Chinese money flows into South Korean entertainment

By Park Sae-jin Posted : February 17, 2016, 17:15 Updated : February 20, 2016, 13:31

AOA's Sulhyeon   [Photo by Yoo Dae-gil = dbeorlf123@]



South Korea's entertainment circle has been busy luring Chinese fans, mindful of the growing popularity of K-pop stars, actors and actresses in the world's most populous country and a sharp increase in China's media contents market.

Latest figures are not available, but data from the Small and Medium Business Administration showed that more than one trillion of Chinese money had been invested in South Korean computer games and entertainment programs as of September last year.

This year, Chinese investors are putting money more aggressively into music, TV soap and movie productions, allowing them to exercise a greater influence in South Korea's entertainment industry.

Inarguably, many industry watchers attribute an inflow of Chinese money into South Korea's entertainment industry to the huge popularity of K-pop stars and artists in China, but some say Chinese firms are more interested in the skills or learn from experienced South Korean partners to diversify their own business portfolio.

"Because China's entertainment market is immature, an investment here will provide a chance for Chinese investors to acquire advanced skills and know-how quickly from their Korean partners," Lee Ja-Hyun, head of South Korea's FNC Entertainment IR team, told Aju News, adding their investment here is certain to bring about good returns back in China's fast-growing but competitive entertainment market.

"This is not a temporary trend ... as building contents in culture is a time-consuming job," she said, adding China's entertainment market lags far behind South Korea's in all but movie production.

The fast influx of Chinese money into South Korea's entertainment market was noticeable in November 2015, when FNC, which houses top comedian Yoo Jae-suk as well as CNBLUE, AOA and other top Korean celebrities, said it would receive an investment of $290 million from a subsidiary of China's Suning Universal Media.

Suning Universal, engaged in e-commerce, electronics distribution, real estate development and entertainment business, will acquire about 1.7 million shares from FNC for $290 million that will help the Korean company to jump-start its business in China.

This year Chinese investors have come more aggressively, led by Yue Hua Entertainment which disclosed a plan to open its unit in South Korea to expand its participation and investment in cinema, drama and entertainment programs.
 

Kim Go-eun(left) and Park Hae-jin(right) have gained musch popularity in China with drama "Cheese in The Trap[Photo by Yoo Dae-gil = dbeorlf123@]



Yue Hua has already partnerships with South Korean companies -- YG Entertainment, Pledis Entertainment, and Starship Entertainment. In 2014, it produced UNIQ, a five-member Chinese-Korean boy group, in partnership with Starship which manages the girl band Sistar.

Chinese e-commerce giant Alibaba also agreed to acquire a four-percent stake for 35.5 billion won ($29.8 million) from South Korea's major showbiz group SM Entertainment for partnership in e-commerce and music. The alliance is part of Alibaba's strategy to bolster its entertainment business since the Chinese company jumped into the online music industry by forming a music group in July last year.

Alibaba and SM will work together in online music distribution, marketing and merchandising in China. For its part, SM promised to localize and expand its business in China.

The most visible but symbolic deal came in early February when Shanghai ISPC, an investment company founded by the Shanghai city council, announced a $8.23 million deal to buy Soribada, South Korea’s first generation music service provider which started off as a peer to peer (P2P) music sharing service provider in 2000. With its file sharing service recognized as illegal, Soribada changed its course to provide music streaming and downloading service in 2007.
 

Twice's member Tzuyu[Photo by Yoo Dae-gil = dbeorlf123@ ]



China's growing influence in South Korea's entertainment market was highlighted by a Twitter storm in January over Chou Tzuyu, a 16-year-old Taiwanese member of girl band Twice managed by JYP Entertainment, one of South Korea's three biggest management companies.

An old clip showing Tzuyu holding the Taiwanese flag in an online-exclusive portion of MBC variety show "My Little Television" sparked fury among Chinese viewers and SNS users, forcing JYP chief Park Jin-Young to apologize for "mismanaging" artists.

Tzuyu also stopped her activities in China and apologised through YouTube under pressure, but JYP's website was shut for several days by a suspected DDos attack from Taiwanese people who resent China's claims on their island and want to be called Taiwanese rather than Chinese.

The flag row came on the heels of growing competition among South Korean entertainment firms to make inroads into China, fueling concerns about a possible fallout. But Chinese K-pop fans and Internet users have been wise enough to stop it from escalating further.

Internet access to Tzuyu was once restricted in China, but her performances could be seen freely now as her popularity surged across Asia, becoming a sought-after guest on TV shows and even the cover girl for South Korean mobile carrier LG Uplus.

FNC's Lee predicted that cooperation or partnership between South Korean and Chinese entertainment firms would be stepped up down the road, ruling out the possibility of Chinese investors eating uncontrollably into South Korean markets.

"It's not easy for Chinese capital to eat into South Korea's market, which is armed well with experienced personnel and know-how."

by Lim Chang-won and Park Sae-jin
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