by Julie (Jeemin) Seo＆James (Yousik) Han

Content consumption behavior is changing rapidly amidst the pandemic. Number of theater audiences in 2023 rebounded from that of 2020, but is still half of pre COVID-19 level (per KOFIC; Korean Film Council). Meanwhile, OTT usage has been steadily increasing during the same period. As OTT (mostly ‘SVoD’, Subscription Video on Demand) arises as a substitute for watching movies at a theater, movies are becoming a high-involvement product, in which people consider cost and time effectiveness as the most important factor when making consumption decisions. For example, people tend to search for reviews and evaluate a movie's intrinsic factors (e.g., genre, plot, etc.), then decide whether to watch at a theater, via OTTs, or even whether to watch it at all.
 
As consumers tighten their purse strings amid soaring inflation and recession fears, more people are cutting down their OTT subscription. Consequently, OTTs are facing fierce competition to retain users by spending high content sourcing budgets, in order to source more popular and attractive content. Thus, many OTTs are loss-making, and return on content production cost is deteriorating in tandem. In December 2023, the top 2 Korean OTT players in terms of MAU signed an MOU for a merger between the two platforms - it is deemed to be a ‘Struggle for survival’ amidst rising competition within the Korean OTT market.
 
Kinolights is a sole contents aggregator (review/search) platform in Korea for OTT, Advertising Video on Demand (hereinafter ‘AVoD’), films, and TV programs based on an authoritative in-house user review system named ‘Traffic Light’. Compared to ‘Tomatometer’ of Rotten Tomatoes, Kinolights’ ‘Traffic Light’ reflects content tastes of mass Korean content consumers via an authorized, well-curated critics pool.
 
Since its first service launch as a non-abusive, transparent/trustworthy movie review service in March 2020, Kinolights has been updating features such as personalized contents curation (new releases/terminating contents based on users’ OTT subscription status), community, and ‘Popcorn Point’ system (rewards that could be used for event enrollment), which in turn contributed to high user engagement. MAU nearly tripled within 2 years, reaching 800k as of March 2024, and M1 retention remained high at 40%. Kinolights is also hosting industry exclusive movie events (e.g., movie premiere, fan meeting, etc.) based on its brand power and founder’s extensive industry networks. Kinolights aims to become a global K-Contents/Taste based AVoD/FAST platform for short-form plot and film summary contents, leveraging synergy with its 1st party contents and user data accumulated as a content aggregator.
 
Today, we are excited to announce our investment in Kinolights and look forward to accompanying them throughout their journey. We believe Kinolights is best positioned to disrupt the “As-is” contents market in several ways:
 

• · Exclusive positioning within the market with huge opportunity: We strongly believe that Kinolights could leverage their high-engagement user base, accumulated exclusive contents database (e.g., contents metadata, OTT data, user rating/review data) and industry network (platform bargaining power within struggling content production market), to successfully become a global K-Contents/Taste-based AVoD/FAST platform for short-form plot and film summary contents. Global AVoD market is a huge market with revenue expected to grow to US$ 64bn at 10% 3yr CAGR until 2027F (per Statista)

• · Content enthusiast founder with extensive industry network: CEO & Founder Junyoung Yang is a content aficionado and a cinephile, who watched c.3,000 movies during his high school and college years. Based on the founder’s expertise and deep understanding of the Korean content market and solid networks, we believe Kinolights to disrupt the Korean contents market, which has more room for growth going forward