Troubled Hollywood conglomerate Paramount Global is scaling back its wide-ranging partnership with Korean entertainment leader CJ ENM, Variety has learned.

The deal was initially struck in December 2021 (when Paramount Global was called ViacomCBS) and was described at the time as “a global content deal encompassing coproductions for original TV shows and films as well as content licensing and distribution across the companies’ streaming services.”

The Paramount+ streaming service, currently housed within the CJ ENM-controlled Tving streaming platform, is to become unavailable from June 19, Tving has informed subscribers. Paramount+ began operating on Tving, as a free-of-charge addition for existing subscribers, in June 2022.

“Tving and Paramount+ have decided not to renew their partnership,” a Paramount Global spokesperson confirmed to Variety.

“In line with our respective business strategies, we have decided together to end the ‘Paramount+ Branded Pavilion’ service on June 18th. Going forward, Tving will strive to secure various businesses to increase user satisfaction,” CJ ENM said in a statement provided to Variety.

A CJ ENM channel carried in the U.S. by Paramount’s Pluto TV since December 2021 is also leaving the platform.

The companies’ two-way television content co-production and distribution agreement is also to be put on ice. This had seen Paramount invest in seven Korean-language series, kicking off with “Yonder” in 2022.

While CJ ENM and Tving retain the rights in South Korea, Japan and Taiwan to the seven shows, the series were to have premiered exclusively on Paramount+ in the U.S., Canada, U.K., Australia, Latin America, Brazil, Italy, France, Germany, Switzerland and Austria. The shows were then to move to the CJ ENM-owned channels tvN and tvN Movies in the first window pay-TV slot in Southeast Asia in a deal brokered by CJ ENM (Hong Kong), a channels and content distributor. In other territories, licensing is handled by Paramount Global Content Distribution.

Three of the seven series have been released on Paramount+ — “Yonder,” “Bargain” and “A Bloody Lucky Day” — with a fourth, “Pyramid Game,” set to premiere on Paramount+ on May 30. Details on the three remaining three shows will be released at a later date. “We are still discussing about the unreleased content,” a CJ ENM spokesperson said.

“Quality Korean content is a key piece of Paramount+’s global offering, and we’re expanding our roster of originals to continue to provide entertainment with captivating narratives and performances that transcends borders,” said Marco Nobili, EVP and GM, Paramount+ International, in April last year.

Paramount Global’s pullback from CJ ENM comes as Paramount — facing a decline in its TV segment and an unprofitable streaming business, as it wrestles with a mountain of debt — has been working to cut costs.

On the company’s Q4 2023 earnings call in February, CFO Naveen Chopra said the company was “dialing back on local content and marketing” and said, “We’ll also likely be exiting some hard-bundle relationships where, quite frankly, the economics just weren’t that compelling.” For Q1 2024, Paramount Global took a total of $1.12 billion in content charges, including $909 million for the impairment of content to its estimated fair value as well as $209 million for development cost write-offs and contract-termination costs. In its 10-Q filing, the company disclosed that it may incur an additional programming charge of $250 million later in 2024 “related to the termination of an international programming agreement.”

Meanwhile, Paramount Global has been exploring different M&A scenarios. Its board and controlling shareholder Shari Redstone had been in talks with David Ellison’s Skydance Media on a deal that would have merged Paramount and Skydance. But an exclusive 30-day negotiating window with Skydance lapsed last month without a deal. Meanwhile, Sony Pictures and private-equity giant Apollo emerged as prospective bidders for Paramount Global but are “backing away” from their $26 billion all-cash offer to buy the entire company, the New York Times reported on May 17.

Amid the , Paramount ousted CEO Bob Bakish last month and replaced him with a triumvirate of execs installed as the “Office of the CEO.”

Notably, the comprehensive agreement between Paramount Global and CJ ENM never covered theatrical releasing. Throughout the course of the “comprehensive agreement,” Paramount’s movies have continued to be released in Korea by Lotte, a vertically integrated conglomerate spanning production, distribution and theaters, that is a rival to CJ ENM and which poached the Paramount releasing deal from CJ Entertainment in 2015.

The CJ ENM spokesman denied that the entire relationship between the two conglomerates has been canceled. “We are maintaining our business relationship [with Paramount]. Multifaceted cooperation is being considered. But other projects and shows are not decided yet,” the rep said.

The CJ ENM spokesman, however, declined to explain reasons for the apparent downshifting moves.

Asian media analysts pointed to the poor traction gained by Paramount Global’s American series among Korean audiences; Tving’s altered spending priorities, which lately have focused on licensing of live sports rights; and the turmoil within Paramount itself.

The seven greenlighted shows have benefitted CJ ENM’s various TV production units. The six titles that followed were “Bargain,” “A Bloody Lucky Day,” “Queen Woo,” “Dongjae, the Good or the Bastard,” “Dreaming of Cinde Fxxxing Rella” and “Pyramid Game.”

With noted film director Lee Joon-ik as helmer, “Yonder” was announced in February 2022 and was produced by Doodoong Pictures and CJ ENM. It went on air in Korea from October the same year and launched on Paramount+ in April 2023.

“Bargain,” a crime series which won a prize at the Cannesseries festival, was jointly produced by Climax Studio and JTBC. JTBC is both a rival to CJ ENM and a minority owner of Tving. “Dongjae, The Good or the Bastard,” was produced by Studio Dragon and Ace Factory, was a spin-off of the hit thriller series “Stranger.” “Dreaming Of Cinde Fxxxing Rella,” a hybrid romantic comedy, was produced by CJ ENM, Story Phoenix and Keyeast.

“A Bloody Lucky Day,” which follows an ordinary taxi driver who becomes entangled with a customer who turns out to be a serial killer, was produced by CJ ENM’s production house Studio Dragon, The Great Show and Studio N. Period drama “Queen Woo” is produced by Andmarq Studios, Compass Pictures, CJ ENM Studios.

The most recent of the series septet — school-set YA survival thriller, “Pyramid Game” — was produced by Film Monster and CJ ENM Studios. It had a festival premiere at Series Mania in March.

Pictured above: “A Bloody Lucky Day”

Written by Patrick Frater

Link:https://variety.com/2024/global/asia/paramount-global-korea-cj-enm-strategic-partnership-1236012747/