South Korean film and TV studio Next Entertainment World (NEW) has struck a long-term agreement to supply content to streaming service Disney Plus. The deal appears to bring forward the likely launch of Disney Plus in the key territory, while also further stoking competition for Korean films and TV series.
The agreement was disclosed little fanfare late last week. Its existence was confirmed to Variety by both NEW and a Disney spokesman in the region.
NEW said that its 47%-owned affiliate Studio & New had agreed a five-year “content partnership” with The Walt Disney Company Korea to supply works across a range of genres. It also specified that these are destined to be shown on Disney Plus. A Disney spokesman said that the deal calls for the supply of one series per year over the term of the agreement.
Local media in South Korea have reported that the deal involves a commitment to spend KRW66 billion ($59 million) and have named shows including “Moving” and “Our Police Class” as likely to be included. Neither Disney nor NEW would confirm production details.
The deal follows barely a month after the U.S. conglomerate announced that it would not renew its licenses to provide Korean streaming platform Wavve with 100 Disney group film titles, including “Frozen” and the Marvel and “Star Wars” series. They disappeared from Wavve’s SVOD service from April 30, though media reports they may still be available on a pay-per-view basis.
Disney has not laid down a firm timetable for expansion of its Disney Plus streaming service in Asia, though it has indicated that launches in South Korea and Hong Kong could happen in 2021.
From NEW’s perspective the deal will first “secure a stable foundation for tent pole production,” and second “represent a leap forward as a global studio capturing fans around the world,” said Studio & New CEO Jang Kyung-ik and Next Entertainment World, chairman Kim Woo-taek in a joint statement.
NEW launched as an indie film distributor in 2008 and had just four employees at a time when the Korean film industry was dominated by giant vertically-integrated conglomerates that stretched from production and finance through to distribution and exhibition. Through a concentration on story development, NEW made a successful diversification into production. Its 2016 mega-hit “Train to Busan” came two years after the company had listed on the Korean Stock Exchange.
Media sector analyst Lee Hyundong, NH Investment & Securities, said Studio & New, which has previously produced films including “The Great Battle” and Netflix series “Beauty Inside,” would need additional capital to handle production of “Moving” and “Our Police Class” but that ultimately the Disney deal would drive earnings growth at NEW and could help Studio & New to be given an IPO. He said that when KT Skylife bought a stake in Studio & New last year, the unit had an enterprise value of W83.4bn ($74 million).
That makes Studio & New only a medium-sized producer compared with the larger operations that are offshoots of Korean public broadcasters or CJ ENM spinoff Studio Dragon, which is valued at $2.7 billion. But with Korean content being fought over by local companies, regional and Chinese streamers and increasingly by the global platforms, Hollywood is taking notice. In March this year, NEW announced a three-year deal with Los Angeles-based Library Pictures International to develop a slate of Korean movies for the global market.