Naver Joins Hands with TVING... Kakao Growing Its Own OTT Brand

[Asia Economy Reporter Kang Nahum] Naver and Kakao's OTT utilization strategies to strengthen intellectual property (IP) competitiveness are sharply diverging. While Naver is enhancing external collaboration through equity investments in other companies' OTT platforms, Kakao is focusing on strengthening its own OTT platform capabilities.

According to industry sources on the 2nd, Naver became the second-largest shareholder of CJ ENM's subsidiary Tving through a third-party allotment paid-in capital increase. The acquired shares amount to 261,817 common stocks (15.4%), valued at approximately 40 billion KRW.

Naver's investment aims to accelerate investment in original content and secure Tving's overwhelming competitive edge. The goal is to maximize synergy between CJ ENM, which has strengths in content planning and production, and Naver's diverse original IPs such as webtoons and web novels through Tving.

Recently, Naver, which is investing in IP acquisition including the purchase of the world's largest web novel platform 'Wattpad,' is creating a fund of about 100 billion KRW to develop video projects based on its IP holdings. These video works are highly likely to be exclusively broadcast on Tving.

The Tving original drama "Yumi's Cells," scheduled to air in the second half of the year, is also being produced based on the popular webtoon of the same name on Naver. "Yumi's Cells" is a globally successful webtoon with 3.2 billion cumulative views and 5 million cumulative comments over five years of serialization. Naver also plans to actively support Tving's overseas expansion by leveraging its overseas business capabilities.

While Naver is strengthening its IP competitiveness by utilizing external OTT platforms, Kakao is working to enhance the brand value of its own OTT platform.

Kakao Entertainment's KakaoTV will discontinue sponsorship and ad revenue sharing services for individual broadcasters and PDs on KakaoTV starting at the end of this month. This marks a strategic shift from a YouTube-style internet personal broadcasting focus to a Netflix-style OTT model.

KakaoTV explained, "Since the second half of last year, we have been gradually transitioning to a service mainly showcasing original videos produced in-house or videos in the style seen on TV and cable."

By bringing in star cast members such as Lee Kyung-kyu, Kang Ho-dong, and Kim Gu-ra, KakaoTV is pioneering a new genre called 'well-made mid-form' content unique to KakaoTV. KakaoTV's original content like "Jjin Kyung-kyu," "Shall We Talk," and "Ants Are Still Plump Today" captivates viewers with relatively short running times under 30 minutes, providing immersive experiences. KakaoTV has released a total of 55 original variety shows and dramas this year in this manner.

KakaoTV plans to invest about 300 billion KRW over three years until 2023 to plan and produce a total of around 240 original contents. A KakaoTV official said, "Based on lively ideas and planning, through bold experiments and creative attempts, we will expand into genres and areas of content never seen before, creating a unique content experience exclusive to KakaoTV."