Expectations Rising for China’s Lifting of Ban on Korean Content

The author is an analyst of NH Investment & Securities. She can be reached at hzl.lee@nhqv.com. -- Ed.

 

Expectations rising that China’s ban on Korean content will be lifted

China’s ‘implicit’ ban on Korean content was first imposed in early-2017, and since that time, four years have passed with hopes always lingering that the ban will be lifted. Since the restrictions were never official, there should be no official end to them. What we expect is that once China-Korea relations improve, Chinese media outlets should resume broadcasting of Korean content There have been some signs of that the restrictions are easing. For example, in early-2018, the Chinese government-sponsored media covered Korean drama ‘Misty’, and in 2020, Chinese ads featuring Korean pop idol G-Dragon were broadcasted. In addition, the largest Chinese travel agency, Ctrip,has begun selling Korean travel packages.

Positive news being heard more frequently

Recently, positive news inflow from China has become more frequent In 2H20, Studio Dragon recorded Chinese sales, and at end-2020, Tencent announced a W100bn equity investment in JTBC Studio. At end-Feb 2021, China’s CCTV1 News reported that China Media Group and KBS have signed an MOU for broadcasting cooperation over content, media technology, and management. In early-March, it was expected that Catman, a movie featuring a popular K-pop idol, would be released. Although the opening was cancelled abruptly, it is still clear that the amount of positive news flow is on the rise.

Which dramas to be sold to China?

1) Works featuring Korean wave stars

Unlike Netflix, which values originality of works, Chinese OTTs tend to prefer works featuring Korean wave stars. We note that most dramas exported to Korea prior to 2017 have in common the fact that they feature Korean stars that are popular in China. Thus, once the ban is eased, such works should be in strong demand from Chinese OTTs.

2) Works by content makers owned by Chinese OTTs

We also note that many of Korean dramas broadcasted in China prior to 2017 were invested partly by Chinese firms. Given such, once the ban is eased, we believe works by content makers owned by Chinese OTTs will be the first to be exported to China.

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