CJ ENM 사옥. (사진=연합뉴스)

 

[Alpha Biz=(Chicago) Reporter Paul Lee] CJ ENM's management crisis has been confirmed as an earnings shock in the first quarter of this year. Increased production costs, repeated box office failures and reduced advertising spending due to the economic downturn have expanded CJ ENM's losses. The problem is that the CJ ENM crisis is unlikely to recover in the short term.

According to the Financial Supervisory Service's electronic disclosure on the 10th, CJ ENM's consolidated sales in the first quarter of this year fell 0.9% year-on-year to 949 billion won and operating profit and loss of 50.3 billion won.

The biggest reason for the poor performance in the first quarter is due to the new business TVing and fifth season. A total of 82 billion won in losses occurred on the media platform with 34.3 billion won and 40.7 billion won in movie dramas.

In the case of online video service (OTT) platform tving, the growth of paid subscribers is slow despite aggressive content investment. The recent merger with the KT season has topped the list of domestic OTTs, but the increase in new subscribers is minimal.

The problem is that the sluggishness of CJ ENM's flagship business is expected to continue in the second quarter.

CJ ENM has presented 24 to 28 flights for the annual delivery goal of the fifth season, which is far from sufficient in the first half of the year to achieve this. Only one has already been released in the first quarter and four to five are expected to be released in the second quarter. However, the Fifth season has fired 2 percent of its employees and laid off its content production team, making it difficult for the industry to achieve its annual goal.

In addition, the advertising market continues to slump, and tvN recently decided to abolish the drama, reducing the number of drama slots again. As a result, the industry predicts that a short-term rebound is difficult due to the media business and a return to profitability will take a long time.

 

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