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(News Focus) China capital flows into S. Korean entertainment agencies

All News 11:03 January 26, 2016

SEOUL, Jan. 26 (Yonhap) -- More Chinese companies are becoming major stakeholders of South Korean entertainment agencies, a trend that could be positive for the expansion of "hallyu," or the worldwide popularity of Korean culture, but worrisome for its long-term future.

Signal Entertainment Group Corp. is the latest case in point. The South Korean agency recently issued 21.45 billion won (US$17.89 million) worth of shares to Spearhead Integrated Marketing Communication Co., according to its regulatory filing. The Chinese marketing company will soon become the largest shareholder of the agency, which manages actresses Kim Hyun-joo and Lee Mi-yeon.

The trend of Chinese firms taking over South Korean ones started much earlier. In 2014, Juna International Ltd., a Chinese entertainment company, took over Chorokbaem Media, which produced South Korean soap opera hits like "The Producers," "All In" and "Jumong" over the past decades.

Control over Chorokbaem Media shifted to China's DMG Group, which bought 25.92 percent of the company's shares, in November 2015.

Meanwhile, Chorokbaem Media bought three other local entertainment firms around the same time, putting all three of them under DMG's control.

On one hand, the influx of Chinese capital is welcome for cash-strapped agencies and those trying to enter the Chinese market.

But some analysts warn that the Chinese management of South Korean content could jeopardize "hallyu" by exposing the know-how that South Korean agencies have worked decades to accumulate.

Park Sang-ju, head of the Corea Drama Production Association, said agencies financed by Chinese capital shouldn't have to sacrifice their South Korean identity.

"People have been worried that South Korean resources would be used toward making Chinese soap operas," he said. "In reality, though, that hasn't been the case. I think it's a matter of how the money is used."

South Korean agencies should use the capital to experiment with different ideas they hadn't been able to in the past due to financial constraints, Park said.

"If used well, it could be an opportunity to transcend the limits of the South Korean market," he said.

sojungpark@yna.co.kr
(END)

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