"Who is the Korean Disney?" Naver and Kakao's Global 'Advance'

[Asia Economy Reporter Bu Aeri] Naver and Kakao are transforming into content giants by aggressively expanding their businesses such as webtoons. Recently, Naver and Kakao have shown 'broad and aggressive moves' through entertainment-related investments, acquisitions, and mergers, intensifying the battle to become the 'Korean version of Disney.'

Naver Targets Global Market Riding on Webtoons and Web Novels

According to industry sources on the 14th, Naver acquired the world's largest web novel platform, 'Wattpad,' last month for $600 million (660 billion KRW). Wattpad has over 90 million users monthly who spend 23 billion minutes on the platform.

Having already secured 72 million monthly users worldwide through Naver Webtoon, Naver became the world's largest storytelling platform company with 160 million monthly users by acquiring Wattpad, which has 90 million monthly users.

Naver Webtoon is expected to expand various businesses through Wattpad. First, Wattpad's web novels can be adapted into webtoons. Especially since 80% of Wattpad users are Generation Z (born from the mid-1990s to early 2000s), Naver Webtoon can produce original content verified by the global Gen Z audience.

It will also be possible to turn Wattpad's content into video productions. Wattpad owns Wattpad Studios, which operates global video businesses, so it is expected that Naver Webtoon and Wattpad's original content can be adapted into videos together with Naver Webtoon's Studio N. The Netflix drama 'Sweet Home,' based on Naver Webtoon, is a representative success case. 'Sweet Home' demonstrated its strength by entering the top 10 in 54 countries last year.

Regarding this, Han Seong-sook, CEO of Naver, said in a conference call last month, "This is a strategic decision to preempt the increasingly important global intellectual property (IP) market," adding, "We will expand beyond North America to global markets such as Korea, Japan, and Southeast Asia, ensuring that all core global storytelling IPs are created through Naver's platform, and we will explore various new business opportunities."

In addition to acquiring Wattpad, Naver is accelerating its global strategy in the 'K-pop sector' by partnering with major domestic entertainment companies. Naver has strengthened collaboration by investing in YG Entertainment and SM Entertainment and recently partnered with Big Hit as well.

Naver acquired a 49% stake in Big Hit's subsidiary BeNX for 411.8 billion KRW. Naver plans to build a new global fan community platform by integrating its V Live and Weverse platforms in partnership with Big Hit.

Kakao Entertainment as a Launchpad for Overseas Expansion... Creating 'Super IP'

Kakao is dreaming of becoming the 'Korean version of Disney' through a large-scale merger among its subsidiaries. The birth of Kakao Entertainment has laid the foundation for global expansion. Kakao, which had been labeled as a domestic company, has long faced the challenge of entering overseas markets.

On the 25th of last month, Kakao Page and Kakao M held board meetings and resolved to merge. Kakao Page is responsible for the webtoon business, while Kakao M handles entertainment businesses such as variety shows and dramas.

The merger of Kakao Page and Kakao M will launch 'Kakao Entertainment.' This is the first large-scale merger between Kakao subsidiaries, each with sales reaching several hundred billion KRW. Both sides expect the merged entity to achieve annual sales of 1 trillion KRW.

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 strategies through the merger.

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 sectors. They plan to focus their efforts on planning and producing powerful super IPs aimed at the global market.

They will also review various synergy measures to secure differentiated content competitiveness. The platform network built by Kakao Page domestically and internationally combined with Kakao M's music and video content is expected to strengthen the competitiveness of existing platform and content businesses.

Kakao Page has established itself as the largest IP company in Korea with about 8,500 original story IPs through continuous investment centered on webtoons and web novels. It has sought global expansion across 10 countries including Japan, North America, Greater China, and Southeast Asia, in addition to domestic platforms 'Kakao Page' and 'Daum Webtoon.' Kakao Page's IPs such as Itaewon Class and The Uncanny Counter have expanded into dramas, movies, and games. The movie 'Space Sweepers,' directly produced by Kakao Page, ranked number one in 28 countries worldwide within two days of its release on Netflix.

Regarding this, Yeo Min-soo, co-CEO of Kakao, emphasized during the earnings conference call on the 9th, "We aim to build an unrivaled value chain that encompasses the entire added value that IP business can create," adding, "After the merger, we will generate full-scale synergy across ecosystems and lead the growth and innovation of the entire entertainment industry."

This content was produced with the assistance of AI translation services.