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Discourse on the content licensing industry Licensing Con 2020
  • February 24, 2021

Discourse on the content licensing industry
Licensing Con 2020

Licensing Con 2020, Korea’s only conference to discourse on the content licensing industry, took place online over three days from November 18th to 20th. The conference this year, marking its second year, dealt with the issues and countermeasures in the industry in-depth, focusing on the intellectual property (IP) business, the industry’s hottest topic this year. Let’s delve into the four exciting and informative conference sessions.

What does the “super IP” in 2020 look like?
- Junghye Ryu, Vice President of Kakao Page

A new strategy that Itaewon Class introduced

In the winter of 2019, it was announced that the legendary webtoon from Daum Itaewon Class will be made into a TV series. The trailer was shown on various media, attracting considerable attention, and its first episode aired on January 31, 2020, became a sensation in Korea. Junghye Ryu, the Vice President of Kakao Page, a story entertainment enterprise servicing webtoons, web novels, and movies on two different platforms Kakao Page and Daum Webtoon, explained in her lecture “What does the ”super IP“ in 2020 look like?” that Itaewon Class broke away from the conventional ways and organized a new campaign around the IP. “I established two goals while organizing the Itaewon Class Project. One was to raise the level of webtoons that people perceive. My first goal was to show that the webtoons have grown just like movies and TV series that are at the center of the cultural content. Another goal was to present a new form of webtoon experience, as a campaign of this scale had not been organized unlike for movies or TV series.” Kakao Page’s strategy was quite different from the conventional strategies used for webtoons. Before airing the TV series, they made a trailer to promote the original work. Where the original work featured motionless cartoon elements, the trailer fully utilized the background images that were based on real places to effectively convey the essence of the story. Not only this, but they also put up the ads on movie theaters and large shopping malls, launched emoticons using the webtoon characters, developed a cash card, and released an original soundtrack for the webtoon “Saeroyi” to promote the series extensively in new ways. Vice President Ryu said, “As the TV series succeeded, the readers for the original webtoon also increased. The webtoon that was completed in 2018 already had an outstanding record of the total number of readers of 7 million and total views of 250 million. However, after the campaign, the total number of readers and the views reached 15 million and 360 million, respectively. And this has boosted the cumulative sales from the IP by over 300%.”

Kim took part in the production with a bit of hope that the program’s good intention will be relived. Lack of data was completed after going through deep-learning processes following the dubbing of more than 800 sentences each with the voices of her peers. It was the result of Neosapience’s unique technical prowess plus the enthusiasm of professionals.

“Super IP universe”

Itaewon Class was indeed a flare for “super IPs”. It made us realized what a great synergy effect can a webtoon turned into a well-made TV series can bring forth. After the TV series ended, we saw it remaining in high ranks on Netflix in Asian countries. Vice President Ryu looked back on the proposal for ads from Mercedes Benz as the most meaningful event and introduced the story. “Mercedes Benz reached out to me saying they want to use the webtoon character, not the actor from the TV series, for their ad. When Mercedes released an electric car with the webtoon character as its model, I thought that was the turning point for us. That moment seemed like the beginning of the IP utilization.” Since then, Kakao Page started imagining what would happen if Kakao Page is introduced to the whole world, dreaming of new businesses that could rise from the market with original stories in the form of webtoons and web novels. Here, the strategic keyword they came up with was “super IP universe”. After Kakao Page learned the importance of a “super IP” from the success of Itaewon Class, they saw that it was necessary to secure super IPs that are “sustainable, repeatable, and with a structure” as a super IP that somehow made a hit by luck is simply meaningless. Kakao Page established a super IP strategy using the OSMU (One-Source Multi-Use) model but made a distinction from the existing OSMU model. They adopted a new approach of making various forms of content that share one worldview (universe). Steel Rain and Victory are examples of this. The webtoon Steel Rain was made into two films – Steel Rain and Steel Rain 2: Summit – already, and Victory is scheduled to be released on Netflix next year. “Previously, a film was produced based on the original webtoon, but in the case of Victory, we developed the webtoon at the same time as the film. The scenario for the film came out first and the webtoon shared the same worldview. Our strategy is different in this aspect. ”

Opening the K-story market

The number of works from Kakao Page and Daum Webtoon made into films or TV series since 2006 is 65, which is the same as the number of those to be produced in the next three years from 2021. This means the number of works to be produced will increase exponentially. Kakao Page plans to increase this number by jointly developing and investing in the original stories in the form of webtoon or web novel, which will be later produced as TV series or movies. Kakao Page is paying attention to the future K-story market and its potential. It is their dream and vision to create super IPs with partners in the film and TV series production industry to have an international impact and influence as they believe that Korea is able to lead the market for webtoons, an unprecedented market. Kakao Page has multiple original works to present to the world such as Sanae Matseon (A Business Proposal) and God of Blackfield. “K-story is a market that has not emerged yet, but I believe we can develop this market and make it a competitive one. Just as Park Saeroyi from Itaewon Class said, the K-story market will open as much as we imagine and expect. I hope that we could work together as we make this our reality with great partners.”


Crossfire Drama Key to success and future IP expansion plans
- Minjeong Baek, Director of Smilegate Holdings

China, the first target

The belief that an IP will last if everyone from children to adults can enjoy it and the IP that is loved by many can be made into a content business. With this belief, Smilegate, Korea’s top video game company with Epic Seven and Tales Runner, has jumped into the IP business with its global mega-hit game Crossfire, which has a billion users in 80 countries all over the world. The company has chosen China as its first target of the IP business of Crossfire and the TV series as its form of content. Director Minjeong Baek of Smilegate in charge of the IP business and marketing explained the background of their expansion to China, “There is no case of entering the Chinese market with the IP of a video game, so there is no example to benchmark after. But we learned that large American film production companies and distributors were interested in the Chinese market, so we gave it a shot as it seemed like a good opportunity.” Crossfire is a steady seller that has already achieved great results in China for more than ten years. It is matchless in the field of shooter games in the Chinese market. With the IP business as the opportunity, Crossfire was made into a TV series with 36 episodes and achieved total views of 1.8 billion. Thanks to the success of the TV series, the number of game users skyrocketed, accomplishing high performance in the game sector as well. “The key to the success of the TV series in China was respecting their culture as much as possible and adopting that in the show. Only with strict localization can we create content that can touch the heart of the game users and the TV series viewers. So from the early stage, we discussed intensively with the production company. The TV series episodes took place in 2008 and thanks to the screenwriter, the producer, and all other staff for their research, we were able to produce a great outcome.”


Visiting Hollywood

While working hard on their current business, Smilegate also has been continuously mapping out their future businesses by expanding their content through IPs and branding. Since five years ago, they started thinking ‘What if we expanded our video games into other areas?’ and challenged themselves to give TV series and film production a shot. Intending to launch a TV series in China and a film in Hollywood, they immediately started expanding their IP business. However, things were difficult from the beginning for film production. There was no case in Korea of successfully making a video game into a film. The brand awareness in China was significant due to a lot of Chinese users, but that was not the case in Hollywood. “We had no choice but to visit a production company in Hollywood and prove what a valuable brand Crossfire is. Since our content was military action content, we needed a production company that excels in action film production. As the outcome of our long-standing efforts, we landed a contract with Original Film, a company that produced the Fast & Furious franchise.” After choosing Original Film as their production company, Smilegate entered into a contract with a large distribution company, Sony Columbia Pictures. The plan was to kick off the production in January, but due to COVID-19, the production was halted temporarily. Director Baek gave the updates on the process saying the production will resume next year and the scenario is currently being revised. “There is a scenario for the game, but our biggest homework in creating the scenario for the film was that there was no lead character. To make content last for a long time, the story is important but it is crucial to have attractive characters. We are focusing on realistically depicting the characters to appeal to the audience.”


Flexibility as our weapon

The benefit of the IP of a video game lies in its flexibility. Novels and films cannot be modified once they are completed, but video games are different. When a good element comes up, it can be added to improve the quality of the content, and the content can also be upgraded by reflecting the users’ feedback. With the global users, the game already has a great value as an original IP. After its expansion to the TV series and film production, Smilegate took its IP business and moved on to the theme park business. They took the shooter game people enjoyed in a virtual setting online and brought it offline in a theme park where people can play laser tag shooting games by teaming up with their family and friends. The first one opened in Soho in China. With the second park under construction in Shanghai, the company aims to gradually increase the number of theme parks in China. Lastly, Director Baek talked about Smilegate’s future plans of further expanding their IP business by creative collaboration with other industries including F&B and fashion to raise brand awareness. “Smilegate aims to expand with the IPs that are loved rather than simply remaining as a video game company. We will do our best to create good content by using our IPs for Crossfire, Lost Arc, and Epic Seven to expand into other areas.”


10 billion won in overseas sales: A case on Pinkfong’s global expansion
- Seungkyu Lee, Co-founder and Vice President of SmartStudy

Most-viewed YouTube video

Korean content is writing a new history on YouTube. The music video of Gangnam Style by Psy released in 2012 remained the most-viewed video for five years. The number of subscribers for Blackpink’s official YouTube channel exceeded fifty million and became the second-largest channel in the world. Recently, pleasant news came in. The Baby Shark Dance video by Pinkfong, a brand created by a content creation company SmartStudy, now has over 7 billion views and became the most-viewed YouTube video in the world. Thanks to the huge success of Baby Shark Dance, Pinkfong has quickly become the hottest IP in the licensing industry. Seungkyu Lee, Vice President of SmartStudy, unhesitatingly counted IP as the key to Pinkfong’s success in overseas expansion. “Baby Shark is the first kids’ song in the world to record 11 platinum certifications and the Diamond award (the highest certification given to a song with over ten million paid downloads and streaming) by the Recording Industry Association of America (RIAA). Also, at the 2020 Toy of the Year Awards in North America, it was awarded the License of the Year and the Plush Toy of the Year.” The factor that enabled Pinkfong to grow into an IP that swept the world is the “reproduction of content”. The easy, addictive melody won the world’s heart, and with the celebrities and everyone else singing the song, the content naturally spread online. Before COVID-19, it was performed as a show and a kids’ musical in over 200 cities around the world, meeting its 1.5 million fans. Various kinds of products like cereals, hand sanitizers, and toothpaste featuring the characters were manufactured and became a part of children’s daily life.


ABC strategy

“Is it possible to bring another popular product to a success?” This is the most asked question for Pinkfong since Baby Shark’s huge success. As no one had expected such a worldwide success, people are concerned that it will remain a one-hit-wonder brand. Vice President Lee insists that Baby Shark was not content that was created by luck. Its overseas expansion was successful due to the company’s strategic plan called the ABC strategy – adapting, branding, and customer-oriented. “SmartStudy, which was founded to provide educational services, was able to flexibly deal with the changes in the tech platform as it had a lot of talented people who used to be a developer. We first introduced our content through a mobile app, and we quickly adapted to the platforms that were trending at the time. Taking YouTube, for instance, we predicted that it will become a popular platform in the future, so we decided to operate a channel in the early period when it was not as popular, and we were able to pave the way for ourselves.” Pinkfong’s branding strategy is to engrave the brand through consistent exposure. They created their own intro clip and jingle (a short commercial song) and inserted them in all video content they created for consistent exposure of their brand. Just as you automatically think of the hopping anglepoise lamp in the intro for Disney’s Pixar animation, Pinkfong is trying to register its intro and jingle in the users’ heads. Lastly, Vice President Lee added, “Baby Shark was created based on our customers’ needs. Based on the fact that boys like strong animals, we picked out a unique animal, shark. And then we added the universal theme of ”family“ that the whole world can relate to, and this has brought us a huge success.”


Three factors required for licensing

Pinkfong currently operates fifteen YouTube channels with a total of sixty million subscribers, total views of 34 million, and over six thousand videos translated into 20 languages for children around the globe. Recently, it partnered with a global toy manufacturer to expand its area of business. In signing a licensing contract, there are three factors that Pinkfong regards important. “For licensing, there are three factors that we consider important – brand, sales, target age (kids, parents). We differentiate the type of partnership according to the purpose of licensing – Is it for the brand, for increased sales, or children and parents?” Pinkfong has already created a stop-motion animation using Play-Doh from an American company Hasbro, which recorded a total of 1.5 million views on YouTube. It also collaborated with Blizzard’s World of Warcraft to create an NPC character called Merloc Tinyfin. The clip is now on a roll with 2 million views on YouTube and 0.25 million social media engagements. At the end of his lecture, Vice President Lee mentioned the future plans for the company’s global expansion saying, “Short-form content has its limitations because it only shows images and motions. We are developing additional stories for Baby Shark to jointly develop animation with the American cable channel Nickelodeon. Starting with America, it will be launched all over the world next year.”


How The Haunted House won the children’s hearts
- Jongseo Seok, Director of Studio Bazooka, CJ ENM Animation Business Division

Widening the spectrum of animation

One of the characteristics of the Korean animation market is that when one animation makes a big hit, soon the market sees a flood of similar types of work. Since the animation of a trending genre is given priority in production, the downside of this is that the children do not get to enjoy various genres. Director Jongseo Seok from Studio Bazooka at CJ ENM’s Animation Business Division named the genre, platform, and branding as the three secrets of The Haunted House’s success. “I remember, as a kid, I used to watch the TV show called Korean Ghost Stories. And while I felt scared, I still watched to the end to find out the ending. You can see that children may get scared but they are attracted to interesting stories. I learned that in Japan, horror animations like Ghost Stories and Thriller Restaurant have become popular 15 years ago. So I made a bold move to create content in a special genre of ”horror fantasy“, which was new in Korea.” CJ ENM first aired the pilot episode called Shinbi Apartment #444 in 2014, and without any marketing, it recorded the highest rating among the shows aired during the same time frame and the target rating points of 2.5%. Based on this objective indicator, Director Seok concluded that horror stories can appeal to the children, and he decided to plan one in earnest. Shinbi Apartment, or The Haunted House, started with the one-sentence proposal, “There is a ghost in our apartment,” and the worldview, the characters, and the story were built up based on it. In the planning stage, we visited the old apartments around Seoul in-person to sketch places. And we added more factors one by one such as the goblin who likes human beings and the main human characters. “When planning a work, we must always think about what the viewers want, why aren’t there more popular shows, and whether our planning is reasonable,” said Director Seok. He emphasized, “In the planning stage, we need four elements – novelty, unconventionality, being the first, and differentiation.” The belief that a virtuous circle will be established when animations of various genres are released, which will expand the market, further leading to the growth of the animation industry as a whole. The Haunted House came into existence with the efforts of those who felt responsible for turning this belief into reality.


Becoming competitive in various platforms

After producing The Haunted House, CJ ENM carefully selected the platform to introduce the series. It considered the fact that the new competitors (IPTV, program provider) came into the picture when the growth of the traditional media (major terrestrial and cable TV stations) was stagnant, the fact that the media paradigm shifted to digital with the increased use of smartphones, and the fact that OTT platforms (Netflix, Disney Plus) are continuously growing. With COVID-19, the platform selection strategy became even more important. “For an animation series, the standard is to release it first through a terrestrial TV station, but The Haunted House was first aired on a kids’ channel Tooniverse. Later, it was launched on the IPTV of Korea’s three mobile operators. We produced content for YouTube and adopted the strategy of exposing the content to as many media platforms as possible, airing the series on cable channels and through PPs. Once the marketability of the series was recognized, it was released on Netflix, which gave us the opportunity of global expansion.” After COVID-19 broke out, CJ ENM was faced with a new assignment of “establishing a platform for the post-COVID era”. They paid attention to the fact that the kids’ content suddenly gained popularity with the change in the lifestyle of the elementary school students. To make the platform competitive, they picked out four keywords - newgital IP (new digital IP), transmedia, smartphone, and IPTV/OTT – and are preparing for the post-COVID era. “To develop the competitiveness of The Haunted House on the platform, we are producing a special version of the original anime series and planning short-form content and webtoons. We are convinced that the new form of IP will play a major role in securing us various targets in Korea and abroad.”


Dreaming to be a steady seller with the branding effect

CJ ENM says “Content equals to the brand”. The content needs to be fun to boost the brand value, and the content stands in the center of the brand. They say, to raise the brand value, the brand needs to secure various content that won’t tire the people out and expose them through various media channels. CJ ENM has selected the OSMU model for effective branding of The Haunted House, and so far, they have achieved great success in promoting their brand by expanding to various areas such as TV series, movies, films, web drama, mobile game, and media exhibition. “Due to COVID-19, we tried creating a non-face-to-face musical for the first time. We zoomed into the actors’ faces on the camera and added special effects, which allowed the show to be vivid and exuberant even more so than seeing the show in person. Also, we were the first from the animation industry to make a web drama. With this, we were able to expand our audience from the lower elementary grades to middle school students.” CJ ENM has given the genre of “horror fantasy” a try and produced The Haunted House and successfully enhanced the brand value by boosting its competitiveness by utilizing various platforms. Their ultimate goal is to make The Haunted House a steady seller to be loved for a long time. “The industry is suffering due to COVID-19, but we will make a successful example out of The Haunted House and lead the way to create an environment where the animation industry in Korea can release content in various genres. Lastly, I wish those already in the industry and those who wish to enter the industry find hope in The Haunted House. We hope you will continue to love and support us.”