2019 Outlook Media platform/Content Most favorable environment in history; focus on PR.I.C.E Analyst Jay Park +822-3774-1652
[email protected] Contents [Summary] 3 I. Outlook by segment 4 II. Medium-/long-term outlook 10 III. Key points to watch 12 IV. Global peer group (valuation) , Investment strategy 21 V. Top Picks 23 Studio Dragon (253450 KQ) YG Entertainment (122870 KQ) [Summary] Korea’s 2019 media/entertainment competitiveness Shares to be driven by content sales (p, US$m) (%) Media/content business model focused on direct sales 500 40 FTSE KOREA MEDIA indx (L) Key words: Global platforms, geopolitics, licensing fees, Domestic ad market growth (R, YoY) blockbusters, investments, leverage Broadcast content export growth (R, YoY) 400 30 Media/content business model focused on ads Key words: Domestic market, ad trends, seasonality, politics/sports 300 20 200 10 100 0 OTT export expansion in 2016-18 Chinese market lull 0 OTT export expansion in 2019F + Chinese market recovery -10 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Note: 2017 exports are based on KOCCA’s estimates; 2018 exports based on our estimates Source: Thomson Reuters, KOCCA, Cheil Worldwide, Mirae Asset Daewoo Research 3| 2019 Outlook [Media platform/Content] Mirae Asset Daewoo Research I. Outlook by segment: Media ads Ad market: Mobile and • We expect the domestic ad market to grow 3% YoY (similar to GDP growth) to W11.3tr, amid the absence of large- generalist/cable TV scale sporting events. • We forecast positive growth across all segments (except print ads), with mobile, generalist channels and cable TV channel ads are growing channels likely to drive growth.