[Asia Economy Reporter Kang Nahum] Kakao Entertainment announced on the 11th that it will prepare and implement sustainable growth plans together with creators. This second co-prosperity plan, following last year, aims primarily to improve authors' rights, expand creative support, and increase authors' earnings.
First, Kakao Entertainment has prepared an 'Author Rights Improvement Plan' and will pursue 'settlement transparency' so that all creators can check their settlement details. Until now, in the case of KakaoPage, where the contract rate with companies (CP·Content Provider) to which authors belong is relatively high rather than individual authors, the settlement details have been disclosed only to CPs due to the contract structure.
Expanding this, Kakao Entertainment plans to build an ‘Author Settlement Site’ where authors can also view settlement details, scheduled to open within the first half of the year. After system usage guidance and training, it is expected that from the second half of the year, any author who has consulted with partner companies will be able to check detailed settlement information.
Measures for fair contracts between authors and CP companies have also been prepared. At the end of last year, Kakao Entertainment conducted a full survey targeting its subsidiaries (CPs). Based on the results, it derived improvement recommendations for some contract clauses so that authors can make fairer contracts and have their rights guaranteed as authors, and sent official letters to subsidiaries. All subsidiaries accepted the recommendations and are currently revising contracts. Based on the supplemented contracts, subsidiaries will proceed with new contracts with authors.
Additionally, Kakao Entertainment will establish the first-ever 'Creative Support Foundation' for webtoon and web novel authors in South Korea. This foundation, into which at least 10 billion KRW of Kakao Entertainment’s own funds will be invested over the next five years, aims to be established within this year and is currently forming its board of directors.
Under the vision of ‘creating a healthy creative ecosystem,’ the Creative Support Foundation will support not only authors under Kakao Entertainment but all talented creators. Beyond basic creative support, it plans to actively assist creators in areas they need, such as ‘psychological therapy support’ to alleviate mental difficulties during the creative process and ‘legal support’ for copyright and other legal issues. Alongside this, it will conduct cultural creative education through industry-academia cooperation and nurture prospective creators, contributing to discovering K-content authors who will shine on the global stage.
Along with the co-prosperity plan to strengthen the author ecosystem, Kakao Entertainment also announced measures to directly increase authors’ earnings. At the end of last year, Kakao Entertainment announced a ‘60% guaranteed actual settlement rate for pre-invested works.’ This guarantees a minimum actual settlement rate of 60% for authors by compensating at least 5% event (marketing) cash revenue in addition to the 55% revenue share of total sales under pre-investment contracts.
Kakao Entertainment also plans to share advertising revenue from the ‘viewer end’ (the bottom part where the story ends) of works with authors. Both plans are currently being detailed with the goal of settlement within this year.
Jinsu Lee, CEO of Kakao Entertainment, said, “We will take the lead in exploring various improvement plans so that the creative ecosystem can be healthier and authors can demonstrate their capabilities on the global stage based on this. We will do our best to ensure that companies and creators can grow sustainably together.”
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