[Asia Economy Reporter Buaeri] Kakao Page and Kakao M are merging to launch 'Kakao Entertainment.' This is the first large-scale merger between Kakao subsidiaries, each with sales reaching hundreds of billions of won. Both sides expect the merger to achieve annual sales of 1 trillion won.
Kakao Page and Kakao M held board meetings on the 25th and resolved to merge. Kakao Page is Kakao's subsidiary responsible for the webtoon business, while Kakao M handles entertainment businesses such as variety shows and dramas. The two companies plan to hold a shareholders' meeting on the 26th for final approval and complete the merger on March 1.
Full-Scale Global Entertainment Market Expansion
This merger reflects the decision of Kim Beom-su, Chairman of Kakao's Board, to target the global market. A Kakao official explained, "This decision was made to gain a competitive edge in the global entertainment industry." The two companies plan to accelerate their global market expansion through the merger. Kakao Page and Kakao M aim to create strong synergy based on their accumulated intellectual property (IP) business capabilities and platform networks.
The merger connects over 50 subsidiaries and affiliates. The companies will be able to build a strong network with partners in the entertainment and content industries. They have secured a 'value chain' covering all fields and genres of entertainment, from content providers (CPs) supplying IP to artists such as singers and actors, as well as planning and production companies.
Kakao Page has established a network of 16 subsidiaries and affiliates through continuous investment centered on webtoons and web novels, becoming the largest IP company in Korea with about 8,500 original story IPs. In addition to domestic platforms like 'Kakao Page' and 'Daum Webtoon,' it has sought global expansion across 10 countries including Japan, North America, Greater China, and Southeast Asia. Kakao Page's IPs such as Itaewon Class and The Uncanny Counter have expanded into various fields including dramas, movies, and games.
Kakao M has seven actor management companies and four music labels under its umbrella, along with numerous drama, movie, and production companies. It also possesses video content planning and production capabilities through collaboration with industry partners, centered on over 80 top creators such as writers and directors, and about 150 star actors.
Creating 'Super IP' from Kakao Entertainment
The new merged corporation will leverage the IP business know-how and capabilities accumulated by both companies to expand content IP and diversify business across all entertainment fields. It plans to focus its capabilities on planning and producing powerful super IPs targeting the global market.
It will also review various synergy measures to secure differentiated content competitiveness. The combination of Kakao Page's platform networks established domestically and internationally with Kakao M's music and video content is expected to strengthen the competitiveness of existing platform and content businesses.
The synergy between Lee Jin-su, CEO of Kakao Page, and Kim Sung-soo, CEO of Kakao M, is also highly anticipated. The two CEOs plan to lead the new merged corporation based on their respective expertise, driving evolution and innovation within the entertainment industry.
Both sides stated, "We decided to merge Kakao Page and Kakao M to secure competitiveness in the ultra-competitive global entertainment market," adding, "Through the combination of our business know-how, capabilities, and value chains, we will lead a new entertainment industry."
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