August. 6. 2021
Kakao commits to making the entertainment unit a global content company in the years to come
|Kakao President Kim Beom-su|
Internet giant Kakao pledged to grow the group’s entertainment subsidiary into a global content company in the coming years on Friday.
“Kakao Entertainment’s structure is now complete, with content, music and media businesses,” Kakao executive vice president Jay Bae said on a second quarter earnings call.
“We expect the subsidiary to grow into a global content company within the next three years, based on its intellectual property value chains. “
Kakao Entertainment was launched in January through the merger of KakaoM and KakaoPage. Kakao Entertainment owns over 8,000 intellectual property rights to original KakaoPage stories, including comics and web novels. The company is present in 10 countries, including the United States, Japan and a number of countries in Southeast Asia. KakaoM operated a music and video content production and distribution business. The integrated entity will merge in September with Melon Company, a music streaming company.
Bae said Kakao aims for its Japanese subsidiary Piccoma’s web comic platform to reach 1,000 billion won in annual transactions this year, amid rapid expansion of payments for its content in the Japanese market. . Piccoma has a dominant presence in the Japanese digital comic market. The Kakao leader’s remarks come at a time when Kakao is aggressively expanding its presence in global digital content markets.
Kakao Entertainment is also aiming to expand its presence in the North American market, with the acquisition of the drama app Radish and Tapas Media which offers short-lived online mobile content.
“Tapas increasingly incorporates the original intellectual property of Kakao Entertainment after discussions began in May to acquire the shares of the company,” Bae said. “We will quickly expand the IP scale for the new stories that will be provided to Tapas by the end of the year.”
Kakao is also set to bring original web novels to North American viewers via Radis. The entertainment company is looking to synergize with acquisitions, for example by turning Radish’s original web novels into comics on Tapas.
Kakao posted a record quarterly profit in the second quarter, with revenue of 1.35 trillion won and operating profit of 162.6 billion won. The numbers are up 42% and 66%, year over year, and 7% and 3%, quarter over quarter. Kakao’s sales have grown for 17 straight quarters while its operating profit has grown for 10 straight quarters.
The IT giant’s second-quarter earnings were driven by advertising on platforms and its mobility, fintech and webcomic businesses.
Kakao said it expects its mobility business to break even on an annual basis this year. The company said the robust growth of the business will be supported by strong demand for Kakao’s mobile taxi services as well as designated driver services and the launch of new services such as payments for parking and tickets. for buses and intercity trains.
Kakao has an advantage in attracting customers given KakaoTalk’s 46.6 million user base out of Korea’s 51.8 million people using the Messenger app in the second quarter.