposal?”

[yes. When I heard the amount, my eyes widened.]

The biggest reason CEO Rad Herrington came to Korea was because of the Seven Round Season 2 contract.

There is no problem with charging a high price for Seven Rounds.

Netplay’s biggest concern is that Seven Rounds Season 2 will be transferred to a competitor’s exclusive content.

They are offering a large amount of money to prevent this.

But in my opinion, this alone is not enough.

“Thank you for entrusting me with the authority to negotiate. As I said before, the amount you receive right away may be slightly reduced. But I think doing it this way will yield more profits in the long run.”

Director Tak Dong-sik agreed with what I said.

[I was a little shaken by the large amount of money, but I agree with what the team leader said. All content must be paid for.]

* * *

I met a white man in his 50s who came to the office with senior Dongho.

“nice to see you. “This is Lard Herrington.”

“welcome. “This is Lee Dong-ho.”

“Nice to meet you. “This is Hanmiru.”

He is the founder and CEO of Netplay.

He is the person who grew Netplay, which started as an online DVD rental store, into the world’s largest OTT and huge media empire.

We said hello and sat down.

Senior Dongho greeted me warmly.

“Is this your first time in Korea?”

“This is my second visit. “It’s a great place to come back to.”

I told him.

“I heard that they discontinued their DVD rental service some time ago.”

“yes. It was left on symbolically for a while, but it was discontinued due to the decrease in users and the cost burden of maintaining the service. I feel somewhat saddened by the discontinuation of the service that has been in place since the company was first founded. Lastly, we advised customers to keep the DVDs that could not be returned.”

If they had continued to stick to the existing service, they would have disappeared into history along with Megabust, which was once the largest DVD rental store franchise in the United States.

The current growth was possible because it changed with the times and technological advancements.

Who would have thought that an online DVD rental company that was founded less than 30 years ago would go toe-to-toe with Dazuni, a content powerhouse with 100 years of tradition?

Worse yet, Dazni, feeling threatened by the growth of Netplay, stopped providing its own content and launched its own OTT Dazni Plus.

Unfortunately, it is lagging behind in competition with Netplay.

Of course, what is important here is the exclusive work produced with our own investment. OTT companies are not pouring money into producing original works for nothing.

Senior Dongho said.

“You announced an investment of $3 billion this time.”

“That’s right. Korea is very important to Netplay. They have created many amazing works, and I have high expectations for what they will create in the future. “I thought it was a fairly large investment, but it did not reach the size of Continue Capital’s investment.”

As Continu Capital’s announcement of a $5 billion investment was made a day after Netplay’s announcement of a $3 billion investment, the media and public’s attention was focused on Continue Capital.

From his perspective, wouldn’t he have taken it as a slap in the face?

In fact, there was no such intention.

I said looking at him.

“We are also very interested in the content market. “We plan to initially start with Korean content and increase investment in the United States and Europe in the future.”

CEO Rad Herrington looked surprised.

“Are you sure that Continue Capital is planning to launch a new OTT?”

“no. “I have no intention of doing so.”

The OTT market is already saturated.

Netplay, Disney Plus, AMZ Prime, NPL TV, HOB Max, FULU, etc.

There are many OTTs in Korea alone, but only a few of them make a profit.

The gap with NetPlay is also gradually widening. In the first place, the content industry cannot be established by just pouring money into it.

Could it be that Disney, AMZ, and Enplay are falling behind in competition with Netplay due to lack of capital?

Producing and servicing quality content requires a certain amount of know-how.

Also, as there is a lock-in effect, it will be difficult to move from netplay even if a new OTT comes out.

The important thing is that even if you win the competition, you won’t have much to eat.

No matter how big the movie and drama market is, it is nothing compared to the game market.

“We just support production and secure IP. “We can supply this to various OTT companies, including Netplay.”

In other words, it will act as a content provider.

Of course, there will still be many companies that would like to receive investment from Netplay.

But just having another competitor would allow production companies to negotiate better terms with Netplay.

On the other hand, from the perspective of net play, the conditions will have to be raised accordingly.

“What we want is for the content to be served at a reasonable price.”