Korea Telecom (KT) and Japanese IT investment company Softbank have announced a $41m (KW40bn) content fund called the KT Global New Media Investment Fund.

The two companies are to invest 50:50 in the fund focusing on content for KT's internet protocol TV (IPTV) service MegaTV, which will also be shared with Softbank's IPTV platform in Japan. The content is to include animation, educational content, films and drama series.

The fund will be run by Softbank Ventures Korea, a venture capital subsidiary of Softbank in Korea. The firm is looking to expand the fund to $61.5m-$102m with outside investors by the end of the year.

More than 90% of the fund will go to local content, and the rest will go to foreign films.

Sungwoon Yu, principle at Softbank Ventures said: 'We haven't fixed a cap for investment in respective genres, but we will probably invest around 50% of the total fund in films and dramas.'

The fund will invest from the pre-production and production stages, and anticipates holding majority rights to copyrights, especially with exclusive IPTV distribution rights and overseas sales rights.

Yu notes the fund's focus is on finding IPTV content earlier, at lower risk and higher returns, so going into theatrical self-distribution or sales is not one of the current priorities, nor do they aim to greatly disrupt release windows.

Foreign acquisitions will be looked at through brokers on a case-by-case basis for the time being.

Although, as Yu notes: 'A fund's lifespan is seven years, and we're increasing our capabilities.'

Softbank Ventures is currently investing $99m in IT, Web 2.0, mobile technologies and has recently expanded into the digital content field.

Leading fixed-line phone operator KT has also diversified into broadband, mobile, and IPTV.

The company also plans to create a separate investment pool of $23.5m to take part in outside content investment funds as well.

KT previously acquired leading production house Sidus FNH and TV producer Olive Nine and says it is actively pursuing partnerships with Disney, Warner Brothers, 20th Century Fox, Sony, web portal site Naver, and educational TV channel EBS.