Past and Future
The CJ Group (Chairman Lee Jae-hyun) has revealed its long-term vision of breaking into the global top 10 tier in the cultural industry. The company also made known its specific blueprint to take the country’s brand value up a notch, especially by successfully commercializing Hallyu.
The CJ Group hosted a media seminar at the CJ HumanVille, in Pil-dong, Jung-gu, Seoul on Sept. 2. At the seminar, the CJ Corp.’s President Lee Chae-Wook made a presentation about the company’s vision for cultural enterprises and its global strategy. In particular, the seminar highlighted the significance of a cultural industry as a national economic resource, and also the CJ Group’s last 20 years of achievements.
To begin with, Lee provided specifics of the vision by saying, “CJ plans to increase the revenues from the CJ cultural enterprises to 15.6 trillion won [US$13.1 billion] by 2020.” He also said, “CJ will play a pivotal role in making the cultural industry the next engine of growth that will feed the Korean economy.”
The seminar highlights that CJ affiliates in cultural divisions such as CJ E&M, CGV, and CJ Hellovision are positioned to increase last year’s revenue of 3.6 trillion won (US$3.0 billion) by four times, and will enter the tier of the top 10 countries by 2020. For reference, Lee also pointed out that by 2020, Comcast, the current world’s number one company in the cultural business, and Walt Disney, the second, are expected to post 87.5 trillion won (US$73.5 billion) and 69.2 trillion won (US$58.1 billion), respectively.
The seminar also noted that the CJ Group is pursuing an aggressive strategy for expansion. CJ CGV is expected to expand its market from 6 countries (South Korea, the U.S., China, Vietnam, Indonesia, and Myanmar) to 12 countries. CJ also plans to increase the number of its theaters based in China and East Asian countries from 1,637 to 10,000.
In the meantime, CJ is also working to enhance its position as a global company by establishing 80 percent of the company’s theaters in foreign markets and deriving 65 percent of the company’s revenue from foreign sales. The company said that once this goal is achieved, the current size of the market, which amounts to 100.3 million, will increase to 700 billion by 2020. Moreover, by then, CJ will enjoy 8 percent of the world’s theater market.
[[{"fid":"12630","view_mode":"body_image_right","fields":{"format":"body_image_right","field_file_image_alt_text[und][0][value]":"The last 20 years of CJ’s achievements.","field_file_image_title_text[und][0][value]":""},"type":"media","link_text":null,"attributes":{"alt":"The last 20 years of CJ’s achievements.","height":176,"width":450,"class":"media-element file-body-image-right"}}]]To this end, CJ E&M is currently focusing on developing content familiar to foreign audiences and producing intellectual property (IP) that will help enhance CJ E&M’s status as a global company with a comprehensive range of cultural content. As far as the film industry is concerned, CJ plans to significantly expand the scale of production and distribution channels in China and East Asia. Currently, CJ is engaging in co-production and distribution with local partners in China, Vietnam, Indonesia, and Thailand, which result in the yearly production of 8 films that generate 15 percent of the revenues from CJ’s film business. The film division of CJ is expected to gradually increase the number of joint productions with a view to raising the proportion of the revenues to 60 percent. Overall, CJ seeks to transform the structure of the company’s revenues by increasing the size of overseas sales vis-a-vis domestic sales. This is the same as the broadcasting business, as the company seeks to expand through joint ventures with foreign media partners. In music and performances, CJ also seeks to expand in a variety of ways and secure the company’s IP rights.
Chinese and Vietnamese film companies produced a remake of the Korean flim “Miss Granny.” Also, the Korean musical “Finding Mr. Destiny” became a hit in China and Japan, and was made into a book. As such, CJ made it known that it will continue to pursue a one-source multi-use (OSMU) strategy. Through OSMU enterprises, CJ E&M plans to increase the contributions to total revenue from the current 8.5 percent to 43 percent by 2020. CJ also seeks to spread platforms for performances such as the Mnet Asian Music Awards (MAMA), and K-Pop Convention (KCON) by inviting more countries for hosting. The company also made it known that it plans to assist domestic SMEs in establishing overseas sales channels.
CJ embarked on the culture enterprise in 1995 by making a 300 million won (US$251,922) investment in Dreamworks. The amount almost equaled 20 percent of the annual revenue of the company at the time. Despite strong opposition from other members of the executive team, Lee Jae-hyun, CJ Group chairman, pushed ahead with the strong conviction the “culture is CJ’s new future.” An insider said that for the last 20 years, CJ has transformed from a company specializing in food into a company with comprehensive cultural content. Today’s CJ would have been impossible without a commitment of top management.”