Former Sony Pictures Television executives Andy Kaplan and George Chien have cut a deal with Sony to acquire three entertainment networks that serve Southeast Asia and South Korea.
Kaplan and Chien have launched KC Global Media to operate the Sony channels, which include the AXN-branded channels in the region, the anime-focused Animax and South Korea’s Sony One entertainment channel. KC Global Media is in the market to buy similar assets from other major media conglomerates. KC Global Media’s deal with Sony does not include the successful Sony Pictures Networks India service.
Kaplan and Chien know Sony’s international TV assets well. Kaplan served as president of Sony Worldwide Networks from 2002 through early 2018, when Sony’s TV wing underwent a major overhaul of top management. Chien directly oversaw the growth of AXN and other channels in his role as exec VP of Sony Pictures Television Media Networks. Before that, he was Sony’s exec VP of Asia Pacific networks. He left Sony after 17 years, around the same time as Kaplan.
“What we’re going to bring to this particular business is an Asian-focused entrepreneurial point of view,” Kaplan said. “The conventional wisdom is that being part of a big company, you get the benefits of synergies and leverage. Our point of view is there are things we can do as a smaller entity rather than being part of a bigger corporate structure that can have tremendous benefits.”
Chien said the depth of his experience in Southeast Asia and other key international territories makes him confident that there are strong growth prospects for a company that can blend Hollywood connections with an understanding of local tastes.
“The team on the ground has the smarts and the knowledge to adapt and executive in a much different manner than other companies who are working over there,” Chien said.
For Sony, the decision to sell reflects the studio’s shift in strategy under the direction of chairman-CEO Tony Vinciquerra to focus in large part on content licensing rather than maintaining a host of its own proprietary networks. Sony, like other large media conglomerates, invested significant resources starting in the 1990s to build up big portfolios of linear and satellite-delivered international channels that at one time were reliable sources of high margin earnings.
Sony executives had identified the Southeast Asia channels group as assets that could be ripe for selling given the studio’s renewed emphasis on content production. Kaplan and Chien were aware of this and let it be known to studio leaders that they would be interested in a deal if Sony decided to sell. The acquisition talks began a few months ago.
“As part of our networks portfolio review that we began last year, we have decided to sell our channel assets in Southeast Asia and Korea and shift our focus toward what we feel are the highest potential areas of opportunity for the company in those markets,” Sony Pictures Television chairman Mike Hopkins told Variety.
The AXN channels have been defined in the region in part through a healthy serving of U.S. imports from Sony and other Hollywood studios such as “SEAL Team” and “MacGyver.” AXN is also the home of localized versions of “The Amazing Race Asia” and “Asia’s Got Talent.” The Sony One channel has prospered in South Korea in part through its embrace of K-pop stars and other aspects of Korean pop culture that have spread to the U.S.
Kaplan and Chien emphasized that they have the personal relationships with the major studios to maintain those deals. Kaplan and Chien would not comment on the financial terms of the deal or whether KC Global Media has investors or partners lined up to help operate the business. Financial details of the deal were not disclosed.
“George and I own this business,” Kaplan said. “To operate it going forward we’re going to take advantage of various financing capabilities.”
In recent years, that international gold rush for U.S. majors such as Disney, Fox, Viacom and the former Time Warner companies has slowed as maturing overseas markets face the same kind of heightened competition as the U.S. pay TV market. Currency fluctuations have also made the business more challenging. Kaplan and Chien appear to be betting on the possibility that more majors will be interested in shedding existing channels.
“As the world is changing and as big media companies are constantly reviewing their strategies, we think there are a lot of opportunities for a business like (KC Global Media),” Kaplan said.
(Pictured: Andy Kaplan, George Chien)
