Kakao Entertainment, which acquired two American content-creating companies, Tapas Media, a web-comic publisher and Radish Media, a mobile fiction platform for serialized storytelling 2021, has decided to merge the two entities.
The goal is to solidify its position as a global entertainment leader by expanding the story spectrum and strong IP value chain through strategic mergers.
Kakao Entertainment, which had a global vision of ‘growing global transaction volume up to three times the current level’ last year, announced its ambition to become the No. 1 operator in North America through this merger.
On May 18, the Kakao Entertainment board of directors decided to merge the two companies. The corporation absorbs Tapas media as Radish, and the merger ratio is set at 1:18 for Radish and Tapas. Aiming for the merger date on August 1, Tapas and Radish plan to go through detailed merger procedures, including a decision on a new corporate name. The CEO of the newly merged corporation will be CEO Kim Chang-won, who has developed Tapas into North America’s representative webtoon platform.
Strategic merger to create more globally appealing content
This merger is a strategic decision to create synergy by combining the story IP capabilities that Tapas and Radish have built up in North America and to maximize Kakao Entertainment’s global growth engine. The newly merged corporation encompasses three platforms, including Tapas and Radish and Woosia World, which Radish acquired last year. Even after the merger, the three services will operate independently, but the vision is to create strong synergy based on the leadership of the merged corporation that chemically combines them.
Lee Jin-soo, CEO of Kakao Entertainment, said, “The merger of Tapas and Radish will go beyond a simple combination between platforms and will be a turning point that will lead the evolution of the North American storytelling industry. We will build a strong ‘IP pipeline’ by combining unrivaled IP capabilities and Kakao Entertainment’s Korean IP, which has proven strong in the global market. Through this, we will create continuous IP success stories.” He added, “We expect this merger to provide momentum to accelerate the growth of our North American business, and through this, we will spur the vision of ‘tripling global transaction volume and achieving 500 billion won in North American transaction value within three years.”
Kim Chang-won, CEO of the merged corporation, also said, “In the hyper-competitive global entertainment market, this merger will become the foundation for having overwhelming capabilities and competitiveness as a Story IP operator. We will continue to innovate content by utilizing it and become North American readers’ most loved brand leader with an IP that encompasses all genres.”
Tapas, which started as the first webtoon platform in North America in 2012, has grown into a premium webtoon platform representing North America in just ten years. Radish is also considered a place that has innovated the North American mobile storytelling business with its original solid web novel IP. With these combinations, Kakao Entertainment has the world’s No. 1 entertainment business based in North America, with the best’ IP value chain’ and ‘story spectrum’ in the country.
The core of the IP value chain, where original story IPs such as web novels and webtoons are constantly evolving into videos, games, metaverse contents, NFTs, etc., is the organic combination between high-quality premium content and each content. With this merger blurring the boundaries between the webtoon platform and the web novel platform, Kakao Entertainment is ready to aggressively operate the ‘novel-comics system’ in the North American market. Novel Comics, which produces popular web novels such as ‘Level Up Alone,’ ‘Templar,’ and ‘Meet the Company’ into webtoons, was introduced by Kakao Entertainment for the first time in Korea and has led to the expansion of the work lifecycle and maximization of creators’ profits.
Merger to boost USA audience
Furthermore, the IPs to be aggressively introduced by the merged corporation are expected to meet the North American industry, which boasts the world’s best content influence, and lead to videos, games, and animations, creating infinite IP synergy. Kakao Entertainment, which ignited the domestic webtoon imaging trend with ‘Super Webtoon Project,’ etc., is preparing to discover strong hit IP cases such as ‘Itaewon Class,’ ‘Compete for in-house,’ and ‘Wonderful Rumor’ in North America. The long-standing know-how of tapas and radish crews from global content companies such as Disney, DC Comics, and Warner Bros. At the same time, it is expected that the imaging bases of tapas, which have partnered with CAA (Creative Artists Agency), the largest agency in the United States, will be further activated.
The merged corporation will also focus on expanding the source IP to various fields such as audio content, metaverse, and NFT. For example, Radish is targeting the audio content market, which is growing rapidly in the North American market, and plans to release audiobooks of major works from the middle of this year.
Another synergy expected from this merger is the development of a company with the highest level of ‘IP spectrum’ in North America. The number of creators established locally by Tapas and Radish reached 100,000. The large-scale local creators of the merged corporation, united under one banner of ‘Story IP,’ plan to pour out leading IPs regardless of areas such as webtoons and web novels. In addition, the company plans to aggressively supply premium IPs from Kakao Entertainment, which is driving 60-70% of tapas sales with less than 1% IP to Tapas, Radish, and Woosia World, leading to a steeper sales growth.
Broad genre expansion is also expected to strengthen the merged entity. Tapas shows rapid sales growth based on various genres optimized for the local sentiment. Radish, which has been loved for its romance, acquired Wuxia World, the world’s largest oriental fantasy service, last year and is the only web novel that embraces both male and female readers. Source IPs of all genres, such as drama/romance/fantasy/thriller/horror, supplied through the three platforms, are expected to build a strong readership in North America and lead the influx of various generations beyond the 2030 generation. A synergistic effect is expected in terms of operation as well. By combining the know-how and long-term vision of the experts who led the three services, more aggressive and effective promotions, IP planning, and development are planned.
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