Korea Telecom and Japanese investment company Softbank have teamed up to create a $40 million film and TV content investment fund.
The two companies will each invest 20.5 million won ($20 million) in the Global New Media Investment Assn., which will develop and acquire animation, movies, TV drama and educational content to run on KT’s Internet protocol TV service, Mega TV.
They plan to expand the fund to $60 million-$100 million later this year.
“The fund allows us to plan, finance and produce programs such as high-def and interactive contents specified for IPTV,” said Jung Man-ho, KT’s director of media business.
The fund will be managed by Softbank Ventures Korea, a venture capital subsid of the Softbank Group.
South Korea’s largest fixed-line phone operator, KT has diversified into mobile, broadband Internet and terrestrial mobile TV, which counts millions of subscribers in the country.
The Korean government recently paved the way for deregulation of IPTV, which is expected to create an explosion of growth in the sector and challenge traditional cable TV.
To fuel these new-media ventures with content, KT has invested in media companies and content by acquiring a majority stake in movie shingle SidusFNH and TV producer Olive Nine, while cooperating with Disney, Warner Bros., Fox, Sony, EBS and Naver.
KT Thursday announced it would invest $25 million more in a separate fund.
“Previously funds invested in media contents couldn’t exercise any influence on distribution or international rights. But we will secure copyrights, exclusive distribution rights and merchandising rights to leverage our profitability,” said Moon Gyu-hak, president of SoftBank Ventures Korea,.
“We are going to focus 90% of the fund on Korean content. However, in the movie sector, the fund will acquire foreign content as soon as possible. For Japanese contents, we will secure copyrights to original programs,” Moon said.
“The newly developed contents will be also provided to Softbank’s IPTV in Japan. Our partnership will be expanded with the new media business,” Jung said.