The Sweet Temptation of Chinese Capital... Samjong KPMG: "Korean Firms Must Safeguard IP and Business Control"

Publication of "Expansion of Chinese Content and Capital: Strategic Responses for Korean Companies"

"Leverage Chinese Capital While Protecting Core IP"

As China accelerates its push into the global content market, experts have highlighted the urgent need for Korean content companies to establish strategic measures aimed at safeguarding their core intellectual property (IP) and maintaining control over their businesses.

On September 21, Samjong KPMG released a report titled "Expansion of Chinese Content and Capital: Strategic Responses for Korean Companies," providing this analysis.

According to the report, China, leveraging a base of more than 1 billion online video users, is rapidly producing and validating content before spreading it to overseas markets. In the gaming sector, China is achieving strong results by prioritizing its own IP and high production quality. In the video sector, China is steadily expanding its distribution of long-form dramas and short-form dramas through global online video services (OTT) such as Netflix.

Notably, Chinese companies are moving beyond simple exports to directly securing local business infrastructure and core assets. In the gaming industry, they are ramping up investments and acquisitions of local game company stakes. Meanwhile, in the video and short-form content sectors, they are building overseas hubs and increasing co-productions with local producers.

The report explained that Chinese companies embody a duality for Korean firms—they are both competitors and partners that provide funding and distribution networks. As such, the report emphasized the need for a comprehensive examination of entry strategies for each market, the extent of securing equity, IP, and distribution rights, and the actual control over those assets. The report also stated that proactive management of geopolitical risks is essential, citing not only import license approvals and censorship in China but also issues such as data protection, national security, and antitrust regulations in various countries.

Furthermore, the report recommended that Korean content firms systematically manage their dependence on Chinese partners and protect major assets such as core IP and data. It also suggested that companies expand their production and business base by leveraging Chinese capital and overseas networks, while developing new business models aligned with shifts in consumer behavior and technology—such as artificial intelligence (AI) and short-form content.

Kim Ikchan, Executive Director of Samjong KPMG, stated, "The expansion of Chinese content companies and capital provides Korean firms with opportunities for funding and global market entry, but it also brings intensified competition, increased dependence on partners, and policy and regulatory risks." He continued, "A balanced approach is needed, one that defends core assets and business control while utilizing partners' capital, distribution channels, and operational strengths, and further enhancing the competitiveness of their own content."

This content was produced with the assistance of AI translation services.