CJ ENM Co., the South Korean film, television and music group, said its third-quarter operating profit rose 25.5% from a year earlier to 22.1 billion won, even as revenue slipped 4.4% to 1.19 trillion won, according to preliminary results disclosed on Nov. 5.

The numbers show a studio that is selling less but keeping more of what it sells. For investors who follow Asia's content trade, CJ ENM is the closest thing Korea has to an integrated Hollywood group: it owns cable channels, the Tving streaming service, drama maker Studio Dragon, a music label and a U.S. production arm. Its margins are a read on how much global streamers are willing to pay for Korean shows, and on whether a local streaming platform can make money against Netflix.

Film and drama: fewer titles, better deals

Revenue in the film and drama division fell 23.5% to 285.3 billion won, but operating profit in the unit rose 126.8% to 15.5 billion won, MTN reported from the company's earnings call. Ilgan Sports, citing the regulatory filing, said the quarter was helped by a series made for Netflix and by advance sales of two upcoming dramas to global streaming platforms.

Studio Dragon, the listed drama subsidiary, lifted revenue 16.5% to 159.0 billion won and operating profit 44.4% to 15.1 billion won, according to MTN. Fifth Season, CJ ENM's American studio, remained a drag: it booked revenue of 67.2 billion won and an operating loss of 11.0 billion won in the quarter.

The contrast matters for how the market values Korean content. Selling finished shows to Netflix and other platforms before they air locks in revenue and reduces the risk of a flop, which tends to lift margins. The pattern resembles the shift at Japanese studios toward licensing their libraries abroad, which carried Toho's anime and IP business in its latest half-year results.

Tving advertising grows, but the streamer is back in the red

The media platform division, which combines CJ ENM's TV channels and Tving, swung to an operating profit of 5.9 billion won on revenue up 10% at 351.8 billion won. Ilgan Sports attributed the improvement to a slower decline in TV advertising and a 42.1% rise in Tving's advertising revenue.

Tving itself posted third-quarter revenue of 120.5 billion won, up 22.0% from a year earlier, but slipped to an operating loss of 7.2 billion won after an operating profit of 6.0 billion won in the second quarter, News Tomato reported. The company's chief financial officer said the second quarter had included revenue from overseas content sales, and asked investors to judge the two quarters together. Over the first nine months, Tving's operating loss narrowed to 20.4 billion won from 48.0 billion won a year earlier, according to News Tomato.

Tving is also negotiating to renew its online broadcast rights for the Korea Baseball Organization, one of its biggest draws for subscribers. The company said a contract would be signed within the year and blamed the delay on procedure, not on the terms of the deal, MTN reported.

Abroad, Tving opened a branded section in August on Shahid, the MBC Group streaming service that covers 24 markets in the Middle East and North Africa, adding to existing tie-ups with HBO Max in 18 Asia-Pacific markets and with Disney+ in Japan, News Tomato said.

Music and commerce weigh on the quarter

The music division grew revenue 3.6% to 204.4 billion won but posted an operating loss of 7.3 billion won. Ilgan Sports said the loss reflected spending on original programming for the Mnet Plus fan platform and on developing new artists, while acts including JO1, INI and Alpha Drive One supported sales.

Commerce saw revenue fall 1.9% to 348.9 billion won and operating profit drop 46.8% to 6.7 billion won, MTN reported. The company cited investment in growth businesses, though transaction volume in its mobile live commerce operations more than doubled, up 104%, according to Ilgan Sports.

For the fourth quarter, CJ ENM expects the Korean television advertising market to shrink about 8% from a year earlier, but it forecasts its own advertising revenue to hold roughly flat, MTN reported. A company spokesperson told Ilgan Sports the priorities for the rest of the year are an upgraded integrated advertising business, wider overseas distribution of its shows and stronger global positioning for its artists.

The next fixed point for investors is the KBO rights renewal, which CJ ENM has said will be signed before the end of the year.