[Valuable Intellectual Property] "No Customs Worries" Kakao Boosts Soft Power... Mobilizing All IP

Diversifying Business Through Character and Content IP
Aiming for the Global Market with K-pop Artists and Platforms

Kakao is set to actively expand its intellectual property (IP) business. On the 26th of last month, Kakao held its regular shareholders' meeting and partially amended its articles of incorporation. The company added "management and licensing of intellectual property rights such as trademarks" to its business objectives. Through various affiliate businesses, Kakao possesses strong proprietary IPs including characters, webtoons, and web novels. By utilizing original story IPs, it aims to produce dramas or animations and debut new K-pop singers, targeting the global market.

Kakao has collaborated with Andaz Bali to decorate rooms themed with character IPs. Kakao has dedicated personnel monitoring counterfeit Kakao Friends products and continuously monitors online distribution platforms and social media. When counterfeit product distribution is detected, they take actions such as reporting or requesting suspension of sales.

The Trump administration in the United States has been trying to manipulate the economies of various countries through "hard power" such as tariffs and trade sanctions. In response, Kakao plans to counter with "soft power" using IP. Soft power is a concept proposed by Joseph Nye of Harvard University, referring to the ability to exert influence through the appeal of culture, arts, values, and content rather than coercive or physical force.

The popular Netflix series "Poksak Soksassuda" was co-produced by Fan Entertainment and Baram Pictures, the latter being a drama production company acquired by Kakao M (now Kakao Entertainment) in 2020. Although the specific contract details between Netflix and Baram Pictures have not been disclosed, this success has undoubtedly contributed to the increase in Baram Pictures' corporate value. Another Netflix series titled "Akyeon," scheduled for release on the 4th, is also based on a Kakao Webtoon of the same name. This series was produced based on a webtoon serialized for ten months starting in April 2019, with Kakao Entertainment participating in its production.

Kakao Friends, operated by Kakao, is serializing the webtoon "Geuraedo Ryan," which depicts the childhood of its character Ryan, on platforms such as KakaoPage. In the business report submitted last month, Kakao stated, "The Kakao Friends IP has been utilized in consumer goods and games, and while producing animations, we have also created accompanying music and strengthened the business of distributing sound sources."

Kakao is also introducing new K-pop girl groups that captivate global fanbases. Kakao affiliate SM Entertainment debuted the girl group "Hearts to Hearts" in February, five years after aespa. Starship Entertainment, in which Kakao Entertainment holds a 58% stake, also introduced the girl group "Kiki" around the same time, creating a healthy competitive dynamic between the two groups. Both groups have topped various charts and are scheduled to perform on international stages such as the United States and Japan this year. Kiki was selected as the advertising model for "KakaoBank mini," a youth-exclusive financial service launched by KakaoBank, demonstrating synergy among Kakao group companies.

Last month, Kakao Entertainment officially launched the global fan platform "Berriz." Berriz is designed as a community where fans of affiliated label artists, content IP, and various K-culture IPs can communicate and enjoy themselves.

The world is engaged in a tariff war triggered by the Trump administration. However, the soft power that Kakao promotes is a field where tariffs cannot be easily imposed, unlike steel or automobiles. It is a gentle force and natural influence that cannot be forced through specific conditions on sales or consumption. Just as in Aesop's fable "The Sun and the Wind," where it was the warm sunshine, not the strong wind, that made the traveler remove his coat, attention is focused on whether Kakao's IP strategy will become a spring sunshine for our economy.